SoftBank pours another $1.5B into OpenAI to buy out employee shares

Masayoshi Son really wants in on OpenAI, and he is willing to pay top dollar to get it.

OpenAI is allowing current and former employees to sell roughly $1.5 billion worth of stock to SoftBank in a fresh tender offer, according to CNBC. Workers have until Dec. 24 to decide if they want to cash in their shares.

Son gets his bigger slice

The deal is being funded through SoftBank's Vision Fund 2 and was largely driven by founder Masayoshi Son. Son previously invested $500 million in OpenAI's massive $6.6 billion funding round back in October, but he remained persistent in pushing for a larger stake.

SoftBank has been aggressively hunting AI deals lately, placing bets on startups like Glean, Perplexity, and Poolside. Son even teased at an October conference that he was hoarding tens of billions of dollars for his next big AI push. Buying secondary shares in OpenAI directly aligns with that playbook.

For OpenAI employees, the tender offer provides rare liquidity. Eligible participants include current and former staff who were granted restricted stock units at least two years ago and have held onto them since. The buyout price is set at $210 per share, exactly matching the $157 billion valuation from the October round.

Secondary sales like this have become a lifeline in a frozen tech IPO market. OpenAI is now far too expensive to be acquired, and a public listing is not happening anytime soon. Without tender offers, employees are left staring at massive paper fortunes they cannot touch.

OpenAI previously exercised strict control over who could sell secondary stock, which caused internal friction after reports surfaced that the firm could potentially claw back vested equity. But the company reversed course in June, creating a level playing field for both current and former staff to participate in annual liquidity events.

The burn rate reality

While this deal helps employees, it also highlights the astronomical capital demands of the frontier AI race.

OpenAI's liquidity currently sits above $10 billion, buoyed by its recent equity round and a $4 billion revolving credit line. But the company is burning through cash fast. CNBC confirmed that OpenAI expects to lose about $5 billion this year on roughly $3.7 billion in revenue.

Sources close to the deal noted that the $1.5 billion transaction is not tied to OpenAI's ongoing efforts to restructure into a for-profit corporation. However, given relentless investor appetite and the startup's massive compute bills, more secondary sales are expected down the road.

Why it matters

We think this deal is less about OpenAI raising capital and more about keeping its top talent from walking out the door.

With Meta, Google, and Anthropic aggressively poaching machine learning talent, paper equity only goes so far. Giving early employees a chance to lock in generational wealth at a $157 billion valuation keeps morale high and eases the pressure to rush an IPO before the business model truly matures.

For SoftBank, it looks like Son is buying his way to the table at almost any cost. SoftBank missed the early foundational waves of generative AI, and paying a premium for secondary shares is the fastest shortcut to owning a meaningful piece of the market leader.

The lingering question is sustainability. OpenAI is losing significantly more money than it brings in. As long as mega-investors are willing to backstop the burn, the machine keeps running. But if revenue growth stalls or compute costs fail to drop, these sky-high secondary valuations will be the first thing to get questioned.