OpenAI tender offer on track despite leadership kerfuffle: sources

OpenAI tender offer on track despite leadership kerfuffle: sources

Sam Altman, CEO of OpenAI, participates in “Charting the Path Forward: The Future of AI” at the Asia-Pacific Economic Cooperation (APEC) Leaders Week in San Francisco, California, on November 16, 2023.

Andrew Caballero Reynolds | AFP | Getty Images

OpenAI’s tender offer, which will allow employees to sell shares in the startup to outside investors, remains on track despite the leadership turmoil 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, about $86 billion, and is led by Josh Kushner’s Thrive Capital, according to the people familiar, who spoke anonymously to freely discuss private communications.

The previously reported round and valuation were jeopardized by the temporary ouster of Sam Altman earlier in November, but his return cleared the way for the bid to go ahead.

The tender offers do not include the issuance of new shares. Instead, Thrive and other participating investors will buy existing units largely owned by employees, giving them liquidity. The $86 billion round represents three times OpenAI’s previous fundraising in April, which valued the company at about $28 billion.

Another person familiar with the matter told CNBC that the tour has been extended until January 5.

The extension of the tender offer comes after two weeks of fluctuations witnessed by the company. The nonprofit OpenAI’s board of directors argued that Altman “was not always forthright in his communications with the board” as CEO, and his subsequent departure sparked an uproar among investors and employees alike, especially after Microsoft CEO Satya Nadella said Altman and OpenAI chief Greg Brockman will lead a new company. Microsoft’s Artificial Intelligence Lab. Employees threatened to walk en masse, signed an open letter and commented in support of Altman on social media, leading in part to a major shake-up of OpenAI’s board of directors.

On Wednesday, OpenAI announced Altman and Brockman were officially returning to their previous roles, along with a new board of directors, including former Salesforce co-CEO Brett Taylor, former Treasury Secretary Larry Summers, and Quora CEO Adam D’Angelo.

Microsoft has been given an observer position on the board without a vote, OpenAI said on Wednesday. Nadella had previously told CNBC that new governance would be needed at startup. Microsoft owns a 49% stake in OpenAI.

Not all major backers will receive a director position. Tiger Global likely will not seek a board seat, in keeping with long-standing company practices, a person familiar with the matter said. Other major backers of OpenAI include Founders Fund, Sequoia Capital, and following the completion of the tender offer, Thrive Capital.

The Information and Bloomberg had previously published some details about the tender offer.

Sequoia Capital declined to comment on whether it will participate in the upcoming tender. Founders Fund will not participate in the tender offer either, a person familiar with the company said. A Thrive spokesperson declined to comment, saying only that it remains “committed” to OpenAI.

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

— CNBC’s Ari Levy and Jordan Novitt contributed to this report.

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