Despite the recent tumultuous weeks at OpenAI, the scheduled January tender offer remains on track, offering a valuation of around $86 billion, led by Thrive Capital and spearheaded by Josh Kushner, as per undisclosed sources familiar with the matter. This offer, extended to January 5, involves existing unit holders, predominantly employees, selling shares to investors, providing them with liquidity. The $86 billion round is three times larger than OpenAI’s previous fundraise in April, which valued the company at approximately $28 billion.
The recent upheaval at OpenAI saw Sam Altman’s temporary ouster in November, jeopardizing the round and the previously reported valuation. However, Altman’s return has paved the way for the tender offer to proceed. Notably, tender offers don’t entail the issuance of new equity; instead, Thrive Capital and other investors involved will acquire existing units, primarily held by employees.
The extension of the tender offer follows a rollercoaster period for OpenAI. Altman’s temporary departure prompted concerns, with the nonprofit board stating he “was not consistently candid in his communications with the board” as CEO. Altman and OpenAI president Greg Brockman’s return, along with the announcement of a new board, including former Salesforce co-CEO Bret Taylor, former Treasury Secretary Larry Summers, and Quora CEO Adam D’Angelo, has aimed to stabilize the situation.
Microsoft, holding a 49% stake in OpenAI, secured a non-voting board observer position. Microsoft CEO Satya Nadella previously mentioned the need for new governance at the startup. Despite the leadership shakeup, not all major backers are pursuing director positions; Tiger Global reportedly won’t seek a board seat, aligning with the firm’s typical practice. Sequoia Capital and Founders Fund have yet to confirm their participation in the upcoming tender offer.
While The Information and Bloomberg previously reported on some details of the tender offer, major stakeholders remain committed to OpenAI’s future success, emphasizing the continued support and resilience of the organization amid recent challenges.