OpenAI ex-employees worry about company’s control over their millions of dollars in shares
OpenAI CEO Sam Altman speaks during the Microsoft Build conference at Microsoft headquarters in Redmond, Washington, on May 21, 2024.
Jason Redmond | AFP | Getty Images
OpenAI plans to allow stakeholders to sell a portion of their shares every year, but the company, which has been valued at over $80 billion, is taking a restrictive approach that’s raised concerns among current and former employees about the startup’s power to determine who participates, CNBC has learned.
Due to OpenAI’s skyrocketing valuation following the launch of ChatGPT in late 2022, many early employees are sitting on millions of dollars worth of equity. With no IPO on the horizon and a price tag that makes the company too expensive to be acquired, the only way for shareholders to realize any value from their equity in the near term is through secondary stock sales.
However, current and former OpenAI employees have been increasingly concerned about access to liquidity, according to interviews and documents shared internally. Those fears have intensified in recent weeks after reports that the company had the power to claw back vested equity, said people familiar with the matter, who asked not to be named because the information they shared is confidential.
In an attempt to assuage some of those concerns, OpenAI recently circulated a document, obtained by CNBC, titled, “Overview and Recap of OpenAI’s Tender Process,” detailing how the company has conducted equity purchases in the past and how it plans to handle them in the future. The issue has become a major topic of conversation at OpenAI and among people who have recently left, according to internal documents, Slack messages and exit agreements viewed by CNBC, as well as conversations with multiple former OpenAI employees.
OpenAI has told employees that it will try to hold one tender offer roughly every year, but that depends on how both the company and the market are faring at the time, a person with knowledge of the matter said.
It’s the latest controversy at OpenAI, which has been at the center of the tech universe for much of the past 18 months, most recently announcing a partnership with Apple on Monday to integrate ChatGPT and Siri. Backed by roughly $13 billion from Microsoft, OpenAI has an atypical “capped-profit” model, with a nonprofit as the governing entity for the for-profit subsidiary.
Less than seven months ago, co-founder Sam Altman was suddenly ousted as CEO due to a conflict with the board, before being abruptly reinstated days later after an uproar among investors and loyal staffers.
The Federal Trade Commission and the Justice Department, meanwhile, are set to open antitrust investigations into Microsoft, OpenAI and Nvidia, examining their influence on the AI industry, a source familiar with the matter confirmed to CNBC last week. And last month, OpenAI disbanded its team focused on the long-term risks of AI just a year after forming the group. That came shortly after OpenAI co-founder Ilya Sutskever and Jan Leike, announced their departures, with Leike writing in a post on X that OpenAI’s “safety culture and processes have taken a backseat to shiny products.”
As OpenAI has grown, the company has used aggressive tactics to get employees to sign exit agreements that affect the future of their stock holdings.
“If you have any vested Units and you do not sign the exit documents, including the General Release, as required by company policy, it is important to understand that, among other things, you will not be eligible to participate in future tender events or other liquidity opportunities that we may sponsor or facilitate as a private company,” OpenAI wrote in the agreement, which was viewed by CNBC.
The paperwork for departing employees says that in order to participate in tender events and liquidity opportunities, the person must be in compliance with “all applicable company policies, as determined by OpenAI.”
Last month, OpenAI announced it would backtrack on a controversial decision to make former employees choose between signing a non-disparagement agreement that would never expire and keeping their vested equity in the company. An internal memo, viewed by CNBC, was sent to former employees and shared with current staffers.
The memo, addressed to each former employee, said that at the time of the person’s departure from OpenAI, “you may have been informed that you were required to execute a general release agreement that included a non-disparagement provision in order to retain the Vested Units [of equity].”
“We’re incredibly sorry that we’re only changing this language now,” an OpenAI spokesperson told CNBC after the company changed course. “It doesn’t reflect our values or the company we want to be.”
In an email sent to CNBC late Monday, an OpenAI spokesperson said, “All eligible current and former employees have been offered opportunities for liquidity at the same price in the past, regardless of where they work or what they signed at departure.” The company doesn’t expect that to change, the spokesperson said.
