OpenAI has bagged a $1.5 billion investment from SoftBank, a tender offer that will let the company’s employees sell shares. The new funding is part of a larger effort to increase SoftBank’s stake in the high-value AI startup, whose valuation recently hit $157 billion. Under the deal, current and former employees will be able to cash out about $1.5 billion worth of shares, providing liquidity amid OpenAI’s rapid growth and high valuation.
That investment is being made through SoftBank’s Vision Fund 2, but it is led by the company’s chief executive, Masayoshi Son, who wanted a bigger ownership stake in OpenAI, for which he initially invested $500 million in the company’s last funding round. This tender offer, open to eligible employees since late November, enables holders of restricted stock units (RSUs) with at least two years of holding to sell shares at $210 per share. The price reflects the company’s most recent valuation in its October funding round, where OpenAI raised $6.6 billion from investors including SoftBank, Microsoft, and Nvidia.
It’s an indication that the firm is very keen on AI. Generally, SoftBank invests massively in tech startups whose growth trends are promising. Its founder and CEO, Son Masayoshi, who invested in prominent companies like Apple, Qualcomm, and Alibaba has confirmed his interest in AI after investing in other AI-based startups, Glean and Perplexity. His Vision Fund 2 is dedicated to funding high-potential companies in this field.
Despite the SoftBank connection, OpenAI has so far secured billions of dollars on its own, including a $13 billion investment from Microsoft. Since launching ChatGPT, its first commercially available generative AI, in 2022, the company’s valuation has skyrocketed. OpenAI is likely to post $5 billion in losses this year while raking in $3.7 billion in revenue. That will show how capital-intensive the business model really is.
For OpenAI employees, this tender offer provides a crucial opportunity to cash out shares as the company has no immediate plans for an initial public offering (IPO). As the tech industry grapples with an underperforming IPO market, tender offers have become essential for offering liquidity to employees in private companies. OpenAI’s policy on share sales has become more employee-friendly, allowing broader participation in tender offers after previous concerns over access to liquidity and company-controlled stock sales.
The tender offer comes amid growing competition from other AI startups, such as Anthropic, and tech giants like Google. The generative AI market is forecast to surpass $1 trillion in revenue within the next decade, with business spending on AI having surged 500% this year, further fueling investor interest.
