OpenAI completed a tender offer allowing current and former employees to sell roughly $6.6 billion of stock to outside investors, closing on October 2, 2025 at a $500 billion valuation, according to CNBC. More than 600 people took part, and about 75 of them sold the maximum $30 million allowed per person. For a workforce that has largely been paid in private equity rather than cash, the sale converted paper wealth into cash, and into a tax bill that varies sharply depending on what kind of equity each person held and how long they held it.
What changed
Buyers including Thrive Capital, SoftBank, Dragoneer Investment Group, Abu Dhabi's MGX and T. Rowe Price purchased shares from eligible sellers, pushing OpenAI's valuation past the roughly $300 billion level it reached earlier in 2025 and, per TechCrunch's reporting, making it the most valuable private company in the world at the time. Only employees who had held their shares for more than two years were eligible, which excluded much of the workforce hired after ChatGPT's late-2022 debut. OpenAI also raised its per-employee cap to $30 million from a prior $10 million limit, according to Yahoo Finance's account of the sale.
Who is affected
OpenAI has compensated employees with several different forms of equity over the years, including incentive stock options (ISOs), nonqualified stock options (NSOs), restricted stock units (RSUs) and profit-participation-style units tied to the company's capped-profit structure. The form of equity a given employee holds, and when it was granted, largely determines the tax result of selling into a tender. This is not unique to OpenAI: any employee at a richly valued private company who gets a chance to sell shares before an IPO faces the same set of questions.
The after-tax math
The federal tax treatment differs by share type. Vested RSU shares that have already been taxed as ordinary income at vesting produce capital gain or loss on a later sale, long-term if held more than a year past vesting. NSOs generate ordinary income on the spread at exercise, with any further gain on sale taxed as capital gain based on the price at exercise. ISOs are more sensitive to timing: selling within one year of exercise or two years of grant is a disqualifying disposition, which converts part of the gain to ordinary income, while a later sale can be entirely long-term capital gain. Example: an employee sells $2 million of shares that were NSOs exercised years ago at a low cost basis. If the full gain is long-term capital gain, federal tax at the 20% top rate plus the 3.8% net investment income tax comes to roughly $476,000, before any California tax, which has no separate lower rate for capital gains and could add another $260,000 or more at the state's top marginal rate.
Moves to discuss with your advisor
Employees whose shares might qualify as qualified small business stock under Section 1202 may want a CPA to check the requirements before assuming the exclusion applies. Qualifying generally requires original-issue stock in a C corporation held more than five years, among other tests, so newer hires and anyone holding units from a non-corporate entity are less likely to qualify even if the company itself is eligible in principle. Households selling a large block in one year sometimes look at whether a structured or deferred sale, when the buyer and terms allow it, can spread the resulting gain across tax years rather than concentrating it in one, though a tender offer's fixed terms may not leave room for that. The Yahoo Finance reporting also noted that some employees who hit the $30 million cap directed their remaining shares into donor-advised funds, a strategy that can avoid capital gains tax on the donated shares and produce a deduction at fair market value, worth discussing with a tax professional given the size of these positions and California's high combined marginal rates.
What to watch
OpenAI has now run multiple tender offers as it grows toward a possible public listing, and each one recalibrates the cap and eligibility rules based on employee feedback. Future rounds, and any eventual IPO, will determine whether today's paper gains crystallize into cash at similar or different valuations, and whether California or federal tax rules affecting stock compensation change in the meantime.
Sources
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