SK Hynix Feels "Inferior" in Comparison: OpenAI Employees Cash Out $6.6 Billion in Stock
- Key Insight: By allowing over 600 employees to cash out $6.6 billion in stock before its IPO, OpenAI has orchestrated a rare tech wealth bonanza. The maximum payout per person reached $30 million, creating a wealth effect far surpassing traditional tech company bonuses, serving as a concentrated reflection of the valuation explosion in the AI industry.
- Key Elements:
- Cash-out Scale: Over 600 employees collectively cashed out $6.6 billion, with approximately 75 individuals receiving the $30 million cap each.
- Wealth Appreciation: The book value of equity held by employees who joined seven years ago has increased over 100-fold, vastly outpacing the roughly three-fold gain of the Nasdaq index over the same period.
- Talent Competition: OpenAI retains core talent through high salaries and massive bonuses (some positions exceeding $500,000 annually), competing against compensation packages worth $300 million offered by rivals like Meta.
- External Impact: The cashed-out funds have driven up San Francisco rents, exacerbating wealth inequality; some employees have donated their remaining stock to charitable accounts.
- IPO Pending: This cash-out serves merely as a prelude before the IPO. The public listing plans of OpenAI and Anthropic will likely create millions more millionaires (in the tens of millions).
Original Author: Long Yue
Original Source: Wall Street Insights
Recently, news that SK Hynix employees received an average bonus of 6.1 million RMB per person went viral across the internet. But compared to the cash-out by OpenAI employees, this figure might be just 'small change'.
Last October, OpenAI completed a rare large-scale employee stock cash-out. According to the Wall Street Journal, over 600 current and former employees cashed out a total of $6.6 billion (approximately 480 billion RMB) in this round of transactions. Of these, about 75 individuals reached the maximum limit of $30 million each.
This marks the first large-scale payout since OpenAI raised the individual cash-out limit from the previous $10 million to $30 million. The report, citing sources familiar with the matter, stated that this adjustment was made 'in response to investor demand'.
The timing is also noteworthy: OpenAI requires employees to hold their shares for two years before selling. This means the cash-out was the first time many employees who joined after the launch of ChatGPT could convert their paper wealth into real money.
100x in 7 Years: The Moment a 'Lottery Ticket' is Cashed
OpenAI first granted equity to its employees seven years ago. According to reports, the book value of those shares held by employees has now grown over 100 times.
For comparison, the Nasdaq Composite Index rose approximately threefold over the same period.
OpenAI is currently the highest-valued technology startup globally, with its latest funding round valuing the company at $852 billion.
This rate of wealth creation is rare even in the history of the technology industry. Although hundreds of companies went public during the internet bubble era, most employees had to wait a long time post-IPO to cash out, and some ended up with nothing after the bubble burst. This time, OpenAI employees have achieved large-scale monetization before the company even went public.
A $30 Million Ceiling: Some Still Think It's 'Not Enough'
The cash-out limit was set at $30 million per person, but for some top-tier researchers and engineers, this figure still isn't enough.
Previously, OpenAI's cash-out limit was set at $10 million, which had already dissatisfied some core employees who 'theoretically could sell more'.
In terms of compensation, OpenAI's offers are equally aggressive. According to its website, some technical positions offer annual salaries exceeding $500,000. Last August, reports indicated that OpenAI granted some employees one-time bonuses amounting to millions of dollars.
Last year, Meta offered compensation packages worth up to $300 million to retain top research talent. The talent war across the entire AI industry has pushed compensation to heights rarely seen in modern tech history.
The Wealth Effect: Rent Rises in San Francisco, Some Start Donating
The $6.6 billion cash-out is more than just a set of numbers.
This wave of wealth is driving up rents in San Francisco and raising concerns externally about widening inequality within the city.
Some employees have chosen another way to handle this money by placing their remaining shares into donor-advised funds. These are charitable investment accounts that promise future donations while allowing for immediate tax deductions. Reports suggest that some ordinary employees who did not originally expect to receive such wealth have also joined the donations.
At the executive level, the wealth is even more staggering. OpenAI President Greg Brockman testified in court this week that the value of his equity holdings is approximately $30 billion. CEO Sam Altman has stated he holds no company shares, citing the company's non-profit origins. However, reports indicate some investors anticipate he will receive equity if he wins the ongoing legal battle with Elon Musk regarding OpenAI's transition.
Beyond the IPO: An Even Greater Wealth Effect Lies Ahead
This cash-out was just a preview.
OpenAI and Anthropic are preparing for their respective IPOs, which are expected to be among the largest in tech history. When they happen, thousands of ordinary employees will have the opportunity to sell their shares, and many of them will overnight join the ranks of multi-millionaires.
The Wall Street Journal characterized this cash-out as 'a preview of the wealth tsunami about to hit San Francisco and other tech hubs'.
Comparing this to the SK Hynix story: The 6.1 million RMB bonus for Hynix employees was built on the semiconductor super-cycle and HBM technology bets, backed by the cyclical rotation of the entire industry. In contrast, the wealth of OpenAI employees stems from the valuation explosion of a single company riding the AI wave — and this company's IPO door has not yet opened.