‘Further questions to address’
A former employee, who shared his OpenAI correspondence with CNBC, asked the company for additional confirmation that his equity and that of others was secure.
“I think there are further questions to address before I and other OpenAl employees can feel safe from retaliation against us via our vested equity,” the ex-employee wrote in an email to the company in late May. He added, “Will the company exclude current or former employees from tender events under any circumstances? If so, what are those circumstances?”
The person also asked whether the company will “force former employees to sell their units at fair market value under any circumstances” and what those circumstances would be. He asked OpenAI for an estimate on when his questions would be addressed, and said he hasn’t yet received a response. OpenAI told CNBC that it is responding to individual inquiries.
According to internal messages viewed by CNBC, another employee who resigned last week wrote in OpenAI’s “core” Slack channel that “when the news about the vested equity clawbacks provisions in our exit paperwork broke 2.5 weeks ago, I was shocked and angered.” Details that came out later “only strengthened those feelings,” the person wrote, and “after fully hearing leadership’s responses, my trust in them has been completely broken.”
The person then tagged CEO Sam Altman in the message, highlighting what he described as a paradox in Altman’s stated effort to responsibly build artificial general intelligence, or AGI.
“You often talk about our responsibility to develop AGI safely and to distribute the benefits broadly,” he wrote. “How do you expect to be trusted with that responsibility when you failed at the much more basic task” of not threatening “to screw over departing employees,” the person added.
The company has also, in the past, opened up “donation rounds” to current employees, allowing them to donate a certain amount of their vested equity to charity, which brings with it tax incentives. Former employees could be excluded, as the donation rounds will likely be offered “to active employees only and are not guaranteed to happen,” according to messages viewed by CNBC.
Much of the discussion around future stock issues will now likely include a new voice, after OpenAI announced on Monday that it hired Sarah Friar, who was previously CEO of Nextdoor and CFO of Square, as its finance chief.
OpenAI, which was founded in 2015, has held three tender rounds to date. The first was in mid-2021, the second was between April and June 2023, and the latest was between November 2023 and March 2024.
For former employees, the rounds typically took place months after transactions for current staffers, according to an internal document. In at least two tender offers, the sales limit for former employees was $2 million, compared to $10 million for current employees.
In addition to current and former employees, OpenAI has a third tier for share sales that consists of ex-employees who now work at competitors. Rather than being an official tender, the third group participates in “direct secondary transactions facilitated directly between the buyer (OpenAI or pre-approved investors) and seller,” according to an internal document.
OpenAI said in the document that the reason for separating current and former employees is to avoid delaying the sale process for existing workers and to get a sense of how much equity they want to sell before committing to terms for those who have left.
OpenAI said the reason for the third category had to do with “safeguarding competitively sensitive information,” since “by law, we must share certain information with all sellers and buyers in the same tender offer.”
“For example, in prior tender offers, we have disclosed detailed financial data, and non-public information about our Microsoft deals, even when the negotiations were still ongoing and unannounced,” the company wrote in the internal document.
Larry Albukerk, founder of EB Exchange, which helps tech workers with pre-IPO stock sales, told CNBC that while companies have a lot of latitude in how they handle tender offers, as long as it’s written in the contract, creating an adversarial relationship with former employees can be damaging for morale.
“Ultimately, employees are going to become ex-employees,” Albukerk said. “You’re sending a signal that, the second you leave, you’re not on our team, and we’re going to treat you like you’re on the other team. You want people to root for you even after they leave.”
Stock worth $0?
Of even greater concern, some insiders said, is language in the terms of a corporate document related to Aestas, a company OpenAI set up to manage the offerings. The document suggests ex-employees could be stripped of their equity.
For anyone who leaves OpenAI, “the Company may, at any time and in its sole and absolute discretion, redeem (or cause the sale of) the Company interest of any Assignee for cash equal to the Fair Market Value of such interest,” the document states.
