OpenAI buys back $7B in employee shares at $852B valuation

OpenAI has completed a $7 billion tender offer to repurchase shares from current and former employees, providing a liquidity event ahead of the company's anticipated initial public offering, Bloomberg reported on Monday.bloomberg+1

In an unusual move, the ChatGPT maker purchased the shares itself rather than enlisting outside investors such as Thrive Capital or SoftBank Group to buy the stock, according to two people familiar with the matter who spoke on condition of anonymity. The transaction valued OpenAI at $852 billion, unchanged from its most recent funding round.finance.yahoo+1

Path to an IPO

The tender offer comes as OpenAI moves closer to a public listing. The company raised $122 billion from major technology companies and venture capital firms in March, and in June said it had confidentially filed paperwork for an initial public offering. Periodic tender offers are common among top private AI companies, allowing insiders to convert paper gains into cash while the firms remain private.finance.yahoo

Competitive Pressure from Anthropic

The buyback arrives amid intensifying competition in the AI industry. Anthropic, once considered an underdog, has gained momentum for its AI software, surpassed OpenAI in valuation, and is positioned to potentially reach public markets before its rival. The rivalry has added urgency to OpenAI's own IPO timeline.finance.yahoo

OpenAI declined to comment on the transaction.finance.yahoo