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OpenAI CEO Sam Altman testifies sooner than a Senate Commerce, Science, and Transportation Committee listening to titled “Winning the AI Race: Strengthening U.S. Capabilities in Computing and Innovation,” on Capitol Hill in Washington, D.C., U.S., May 8, 2025.
Jonathan Ernst | Reuters
OpenAI’s skyrocketing valuation over the last few years has became a large number of workers on the synthetic intelligence startup into paper millionaires.
But when the ones workers need to donate a portion in their fairness to charity, they have been not able to take action, in line with 3 folks with wisdom of the topic. The corporate has deprioritized the problem in spite of workers’ issues, mentioned the folk, who requested to not be named for concern of retaliation.
For OpenAI, which has a extremely extraordinary fairness construction because of its origination as a nonprofit, it is a topic of keeping up tight regulate over the shareholder base. An OpenAI spokesperson instructed CNBC that the corporate is not singling out philanthropic donations, and is simply working towards excellent governance.
“We have a cap table for a reason and need to keep that cap table well-managed and know who’s on it,” the spokesperson mentioned.
Equity donations by means of donor-advised budget (DAFs) are a significant attention at high-valued startups as a result of salaries have a tendency to be modest, and a good portion of an worker’s internet price is wrapped up of their choices or inventory holdings. By donating their fairness as an alternative of money, staff can obtain charitable deduction advantages and probably keep away from capital good points taxes and different levies, resulting in a company receiving up to 40% greater than it differently would, professionals instructed CNBC.
What makes OpenAI distinctive amongst tech startups is that it was once arrange as a nonprofit analysis lab in 2015, and has persisted to perform with a nonprofit mum or dad, at the same time as the corporate has commercialized merchandise like ChatGPT and headed down a distinctly for-profit trail. Rather than conventional fairness, workers obtain so-called cash in participation devices (PPUs) that can not be transferred with out corporate approval.
It’s a subject that is arise again and again at OpenAI in Slack threads, all-hands assembly and interior discussions, however the corporate has persisted to withstand making adjustments that may loosen restrictions, the resources acquainted mentioned.
Last yr, OpenAI held an worker comfortable be offering, permitting staffers to promote a few of their fairness to the corporate. Executives and individuals of the corporate’s finance team of workers instructed workers on the time that they will have to be capable of be expecting a charitable donation alternative quickly after the comfortable, two folks mentioned. But the corporate has indefinitely driven again the timeline, in line with the resources. At this level, one individual mentioned, OpenAI is “at least a year late” in providing the chance to donate.
Meanwhile, the worth of worker holdings helps to keep going up.
In March, OpenAI closed a $40 billion financing spherical led by means of SoftBank at a $300 billion valuation. That’s up greater than tenfold from early 2023, which was once quickly after the general public release of ChatGPT, and up twentyfold from two years sooner than that. Go again to 2019, and the corporate was once valued at $1 billion.
Based on that math, a staffer who joined in 2019 with $100,000 price of fairness within the corporate would now personal a stake price about $3 million.
OpenAI CFO Sarah Friar mentioned at an all-hands assembly forward of the newest financing that the corporate’s precedence was once remaining its investment spherical, in line with an individual aware of the topic. After that, Friar mentioned the focal point will be the corporate’s for-profit conversion, and OpenAI would in the end flip its consideration to permitting charitable donations via inventory, the individual recalled.
‘Mystified’
In questions submitted by means of Slack forward of the assembly, workers requested so much about donating fairness, resources mentioned.
“I’m mystified why a startup would disallow employees from contributing, because it’s a great opportunity not only for their charitable giving impulses but also for their taxes,” Christina Kramlich, co-founder of wealth control company Cantata Wealth, mentioned in an interview. Kramlich, who is primarily based within the Bay Area and has labored at a couple of tech startups, mentioned DAFs are “an incredibly winning strategy, from the perspective of the contributing donor, as well as the recipient charity.”
DAFs permit workers to obtain a right away fair-market-value tax deduction and to keep away from taxes, amounting to anyplace from 20% to 40% of the inventory cost, that may be incurred in the event that they offered stocks after which donated the money proceeds. Employees can advise the DAF on their charities of selection.
Because DAFs are tax-exempt nonprofits, they get the good thing about liquidating the worker’s stocks with out incurring capital good points, which all ends up in more cash for the charity. OpenAI showed that it has partnered with Dechomai as its donor-advised fund.
OpenAI mentioned it has introduced two fairness donation alternatives previously — in 2021 and 2022 — and that it made a unique exception for no less than one worker in 2023. But resources instructed CNBC they are nonetheless pissed off with the moving timelines and that it is been goodbye because the remaining alternative.
Some personal firms have what quantities to veto energy over any transfer workers make with their stocks, a option to workout larger regulate over their cap tables. OpenAI does not permit workers to switch their fairness with out specific board approval, in line with an settlement considered by means of CNBC.
OpenAI Chief Executive Officer Sam Altman seems on display screen right through a chat with Microsoft Chairman and Chief Executive Officer Satya Nadella on the Microsoft Build 2025 convention in Seattle, May 19, 2025.
Jason Redmond | AFP | Getty Images
Once the corporate restructures — and probably is going public down the street — it’s going to be more straightforward for it to facilitate fairness donations, an OpenAI spokesperson mentioned.
OpenAI could have a vested pastime in retaining sure charities off its cap desk, as a result of many workers are hooked in to other, from time to time competing, sides of AI protection. Nonprofits concerned about such problems might be observed as hostile to the corporate’s competitive commercialization efforts.
The dispute over inventory donations is not the primary time workers and control were at odds over inventory possession.
With no IPO at the near-term horizon and a ticket that makes OpenAI too pricey to be received, the one manner for shareholders to at this time notice any cost from their fairness is thru secondary inventory gross sales.
While OpenAI has applied plans to permit stakeholders to promote a portion in their stocks every year, it up to now had the ability to claw again vested fairness, restricting participation, CNBC reported remaining yr. Soon after that file, OpenAI reversed its insurance policies towards secondary percentage gross sales, permitting present and previous workers to promote within the comfortable gives.
But the problem of donations stays a priority. And whilst workers look ahead to that chance, they are coping with an more and more sophisticated company construction.
Earlier this month, OpenAI introduced {that a} nonprofit would retain regulate of the corporate even because it restructures right into a public get advantages company. Bret Taylor, OpenAI’s board chairman, mentioned that the transfer will regulate the fairness construction “so that employees, investors, and the not-for-profit can own equity in that PBC.”
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