OpenAI has reportedly completed a $7 billion tender offer allowing employees to sell part of their shares in the privately held artificial intelligence company, according to Bloomberg.
The transaction reportedly valued OpenAI at around $852 billion, the same valuation assigned during the company's latest fundraising round in March, which raised approximately $122 billion.
The employee share sale provides workers with an opportunity to cash out some of their equity without requiring OpenAI to go public.
IPO plans remain uncertain
The transaction comes as OpenAI reportedly prepares for a potential initial public offering (IPO).
The company is said to have confidentially filed paperwork with the US Securities and Exchange Commission in June as part of preparations for a possible listing later this year.
However, the reported tender offer does not necessarily mean an IPO is imminent. Private share sales have become increasingly common among major technology companies, allowing employees to realise the value of their holdings while companies remain privately owned.
OpenAI has not publicly confirmed the reported $7 billion transaction.
Pressure to show stronger financial performance
The timing of the share sale comes amid questions about OpenAI's financial performance and readiness for a public listing.
CEO Sam Altman recently acknowledged that the company had not had its strongest year but said he expected the next 12 months to be significantly better.
Companies preparing for an IPO typically seek to demonstrate sustained revenue growth and strong financial performance to potential investors. Reports earlier this year indicated that OpenAI had fallen short of some internal revenue and user targets.
Meanwhile, rival AI company Anthropic has reportedly been moving closer to profitability, adding pressure on OpenAI to demonstrate that its rapidly expanding AI business can become financially sustainable.
For now, the reported tender offer gives OpenAI employees greater access to the value of their shares while allowing the company to remain private. It also leaves the timing of any potential IPO uncertain.
