OpenAI has completed a $7 billion purchase of shares from current and former employees at an $852 billion valuation, CNBC and TechCrunch reported on August 10, citing Bloomberg. The valuation matches the company's record $122 billion funding round in March. It is the third liquidity event for OpenAI staff, following a $1.5 billion tender in November 2024 and a $6.6 billion sale in October 2025 at a $500 billion valuation.
What happened
The tender had been in the works since the March round closed, according to CNBC. OpenAI confidentially filed for an initial public offering with the Securities and Exchange Commission in June, but TechCrunch notes that Chief Executive Sam Altman has since said going public in 2026 would be ill-advised. A large private tender gives employees a way to convert paper wealth into cash without waiting for a listing.
Who is affected
Sellers include current and former employees, many of whom live or worked in California. Reports did not disclose per-person limits. For a single employee, a sale in the millions is plausible, which puts the proceeds squarely in the top federal brackets and, for California residents, in the state's highest bracket as well.
The after-tax math
Proceeds from a tender are generally treated like any other sale of stock: the seller subtracts basis from the price and reports a gain. The details decide how much of the check is kept.
- Holding period. Under IRS rules, shares held more than one year produce long-term gain, taxed at up to 20%. Shares held a year or less produce short-term gain taxed at ordinary income rates.
- The surtax. Many sellers will also owe the 3.8% net investment income tax on gains once modified adjusted gross income exceeds $250,000 for joint filers or $200,000 for single filers.
- Basis depends on how shares were acquired. For restricted stock or units, basis is generally the value already taxed as wages at vesting. For stock from exercised options, basis starts with the exercise price, plus any amount previously taxed as compensation. Incentive stock options sold before meeting their holding requirements can turn part of the gain into ordinary income.
- Compensation risk. When a buyer pays employees more than the fair market value of the stock, the excess can be treated as compensation rather than capital gain. Tender documents usually address this.
- State tax. California taxes capital gains as ordinary income. Former employees who have moved away may still owe California tax on the portion of gains tied to compensation earned while working there, depending on how the shares were granted.
Example, illustrative round numbers, federal tax only: a former engineer sells shares for $2 million. They came from restricted stock units that vested more than a year ago at a total value of $500,000, which was already taxed as wages. The long-term gain is $1.5 million. If all of it falls in the 20% bracket and the 3.8% surtax applies in full, federal tax on the sale is about $357,000, leaving roughly $1.64 million before state tax. Had the same shares vested within the past year, the gain would be short-term and taxed at ordinary rates, which for top earners are considerably higher.
Moves to discuss with your advisor
- Confirming basis for each lot sold, since broker forms for private stock sales sometimes report incomplete basis for equity compensation.
- Whether estimated tax payments are needed this year, because tender proceeds typically have no withholding for capital gains.
- How state residency history affects sourcing of gains for employees who have relocated.
- Whether charitable giving, such as a donor-advised fund contribution in the same year, fits the household's plans for offsetting a concentrated gain.
- How remaining shares fit into an overall plan given the uncertain timing of a public listing.
What to watch
Employees who did not sell, or sold only part of their holdings, will be watching the company's IPO timeline. A public listing would bring lockup periods and a market price, while further private tenders would offer additional windows at negotiated valuations. Each path has different implications for holding periods and the timing of tax.
Sources
After TAX is an independent publication. Articles are general information, not tax, legal or investment advice. Consult a licensed professional about your situation.
