OpenAI’s tender offer will continue according to recent news from a CNBC article. The offer will allow employees to sell shares in the start-up to outside investors, and it remains on track despite the recent leadership changes and board shuffle at the tech company.
Tender offer details
Two sources familiar with the situation informed CNBC that the tender offer will value OpenAI at around $86 billion, which is the same as the valuation previously reported in October. The offer is being led by Thrive Capital, a fund managed by Josh Kushner.
Challenges face by the company
Sam Altman’s temporary ouster earlier in November had initially put the round and its previously reported valuation in peril, but his return cleared the way for the tender offer to go forward. Tender offers involve the sale of existing units, giving employees an opportunity for liquidity without issuing new equity. The $86 billion round would be three times the company’s previous valuation.
Extension of the tender offer
A separate source revealed that the round has been extended to January 5. The extension comes after a turbulent period for the company. OpenAI’s nonprofit board argued that Altman’s communication with them as CEO “was not consistently candid” which led to his departure. This caused a significant turnover of OpenAI’s board.
New Board Lineup
On Wednesday, OpenAI announced the official return of Sam Altman and president Greg Brockman to their previous roles. This came with a new board lineup that includes heavyweight tech executives like Bret Taylor, co-CEO at Salesforce, former Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo.
Microsoft and other backers
Notably, Microsoft secured a non-voting board observer position, given they hold a 49% stake in OpenAI. However, not all the major backers of OpenAI will receive a director position.
Options for backers
Tiger Global is unlikely to pursue a board seat, and Sequoia Capital declined to comment on whether they would be involved in the upcoming tender. Founders Fund will also not participate in the tender offer, according to one source familiar with the firm
Remarks by the company
Neither OpenAI nor its backers immediately responded to CNBC’s request for comment. The continuation of the tender offer in light of recent leadership changes will be something to watch as the tech industry navigates this period of significant disruption and transition.
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