What the OpenAI IPO Means for Your Employee Equity
In June, OpenAI filed for an IPO with the SEC, officially starting the process of going public. For current and former employees, that means years of accumulated equity can soon be turned into life-changing wealth. The steps you take after the IPO will determine how that wealth is taxed and how much you get to keep. Here are the questions worth answering before the window opens.
When will OpenAI go public?
Right now, OpenAI is expected to target an IPO date in early 2027. OpenAI had originally been targeting a late 2026 listing, with Goldman Sachs and Morgan Stanley leading the deal. However, recent reports indicate that the company will likely extend that timeline into next year.
A few factors may be driving that delay:
SpaceX's stock fell sharply after its June 12 public debut, making advisers cautious about bringing another high-profile AI company to market so soon.
Broader weakness in tech stocks has made a high-priced offering harder to sell to retail investors.
CEO Sam Altman has reportedly insisted on a $1 trillion valuation that the current market may not support.
CFO Sarah Friar has consistently recommended waiting until OpenAI is better prepared for life as a public company.
The most likely outcome, based on current reporting, is that OpenAI’s rival Anthropic will go public first in late 2026, with OpenAI following sometime in early 2027. That said, conditions can shift quickly, and OpenAI has said publicly that it will list when the timing makes sense.
Will my equity be taxed when OpenAI goes public?
For many employees, yes. Employees often hold double-trigger restricted stock units (RSUs), which don't fully vest until two conditions are met: a time-based schedule and the IPO itself. When OpenAI goes public and activates that second trigger, all of your time-vested shares will settle at once. The full value is then taxed as ordinary income that year. OpenAI will withhold a percentage of your shares to cover this tax, but it’s worth checking to make sure the withholding rate matches your actual expected tax rate.
When can I sell my OpenAI shares?
After an IPO, there is typically a lockup period that must expire before you can sell your shares. This will likely run for 90 to 180 days after OpenAI goes public. OpenAI has not published the specific terms of its lockup yet, and those details will not be confirmed until the company files its public prospectus closer to the listing date. The same rules generally apply to current and former employees.
How will my equity be taxed when I sell it?
The tax rate on your gains depends on how long you have held your shares before selling.
If you sell within a year of your shares vesting, any gains will be taxed as ordinary income.
If you hold your shares for more than a year before selling, those gains qualify for long-term capital gains rates. These rates are typically much lower than your income taxes.
For RSU holders, the holding clock starts at vesting, not at grant. If you are holding double-trigger RSUs, the clock won’t start running until OpenAI goes public.
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What is the difference between a tender offer and an IPO?
OpenAI has run several tender offers over the past few years. During a tender offer, the company lets a limited number of employees sell a portion of their shares to outside investors at a set price. This allows employees to turn equity into cash before the company goes public. In October 2025, for example, over 600 current and former OpenAI employees sold a combined $6.6 billion in shares, with some allowed to sell up to $30 million each.
The IPO will be different. After OpenAI goes public, the company will list its shares on a public stock exchange, making them available to anyone. The main difference for employees is that tender offers are limited. There are caps on how much you can sell, who can participate, and at what price.
After the IPO:
The scale of liquidity will be much larger
The price will be set by public market demand rather than negotiated privately
The shares can be traded freely once the lockup period expires
Should I sell my equity right away?
In most cases, selling everything at once is not the best approach. Of course, the instinct to sell your shares quickly makes sense. Investing too much in a single company is always risky, and a bad quarter can sink a newly public stock overnight. The longer you hold onto your OpenAI shares, the riskier that can be.
However, selling it all at once in a single year can mean a huge tax bill. The good news is that with the right strategy, you can diversify your portfolio without having to sell too much at one time.
What is the most tax-efficient way to sell my equity?
There are a number of options for diversifying your investments without facing a massive tax bill.
Exchange funds: This strategy lets you pool your OpenAI shares with other investors holding concentrated positions in different companies. In return, you get a proportional stake in a diversified basket of stocks without actually selling anything. No sale means no immediate tax bill, and the money that would have gone to the IRS can keep growing. However, you usually have to wait at least seven years before you can exit the fund and sell your equity.
Donor-advised funds (DAFs): If you plan to give to charity, you can donate your shares directly to a DAF. The DAF will sell the shares on your behalf with no capital gains tax and hold the cash. When you’re ready to give the cash to a charity of your choice, you will get an income tax deduction in return.
Charitable remainder trusts (CRTs): If you are nearing retirement and want a steady income stream, a CRT lets you contribute your shares to a trust tax-free. The trust sells the shares, reinvests the full proceeds, and then pays you or your beneficiaries a regular income for a set term. Any money that remains at the end of the term goes to a charity of your choice. The only catch is that a CRT is irrevocable once funded.
Direct indexing: After you sell and reinvest, direct indexing lets you buy individual stocks rather than an entire index fund. That way, you can sell stocks that do poorly and use the loss to offset future gains in your portfolio. This is called tax-loss harvesting, and it’s one of the best ways to balance your tax bill over time.
Securities-backed lending: If you need cash but want to avoid selling, you can borrow against your shares, using them as collateral. No sale occurs, so no capital gains tax is triggered. The main risk is that if the stock drops sharply, your lender may require additional collateral or could demand full repayment right away.
Section 351 exchange: A Section 351 exchange works similarly to an exchange fund but without the seven-year lockup. You contribute your shares to a newly created exchange-traded fund alongside other investors, each bringing a different concentrated stock. However, the IRS requires that no single stock make up more than 25% of the total contribution, so this only works for employees who already have a diversified portfolio outside of OpenAI stock.
The right combination depends on your position, timeline, and goals. A fiduciary financial advisor can help you make the right choice for your situation.
What should I do next?
The lead-up to an IPO is the perfect time to plan. Right now, all of your options are still open. Once the lockup expires, it may be harder to game-plan the right strategy.
Here are a few things worth doing now:
Know what you own: Pull up your equity statements and identify your grant types, cost basis, vesting dates, and holding periods. Employees who lump all their shares into one bucket often make costly mistakes when it comes time to sell.
Model your taxes: Run the numbers on what taxes you would owe for different strategies.
Plan your broader financial strategy: How much of your net worth is tied up in OpenAI? What do you need this money for? Do you have charitable goals? The answers to these questions will shape which strategies make the most sense for you.
Talk to a financial advisor: The choices you make after OpenAI goes public can make all the difference for how much of your equity you can convert to cash. Getting the right plan in place before the window opens could save you thousands in taxes.
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