Prior to its IPO, 600 employees at OpenAI have already cashed out 6.6 billion U.S. dollars.

Throughout Silicon Valley's history, the myth of generating massive wealth has long followed a fixed script: a company starts out in a garage, goes through years of losses, and finally rings the listing bell on Nasdaq. Then, as its stock price skyrockets, hundreds of early employees turn into "paper millionaires" overnight.

Google's IPO in 2004 created roughly 1,000 paper millionaires, which was regarded as the peak moment of the internet era.

But in the AI era, this script has been torn apart. The node for cashing out wealth has been pushed forward extremely drastically.

According to the latest market news, around 600 OpenAI employees collectively cashed out a staggering 6.6 billion US dollars through a tender offer for existing shares last October. In this transaction, around 75 employees directly hit the $30 million sales cap; the remaining 525 people cashed out an average of around $8.3 million each.

This transaction pushed the valuation of OpenAI, which was not yet listed at the time, to 500 billion US dollars.

Today, OpenAI's valuation has soared to 852 billion US dollars, and it has secretly submitted its IPO application. Although there is still some time before the final listing bell rings, the core group of employees has already pocketed wealth that can last for generations.

Paper wealth is waiting for the bell to ring, but cash has long left the building.

The Folded "Two-Year Lock-Up Period"

In this carnival, what is the most striking is not only the huge amount of money involved, but also the extremely strict distribution mechanism.

OpenAI stipulates that employees must hold their shares for at least two years to be eligible for selling. This seemingly conventional clause has unexpectedly drawn a cruel wealth gap inside the company.

Those "veterans" who joined before ChatGPT went viral in November 2022 have reaped the biggest dividends from this wave. They hold options with extremely low exercise prices, which under the valuation of 500 billion or even 852 billion US dollars, have turned into pure money printers. However, any "new upstarts" who joined the company after the release of ChatGPT, no matter how heavy R&D tasks they take on now or how impressive their resumes are, are perfectly locked out of this cash-out window.

In Silicon Valley's "talent arms race", options are the core weapon to retain top talents. But when early employees have already cashed out and achieved financial freedom, those young researchers who joined later, looking at the extremely high company valuation (which means their future upside is compressed), will inevitably have a huge psychological gap.

In order to appease those who missed the opportunity, OpenAI has to pay extremely high cash compensation in addition to regular salaries, or promise to give preferential treatment in future new tender offers. But the leverage effect of cash and options can never be equated.

Why Distribute the Money Before Listing?

In the logic of the traditional capital market, founders usually try their best to prevent employees from cashing out on a large scale before IPO. The reason is simple: if the core team has all achieved financial freedom, who would be willing to keep working 996 with all their might in the next few years?

But OpenAI broke this convention. This practice of "cashing out before listing" is both forced and proactive.

First, it is a defensive move against tech giants. Starting from 2024, companies including Meta have poached AI talents in an almost frantic way, even offering sky-high compensation packages worth hundreds of millions of US dollars. If OpenAI only offers options, facing the high-intensity R&D pressure and the multi-year wait for listing, it is only a matter of time before the core team is poached away. Allowing employees to feel the reality of "winning" in advance through the transfer of old shares is the most effective way to retain them.

Second, there is excess liquidity in the primary market. Top-tier capitals such as Thrive Capital and SoftBank have huge amounts of money that they want to pour into OpenAI's shares. Since the company does not need to raise money from the public market through an IPO for now, it can take the shares of old shareholders out and transfer them to these investors. This not only meets the entry demand of investors, but also solves the liquidity demand of employees.

As a result, an "internal IPO" that took place in the private market with relatively loose supervision completed the distribution of wealth in advance.

Carnival and Hidden Worries Behind the Crazy Valuation

From 500 billion to 852 billion, in less than a year, OpenAI's valuation has increased by more than 70%. This is an extremely crazy pricing.

If it goes public at a valuation of 852 billion US dollars, it will directly rank among the companies with the largest market capitalization in the US stock market. However, what supports this trillion-dollar dream is extremely high computing power costs and a business model that has not yet been fully closed-loop.

At present, the AI industry is undergoing a subtle shift in mentality. Microsoft and Meta have begun to adjust the pace of capital expenditure, and the market's doubts about AI infrastructure "burning money without making profits" are growing louder; Anthropic's valuation expectation was lowered from 2 trillion to 1.5 trillion US dollars at its investor day. At this critical juncture, OpenAI's secret submission of IPO application is not only to obtain more massive capital ammunition, but also to show the market its confidence as the "absolute leader".

But the most dramatic point is: while retail investors in the public market are still reveling in the upcoming IPO and looking forward to buying OpenAI shares, those 600 employees who know the company's core cards best have already taken away 6.6 billion US dollars in real money at a valuation of 500 billion.

Cash Is the Most Honest Vote

Regarding this wave of cashing out, the outside world does not need to blame these employees. In Silicon Valley, betting one's youth and talent on a high-pressure startup and taking options in exchange for future returns is originally a high-risk gamble. They won, and cashing out is a well-deserved reward.

But this may be a metaphor for an era.

"Paper wealth has to wait for the bell to ring, but cash does not. Before the bell rings, the money has already flowed out of the building."

In this AI era where computing power is extremely concentrated and capital is extremely overflowing, the traditional rules of the game are failing. The smartest minds can not only write superintelligence with code, but also skillfully complete the most efficient cashing out of their own value before the bell rings.

When the IPO bell finally rings, the carnival may still be grand, but for those 600 people, the real reward has already been cashed out, and what is left is just a string of numbers on the screen.

This article is from the WeChat official account "Tech Business" (ID: InnoBusiness), written by Tech Business, and published with authorization from 36Kr.