What is the story about?
OpenAI, the company behind ChatGPT, has allowed its employees to sell some of their company shares, with some workers able to cash out up to $30 million in shares each in a recent funding deal, making them some of the earliest beneficiaries of the artificial intelligence (AI) boom.
More than 600 current and former employees took part in a secondary transaction conducted last October, collectively cashing out about $6.6 billion, according to a report by The Wall Street Journal. The sale valued the company at around $400 billion.
Reportedly, around 75 employees sold the maximum amount allowed under the deal. Some workers placed their remaining shares into donor-advised funds, which have allowed them to support charitable causes while also receiving tax benefits.
The move marks one of the biggest wealth-creation moments in the history of San Francisco and other tech capitals, before a company has even gone public. Companies like
OpenAI and Anthropic are expected to become among the largest stock market listings in the future. When that happens, many employees can become multimillionaires.
ManyOpenAI employees who joined the company after the launch of ChatGPT were able to sell shares for the first time after completing a required two-year waiting period.
The sale highlights just how valuable AI companies have become in recent years. OpenAI is currently the world’s most-valuable tech startup. Employees who received shares when the company first started issuing them seven years ago have seen their value rise more than 100 times.
The AI talent race has also pushed compensation packages to record levels. OpenAI offers annual salaries above $500,000 for some technical roles and provides large stock-based rewards. Rival companies are also spending heavily to attract top researchers, with Meta reportedly offering packages worth $300 million to select researchers.
The sudden rise in wealth among people who work in the AI field has already created an impact in San Francisco, where rental prices are increasing and concerns are growing over a widening gap between highly paid tech employees and the rest of the residents of the city.
Earlier, OpenAI had limited employee share sales to $10 million per sale, leaving many top researchers and engineers frustrated. Following this, the artificial intelligence company decided to raise the cap to $30 million due to strong investor demand.
More than 600 current and former employees took part in a secondary transaction conducted last October, collectively cashing out about $6.6 billion, according to a report by The Wall Street Journal. The sale valued the company at around $400 billion.
Reportedly, around 75 employees sold the maximum amount allowed under the deal. Some workers placed their remaining shares into donor-advised funds, which have allowed them to support charitable causes while also receiving tax benefits.
The move marks one of the biggest wealth-creation moments in the history of San Francisco and other tech capitals, before a company has even gone public. Companies like
ManyOpenAI employees who joined the company after the launch of ChatGPT were able to sell shares for the first time after completing a required two-year waiting period.
The sale highlights just how valuable AI companies have become in recent years. OpenAI is currently the world’s most-valuable tech startup. Employees who received shares when the company first started issuing them seven years ago have seen their value rise more than 100 times.
The AI talent race has also pushed compensation packages to record levels. OpenAI offers annual salaries above $500,000 for some technical roles and provides large stock-based rewards. Rival companies are also spending heavily to attract top researchers, with Meta reportedly offering packages worth $300 million to select researchers.
The sudden rise in wealth among people who work in the AI field has already created an impact in San Francisco, where rental prices are increasing and concerns are growing over a widening gap between highly paid tech employees and the rest of the residents of the city.
Earlier, OpenAI had limited employee share sales to $10 million per sale, leaving many top researchers and engineers frustrated. Following this, the artificial intelligence company decided to raise the cap to $30 million due to strong investor demand.
