Current and former OpenAI employees have become increasingly frustrated by the fact that the company has not allowed them to donate their equity to charity for years. But OpenAI appears to be finally bowing to the pressure, with the company’s equity team sending an email saying that current and former employees with eligible shares will be able to participate, as seen by the memo. The Verge,
A lot of money is at stake: 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 said The Verge That the company has been nearly 18 months late in following through on its promise is especially worrisome because charitable donations of equity is something the company has used in the past as a way to attract new employees — especially as the AI talent wars have heated up. OpenAI rival Anthropic offers optional equity donations at a 1:1 ratio for “up to 25% of your equity grant,” according to its careers webpage.
The second catch: This is a quick turnaround time frame for participants to decide on the donation amount and specifics, which is 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 change means some people are having difficulty participating, especially since OpenAI’s email strongly recommends that participants should work with a tax or financial advisor on the decision, and some people have fewer units to donate due to the lack of notice and indefinite pause on previous plans. OpenAI did not immediately respond to a request for comment.
The decision comes after years of OpenAI employees feeling concerned about the company’s control over its equity, as its valuation soared and its corporate structure changed. In the past, the company has taken a restrictive approach that has set off alarm bells for current and former employees — including concerns that OpenAI could claw back vested equity if employees violated non-disparagement agreements — and this year, it has become common for employees to voice their concerns in Slack threads and all-hands meetings about the fact that they aren’t able to donate.
Previous donation rounds took place in 2021 and 2022, but current and former employees are frustrated by the gap since the last donation round. Last year, OpenAI allowed employees to sell about $1.5 billion worth of shares in a tender offer to SoftBank, with employees told they would expect a charitable donation opportunity soon, but it was put on hold indefinitely. Now that OpenAI has closed its mega-funding round and completed its profit-led restructuring, the company is apparently looking to ease restrictions.
Late last month, OpenAI announced the finalization of the restructuring 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 non-profit research laboratory. One of the top questions remaining is whether OpenAI’s nonprofit arm will retain control over the technology it creates, particularly artificial general intelligence, or AGI — the potential development of systems that equal or exceed human cognitive ability.
OpenAI’s per share price has also risen 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 fair market value terms. According to the source, they believe the spike is partly due to OpenAI no longer owing as much to its nonprofit’s potential future profits as it used to.