Former OpenAI employees said that anytime they received a unit grant, they had to send a document to the IRS stating that the fair market value of the grant was $0. CNBC viewed a copy of the document. Ex-employees told CNBC they’ve asked the company if that means they could lose their stock for nothing.
OpenAI said it’s never canceled a current or former employee’s vested equity or required a repurchase at $0.
Legal experts said OpenAI’s treatment of ex-employees who leave to work at competitors could be problematic, especially in California.
In April, the FTC voted to ban non-compete agreements for for-profit companies. A final rule will go into effect in September. The ban not only protects people from punishment for accepting another role, but also covers any agreement that “penalizes a worker” or “functions to prevent” a worker from working at a competitor.
An attorney, who asked not to be named due to client conflicts in the space, said that OpenAI’s behavior towards those ex-employees leaves a “plausible argument” for future litigation tied to the non-compete issue. Another attorney, who also requested anonymity, called it “undue pressure.”
“It sounds like they are playing hardball, but they would be far from the only company to act like this in the resale of their private securities,” Doug Brayley, a partner at Ropes & Gray, said in an interview. “Private companies generally leave themselves a lot of discretion about how to treat the repurchase of their equity.”
Larry Ellison, Oracle’s co-founder, chief technology officer and chairman, at right, and U.S. President Donald Trump share a laugh as Ellison uses a stool to stand on as he speaks during a news conference in the Roosevelt Room of the White House in Washington on Jan. 21, 2025. Trump announced an investment in artificial intelligence (AI) infrastructure and took questions on a range of topics including his presidential pardons of Jan. 6 defendants, the war in Ukraine, cryptocurrencies and other topics.
Andrew Harnik | Getty Images News | Getty Images
Oracle shares soared 13% on Thursday to a record close, after the database software vendor issued robust earnings and a strong forecast, fueled by growth in cloud.
Revenue climbed 11% year over year during the fiscal fourth quarter to $15.9 billion, topping the $15.59 billion average estimate, according to LSEG. Adjusted earnings per share of $1.70 exceeded the average analyst estimate of $1.64.
“All told, ORCL has entered an entirely new wave of enterprise popularity that it has not seen since the Internet era in the late 90s,” Piper Sandler analysts wrote in a note to clients. The firm was one of several to lift its price target on the stock, raising its prediction to $190 from $130.
Oracle has been making headway in the cloud infrastructure market to challenge Amazon, Google and Microsoft. It’s still small by comparison, with $3 billion in cloud revenue during the May quarter, compared with over $12 billion for Google, which counts productivity software subscriptions and cloud infrastructure sales when reporting cloud metrics. But Oracle’s business is growing faster.
Future expansion can also come from sales of Oracle’s database on clouds other than its own.
“The growth rate in multi-cloud is astonishing,” Oracle Chairman Larry Ellison said on Wednesday’s conference call with analysts. “In other words, our database is now moving very rapidly to the cloud, I think because – a few reasons, because the database has now all these AI capabilities, but also, quite frankly, now people can get it in whatever cloud they want.”
Remaining performance obligations, a measurement of money that’s expected to be recognized as revenue in the future, sat at $138 billion, up 41% from a year earlier. Oracle CEO Safra Catz said RPO will likely more than double in the 2026 fiscal year, which ends in May 2026. Revenue for the new fiscal year should come in above $67 billion, she said. That’s higher than LSEG’s $65.18 billion consensus.
Gains from OpenAI’s Stargate artificial intelligence data center project, targeting $500 billion in investments over four years, are not yet included in forecasts.
“If Stargate turns out to be, everything is advertised, then we’ve understated our RPO growth,” Ellison said.
For fiscal 2029, revenue should be above the $104 billion target the company set in September, Catz said.
Still, the company faces the challenge of meeting client demand in cloud.
“Demand continues to dramatically outstrip supply,” Catz said, though she added that the company isn’t having trouble sourcing Nvidia graphics processing units.
