SoftBank invests $1.5 billion in OpenAI, enabling employees to sell shares in a tender offer.

• CNBC has learned that OpenAI is offering its employees the chance to sell approximately $1.5 billion in shares through a new tender offer to SoftBank.
• OpenAI's recent $6.6 billion funding round was boosted by SoftBank's latest investment, valuing the company at $157 billion.
• The deal was driven by Masayoshi Son, the SoftBank billionaire founder and CEO, who relentlessly sought a greater share in the company, according to a source.

CNBC has learned that OpenAI is offering its employees the chance to sell approximately $1.5 billion in shares through a new tender offer to SoftBank.

The Japanese tech conglomerate will obtain a larger stake in the AI startup with the new financing, and current and former OpenAI employees will be able to sell their shares, according to two sources.

The new tender offer will be available to employees until Dec. 24, and it was initiated by SoftBank billionaire founder and CEO Masayoshi Son, who was determined to obtain a larger stake in OpenAI after investing $500 million in its previous funding round, according to one source.

One of the people stated that the tender offer is not linked to OpenAI's possible plans to transform the company into a for-profit business.

OpenAI and SoftBank declined to comment.

Son's interest in the AI space and backing of private players is highlighted in the news. SoftBank, an early investor in Arm, was mentioned as one of the companies Son has invested in. At a recent conference, Son stated that he is saving "tens of billions of dollars" to make his "next big move" in artificial intelligence. Previously, he had invested in Apple, Qualcomm, and Alibaba.

Glean, Perplexity, and Poolside have recently received investments from SoftBank's Vision Fund 2. SoftBank's two vision funds have a combined total of 470 portfolio companies and $160 billion in assets.

A person close to Son revealed to CNBC that OpenAI's investment aligns with SoftBank's willingness to invest cash, given its capital-intensive business model.

Despite not having SoftBank's financial backing, OpenAI has successfully raised billions in cash. Its valuation has increased to $157 billion in just two years since the launch of ChatGPT. OpenAI has raised approximately $13 billion from various investors, including Thrive Capital, Nvidia, and SoftBank, among others.

The company received a $4 billion revolving line of credit, bringing its total liquidity to more than $10 billion. OpenAI is expected to lose about $5 billion on $3.7 billion in revenue this year, according to CNBC.

OpenAI employees can cash out

The tender offer will be accessible to current and former employees who were granted restricted stock units at least two years ago and have held the shares for at least that duration, one source stated. The unit price of $210 will correspond with the company's most recent funding round.

Amid a stagnant IPO market and soaring company valuations, tender offers have become essential for tech employees. Private companies use such deals to retain employees and alleviate the pressure to go public. Since OpenAI does not have an immediate IPO and a valuation that makes it too expensive for potential acquirers, secondary stock sales are the only viable option for shareholders to realize a return on their investment in the near future.

This week, CNBC reported that Databricks, another private company, is seeking to provide its employees with the option to cash out and relieve the pressure of public markets.

In the past, OpenAI had a more restrictive approach to tender offers, with rules that allowed the company to decide who could participate in stock sales. According to CNBC, current and former employees expressed growing concern about access to liquidity after reports that OpenAI had the power to claw back vested equity.

The company changed its policies on secondary share sales this summer, allowing current and former employees to participate equally in annual tender offers.

The company anticipates increasing secondary sales and may need to access private markets again in the future due to investor demand and the capital-intensive nature of the business, according to a source.

Generative AI is becoming increasingly competitive, with startups like Anthropic and tech giants like Google facing off. The generative AI market is predicted to reach $1 trillion in revenue within a decade, and business spending on generative AI has surged 500% this year, according to recent data from Menlo Ventures.

Last month, OpenAI introduced a search function within ChatGPT, its popular chatbot, to enhance its competition with search engines such as Microsoft's Bing and Perplexity.

Geoff Lewis of Bedrock Capital declares OpenAI as the leading consumer brand for AI at present.