How much damage has the leadership turmoil of OpenAI caused to the company and its investors over the past week? The upcoming employee stock ownership sale by OpenAI will test this point. Nevertheless, large investors are still optimistic about the overvaluation of the company.
According to two investors who have direct knowledge of the situation, with the return of OpenAI CEO Sam Altman, the employee stock sale plan will return to track.
Prior to the controversy surrounding Ultraman's dismissal, the plan for OpenAI to sell existing shares to investors, including some employee shareholding, was already in place. At the time, it was expected that this transaction would value the company at $86 billion. For external investors, this matter is of great significance because it is the simplest and most direct way for them to buy OpenAI shares.
After the turbulence of the management, the upcoming sale of employee stock ownership will be a test for OpenAI, a test to verify whether investors' interest in OpenAI has changed.
Valuation to be verified
The conflict between Ultraman and OpenAI's board of directors has exposed some issues with OpenAI, such as whether it is reasonable for a non-profit board to oversee the governance system of a for-profit company.
Some venture capital firms, such as Thrive Capital, Sequoia Capital, and Khosla Ventures, are actively promoting Ultraman's return to his original position in order to protect his existing shares in OpenAI.
At present, investors still believe that the new share sale can double the valuation of OpenAI. At the beginning of this year, Microsoft promised to invest $10 billion in OpenAI, which was valued at $29 billion at the time.
The valuation of $86 billion was announced last month, when OpenAI was still the most popular startup in Silicon Valley and a leading force in the artificial intelligence boom. The chatbot ChatGPT launched by the company a year ago has sparked a wave of artificial intelligence.
Vinod Khosla, an early investor of OpenAI, said, "Valuation is a function of investor sentiment, but the company's situation remains unchanged from last week and may even improve."
But some analysts also suggest that OpenAI will be hit by recent infighting events, and competitors such as Google and Amazon will take this opportunity to promote their generative artificial intelligence services to businesses and consumers.
Anat Alon Beck, Associate Professor of Corporate Law and Governance at Case Western Reserve University School of Law in Ohio, USA, said, "This is damaging OpenAI's valuation - we all know this. I believe that if they don't take appropriate measures now, their valuation won't rise."