Current and former OpenAI employees have grown increasingly frustrated by the fact that the company hasn’t allowed them to donate their equity to charity in years. But OpenAI has finally seemed to bow to pressure, sending out an email from the company’s equity team stating that current and former employees with eligible shares will be able to participate, according to a memo viewed by The Verge.
A lot of money is on the line: It could give employees who got six-figure equity deals in 2019 the chance to donate millions of dollars to charity.
A source familiar with the situation told The Verge that the company is about 18 months late in delivering on its promise, adding that it’s especially concerning because charitable donation of equity is something that the company has used in the past as a way to attract new employees — especially as the AI talent wars heat up. OpenAI rival Anthropic offers optional equity donation matching at a 1:1 ratio, for “up to 25% of your equity grant,” per its careers webpage.
The other catch: It’s a quick-turnaround deadline for participants to decide on the donation amount and specifics, significantly shorter than the minimum SEC-mandated time period for other types of liquidation decisions, such as 20 business days for a tender offer. The source said the short turnaround means some people are finding it tough to participate, especially since OpenAI’s email strongly recommends that participants work with a tax or financial advisor on the decision, and that some people have fewer units to donate due to the lack of notice and indefinite hold on past plans. OpenAI did not immediately respond to a request for comment.
The decision comes after years of OpenAI employees feeling increasingly concerned about the company’s control over their equity, as its valuation soars and its corporate structure shifts. In the past, the company has taken a restrictive approach that’s raised red flags for current and former employees — including concerns that OpenAI could claw back vested equity if employees violated non-disparagement agreements — and this year, it’s been increasingly common for employees to voice their concerns in Slack threads and all-hands meetings about the fact that they haven’t been able to donate.
Past donation rounds occurred in 2021 and 2022, but current and former employees have been frustrated by the gap since the last donation round. Last year, after OpenAI allowed employees to sell about $1.5 billion in shares in a tender offer to SoftBank, employees were told to expect a charitable donation opportunity soon after, but it was put on hold indefinitely. Now that OpenAI has closed its mega-funding round and completed its for-profit restructuring, the company is ostensibly loosening the restrictions.
Late last month, OpenAI announced the finalization of the restructuring, which it had been negotiating with the attorneys general of California and Delaware for more than a year. The company was founded in 2015 as a nonprofit research lab. One of the most high-stakes questions remaining is whether OpenAI’s nonprofit entity will retain control over the technology it builds, most notably the potential development of artificial general intelligence, or AGI — systems that equal or surpass human cognitive ability.
OpenAI’s price per share is also up significantly since last month, when current and former employees were able to sell their equity in a tender offer for about $430 per unit — now, each share is worth about $483 in terms of fair market value, according to the source, who added that they believe the spike is partly due to OpenAI no longer owing its nonprofit as much in potential future profits as it did before.
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