OpenAI to Proceed with Tender Offer Despite Leadership and Board Upheaval
The future of OpenAI, the artificial intelligence research lab, remains solid despite recent leadership tumult and board shuffles. Two sources close to the situation told CNBC that the tender offer to allow employees to sell shares in the start-up to outside investors is still on track.
Thrive Capital, led by Josh Kushner, is organizing the tender offer, which will value OpenAI at $86 billion. The confidential sources confirmed that the valuation is consistent with previous reports from October. This latest valuation is three times higher than OpenAI’s previous fundraise in April.
However, the future of the tender offer was jeopardized when CEO Sam Altman was temporarily ousted earlier in the month. Altman’s return cleared the path for the offer to proceed, as announced by OpenAI.
Importantly, the tender offer gives employees the option to trade existing equity rather than issuing new shares. This provides them with a needed source of liquidity.
Following a turbulent time for the company, OpenAI announced the return of CEO Sam Altman and president Greg Brockman to their previous roles. The new board includes Bret Taylor, co-CEO of Salesforce, Larry Summers, former Secretary of the Treasury, and Adam D’Angelo, CEO of Quora. Microsoft, which holds a 49% stake in OpenAI, secured a non-voting board observer position.
Despite the upheaval, not all major backers will receive a director position. Tiger Global will not pursue a board seat. Similarly, Founders Fund will opt out of the tender offer, while Thrive Capital remains committed to OpenAI.
In the wake of this news, OpenAI declined to comment on the matter. Nevertheless, the tender offer has been extended to January 5, according to another insider. The recent tumult raised questions about Microsoft’s future involvement, and Nadella confirmed that new governance would be required at the startup.
Sequoia Capital, a key OpenAI investor, declined to comment on its involvement in the upcoming tender. Another major backer, Founders Fund, will not participate in the offer.
The Information and Bloomberg previously reported the various aspects of the tender offer. OpenAI’s position regarding these reports and the specifics of the offer will be worth monitoring in the coming weeks.
The return to business as usual for OpenAI is significant. However, the company’s internal struggles and the future of its strategic relationships remains a focal point for many market observers.
