"Last fall, more than 600 OpenAI employees went from being paper millionaires to the real thing by selling $6.6 billion worth of the company's stock. Also a news item: The San Francisco real estate market especially for high-end stuff millionaires want to live in is booming. Before you correlation/causation folks jump in: No, we don't know that every OpenAI employee who turned their shares into cash immediately sank that money into San Francisco housing. But something is goosing the local real estate market, and everyone in town believes it's AI money."
"This market is nuts. 3 bedroom in SF we were going to see this week has over 10 offers, 9 days after being listed. And all of this is happening before OpenAI and Anthropic go public, which will unleash even more money into a market that's already incredibly frothy. That's because the traditional Silicon Valley wealth cycle has changed. In the old days, you signed on to work at a risky, high-flying startup and if everything worked out, your shares in that startup would turn into real money years later, when it turned into a public company."
"Now you don't need to wait for the IPO: It's routine for big, valuable private companies to stay private, while giving employees and investors a way to cash out before going public, via secondary stock sales. That's not an AI innovation. We've seen it for years through companies like Stripe, which routinely manages share sales for current and former employees, minting millionaires without ever going public. Elon Musk's SpaceX, which is about to go public, has been doing the same for its employees for years."
"But even by those standards, what happened at OpenAI last fall is something extraordinary. The Wall Street Journal reports that Sam Altman's company, which had previously limited share sales to $10 million per employee, boosted the limit to $30 million, and that about 75 employees sold the full amount. And all of that new"
More than 600 OpenAI employees sold $6.6 billion worth of company stock, turning paper wealth into cash. San Francisco’s high-end real estate market is booming, with listings attracting heavy competition shortly after going on the market. The money driving the surge is widely believed to be AI-related, even though direct cause and effect are not confirmed. The timing is notable because OpenAI and Anthropic are expected to go public, which could inject additional capital into an already overheated market. The wealth cycle has shifted from waiting for IPOs to using routine secondary sales at large private companies, as seen in companies like Stripe and SpaceX. OpenAI’s reported increase in per-employee share-sale limits enabled unusually large cash-outs.
Read at www.businessinsider.com
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