OpenAI tender offer is on track for January despite leadership fracas, sources say

OpenAI’s
tender
offer,
which
would
allow
employees
to
sell
shares
in
the
start-up
to
outside
investors,
remains
on
track
despite
the

leadership
tumult
and

board
shuffle,
two
people
familiar
with
the
matter
told
CNBC.

The
tender
offer
will
value
OpenAI
at
the
same
levels
as

previously
reported
in
October,
around
$86
billion,
and
is
being
led
by
Josh
Kushner’s
Thrive
Capital,
according
to
the
people
familiar,
who
spoke
anonymously
to
discuss
private
communications
freely.

The
round
and
previously
reported
valuation
were
jeopardized
by
Sam
Altman’s

temporary
ouster
earlier
in
November,
but
his
return
cleared
the
way
for
the
tender
offer
to
proceed.

Tender
offers
do
not
involve
the
issuance
of
new
equity.
Instead,
Thrive
and
other
involved
investors
will
buy
existing
units
belonging
largely
to
employees,
giving
them
liquidity.
The
$86
billion
round
is
three
times
OpenAI’s
previous
fundraise
in
April,
which

valued
the
company
at
around
$28
billion.

Another
person
familiar
told
CNBC
that
the
round
had
been
extended
to
January
5.

The
extension
of
the
tender
offer
comes
after
a
rollercoaster
couple
of
weeks
for
the
company.
OpenAI’s
nonprofit
board
argued
that
Altman
“was
not
consistently
candid
in
his
communications
with
the
board”
as
CEO,
and
his
subsequent
departure
incited
uproar
from
investors
and
employees
alike,
especially
after
Microsoft
CEO
Satya
Nadella
said
Altman
and
OpenAI
president
Greg
Brockman
would
lead
a
new
AI
lab
under
Microsoft.
Employees
threatened
to
walk
en
masse,
signing
an
open
letter
and
commenting
in
support
of
Altman
on
social
media,
which
led
in
part
to
a
significant
turnover
of
OpenAI’s
board.

On
Wednesday,

OpenAI
announced
Altman
and
Brockman’s
official
return
to
their
previous
roles,
along
with
a
new
board,
including
former


Salesforce
co-CEO
Bret
Taylor,
former
Treasury
Secretary
Larry
Summers
and
Quora
CEO
Adam
D’Angelo.

Microsoft
obtained
a
non-voting
board
observer
position,
OpenAI
said
Wednesday.
Nadella
had
previously
told
CNBC
that
new
governance
would
be
required
at
the
startup.
Microsoft
holds
a
49%
stake
in
OpenAI.

Not
all
major
backers
will
receive
a
director
position.
Tiger
Global
will
not
likely
pursue
a
board
seat,
a
person
familiar
with
the
matter
said,
in
line
with
the
firm’s
longstanding
practice.
OpenAI’s
other
major
backers
include
Founders
Fund,
Sequoia
Capital
and,
following
the
completion
of
the
tender
offer,
Thrive
Capital.

The
Information
and

Bloomberg
previously
reported
some
details
of
the
tender
offer.

Sequoia
Capital
declined
to
comment
on
whether
it
would
be
involved
in
the
upcoming
tender.
Founders
Fund
will
not
participate
in
the
tender
offer
either,
a
person
familiar
with
the
firm
said.
A
spokesperson
for
Thrive
declined
to
comment
beyond
saying
it
remained
“committed”
to
OpenAI.

OpenAI
did
not
immediately
respond
to
CNBC’s
request
for
comment.

—
CNBC’s
Ari
Levy
&
Jordan
Novet
contributed
to
this
report.

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