Analysts at RBC, who recommend holding the stock, raised their price target to $195 to $145. But they noted that, “with the backdrop of continued capacity constraints, we struggle to see a path to meaningful acceleration in the near term.”
CEO of Chime, Chris Britt, center right, rings the opening bell during the company’s initial public offering at the Nasdaq MarketSite on June 12, 2025 in New York City.
Andres Kudacki | Getty Images
Chime shares jumped 37% in their Nasdaq debut on Thursday after the provider of online banking services sold shares in an IPO that valued the company at $11.6 billion.
Late Wednesday, Chime raised about $700 million in its offering, and existing investors sold an additional $165 million worth of shares. The stock, trading under the ticker symbol CHYM, closed on Thursday at $37.11, up from its IPO price of $27. It’s market cap climbed to $13.5 billion.
Chime’s IPO, from a valuation perspective, represents a big step down from where venture investors like Sequoia Capital valued the company in its last fundraising round in 2021, when private tech markets were raging. The valuation at the time was $25 billion.
Still, Chime’s offering is the latest sign that the fintech IPO market is opening up after a multi-year freeze brought on by rising interest rates and valuation resets. Recent debuts from eToro and crypto company Circle have rekindled optimism in the sector, with both stocks seeing strong initial pops.
Chime reported $518.7 million in revenue for the most recent quarter, a 32% increase from a year earlier. Net income narrowed slightly to $12.9 million, down from $15.9 million in the same period last year.
CEO Chris Britt said Chime has built a loyal user base by serving Americans earning $100,000 a year or less, a group often overlooked by traditional banks.
“Two-thirds of our customer base use us as their direct deposit account and primary account relationship,” Britt told CNBC’s David Faber. “We help our members avoid fees, get access to short-term liquidity, build their credit and build their savings — and it’s that combination of services that really resonates and matters most to the everyday consumer.”
Britt said the company reached $25 million in adjusted profitability in the first quarter and has improved its adjusted profit margin by 40 points over the past two years.
The company’s top institutional shareholders are DST Global and Crosslink Capital. Iconiq was one of the firms that invested six years ago, when Chime raised money at a $1.5 billion valuation.
“We first invested in Chime in 2019 and continued to invest through subsequent rounds because of their singular, unwavering focus on serving everyday Americans — and the trust they’ve built with that core customer base,” Yoonkee Sull, general partner at Iconiq, said in an interview.
The average Chime customer completes more than 55 transactions per month using the Chime card and interacts with the app four to five times a day. Active member growth rose 23% in the first quarter from a year earlier, Britt said, with 8.6 million monthly active users and an increasing number turning to Chime to serve as their primary banking relationship.
Customer acquisition doesn’t come cheap. Chime disclosed in its prospectus that it spent $1.4 billion on marketing between 2022 and 2024. Britt said the retention rate is above 90% once users set up direct deposit.
“Sometimes for people, it takes a change in life — a change in their career, a job change — to be the point in time when they actually make the switch and use us as a primary bank account,” he said.
The company’s core revenue comes from interchange fees, the charges merchants pay when consumers swipe Chime-issued debit or credit cards. Britt said 72% of Chime’s revenue is payments driven, versus traditional banks that rely heavily on fees from overdrafts and minimum balances.
“It’s pretty simplistic,” said Dan Dolev, an analyst at Mizuho. “I’m actually surprised by how unsophisticated that business model is.”
Chime’s performance in the public markets may set the tone for what comes next. Several other fintech players, including Klarna, Gemini and Bullish, have already filed for IPOs publicly or confidentially.
“If it goes well — and you’ll know that in the next two to three months — I think you’ll see much more receptivity” from other companies in the pipeline, said David Golden, partner at Revolution Ventures and former head of tech investment banking at JPMorgan Chase.
“If it doesn’t go well,” Golden added, “I think they’ll continue just to sit on their hands and wait it out.”
Chime is a five-time CNBC Disruptor 50 company, having made the annual list from 2020-2024.
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