Resources

OpenAI Employees: Your Equity Works Differently — What to Know

Published on July 27, 2026

If you’re an OpenAI employee holding significant equity, it’s easy to get ahead of yourself. You may already be thinking about what you’ll make from selling your shares if the company goes public. But there’s still a lot of uncertainty, including when such an event might take place.

OpenAI signaled it was considering an initial public offering when it filed confidential paperwork on June 8 with the U.S. Securities and Exchange Commission. News reports initially estimated it could be before the end of the year but have since bumped the timeframe back, citing company insiders who say the IPO could be in 2027.

If it happens, an IPO would likely have a significant effect on your finances. It’s important to have a plan in place early, so you know what to expect and can make strategic moves to handle cash-flow, tax liability and concentration risk. But most IPO guides out there aren’t going to help OpenAI employees — because your equity doesn’t follow typical patterns and rules.

What's different about OpenAI equity

OpenAI started as a nonprofit research lab in 2015. It spun off a for-profit subsidiary in 2019 (still controlled by the nonprofit), which allowed it to attract investors and employees with equity-like interest in the company. Employees received profit participation units (PPUs), a synthetic form of equity that represents a share of company profits. Importantly, these aren’t shares of stock, which means you don’t have any ownership stake.

The company restructured in October 2025, turning the for-profit entity into a public benefit corporation. And with that, PPUs were converted to equity shares, giving current and former employees shares of stock in the company. This could work in your favor for a few reasons.

PPUs had limited returns.PPUs are a form of private company equity-like compensation, which gives the holder a share of future profits. Historically, OpenAI’s PPUs had a profit cap, with anything above the cap going back to its nonprofit parent. But equity shares don’t have a limit on returns.
More market options after conversion.Prior to the conversion, the only possible market for your PPUs was private, through tender offers from investors that allowed you to sell shares for a fixed rate. After the conversion, you could still sell in a tender offer, but you also have the option to hold your shares until you can sell them on the public market. That only works if OpenAI goes through with an IPO, but it’s still more options than you had previously.
The new structure also triggered a change in how the company grants equity. Now, OpenAI employees may hold restricted stock units (RSUs), a common form of equity compensation that promises a certain number of shares upon vesting. RSUs work differently than PPUs, with their own tax rules and strategies. If you hold a mix of equity types from OpenAI, your plan will need to account for the nuances of each.

That being said, there may be some complications to look out for. You need to know the details of how the conversion from PPUs to equity works to understand any steps you need to take after it happens. One possible scenario is when PPUs get converted into company stock: “It would be a non-taxable event because it would be a like-for-like exchange,” says James Bashall, a certified financial planner (CFP®) and certified public accountant (CPA) with NerdWallet Wealth Partners. The actual terms should be explained in your equity documentation. “Find a CPA fast who’s going to tell you exactly how the tax works in the conversion to make sure that you’re making the right elections.”

PPUs vs. RSUs: How your equity is taxed

The terms of OpenAI’s PPUs aren’t public. But PPUs resemble a more established form of equity-like compensation called profits interest units, or PIUs. We don’t have specific IRS guidance on OpenAI’s PPUs, making it essential to review your grant documents and work with a tax professional to confirm how they may be treated.

Stage	Profit participation units (PPUs)	Restricted stock units (RSUs)
When they’re granted	Possibly taxed as ordinary income.Depending on how the award was structured, equity compensation like PPUs may be yours when they’re granted. That gives you the option to file an 83(b) election with the IRS within 30 days of receiving the grant. That election means you opt to recognize the value of the shares as income now, rather than waiting until they vest. The advantage of doing that is you would likely be taxed on a much lower value per unit — profit shares often are granted with a value at or near $0. This would reduce the taxes you owe on the shares considerably.	No tax owed.RSUs are considered a promise to transfer shares to you on a future date, which means they’re not yet your property. As a result, being granted RSUs is not a taxable event.
When they’re vested	Possibly taxed as ordinary income.If you didn’t file an 83(b) election, you may owe ordinary income taxes on the fair market value of the PPUs at the time they vest.	Taxed as ordinary income (but watch out for vesting rules).RSUs may have single-trigger or double-trigger vesting. Single-trigger RSUs typically vest after you’ve worked at the company for a designated period of time. Double-trigger RSUs have to meet a secondary requirement — such as a liquidity event like an IPO — before they become yours.
When they’re sold	Taxed as a long-term capital gain as long as you held the shares for at least a year since they were granted (or vested, if you didn’t file an 83(b) election). If you don’t meet the holding requirement, the IRS treats it as a short-term capital gain, which is taxed at the ordinary income tax rate.	Capital gains taxed.If the value of your shares increased between when they vested and when you sold them, you may owe taxes on the capital gains. Your tax rate depends on how long you held the shares. If you hold for a year or more since vesting, they’ll get the lower long-term capital gains rate.

How to prepare for an IPO

Start with your full financial picture

An IPO has the potential to be the kind of financial event that changes your life overnight. So before you get bogged down in questions about taxes and buy/sell strategies, take a step back and consider what you want that new life to look like. Do you hope to buy a house? Retire early? Send your kids to college?

“I think it’s important to use this as an opportunity to get your whole financial picture in order, and not just focus on this,” says Peter McGinley, a CFP® with NerdWallet Wealth Partners.

Your financial plan sets the tone for everything else before, during and after an IPO. It gives purpose to your decisions, such as how to offset your tax liability after your RSUs vest or what types of accounts to fund with the proceeds you receive from selling your stock. If you’re working with a financial advisor, they’ll walk you through what to do to update or create a financial plan.

A note on concentration risk

Your financial plan may call for liquidating company shares to help you meet other financial goals, such as purchasing a home. But that’s not the only reason to consider selling shares. You also may want to reduce concentration risk — a term used to describe the higher risk you take on when a significant portion of your net worth and income is tied to a single company. That doesn’t mean you should sell all your shares at once or that you shouldn’t hold any long-term. But your financial plan could include how you’ll approach selling a portion of your shares over time and diversifying into other assets.

Understand what you hold

What you do with your company stock — and when — will depend on the mix of equity you hold and their associated tax rules and timing. OpenAI’s unique equity setup will shape your plan in a few key ways.

What details to gather:Compile all the information you can about what you hold — whether PPUs, converted equity shares, RSUs, or a mix — as well as the associated grant dates, cost basis, vesting schedules and requirements and any tax elections previously made.
What liquidity you’ll need:With PPUs or RSUs, you receive the shares without paying any upfront costs. So, you won’t have to decide if and when to exercise options or come up with the cash to do so. But you may have tax bills to plan for.
For example, if your RSUs vest on the day of the IPO, you may have unusually high income to report to the IRS that year. You may need to adjust your withholding before the IPO or plan to pay estimated quarterly taxes. (Typically, your employer withholds taxes on vested RSUs. But the default tax withholding rate is 22% on any supplemental income below $1 million, which may not be high enough to cover what you owe.)
What shares you’ll sell and when: It can be strategic to sell some shares and hold others, depending on the dates your shares were granted and their tax treatment.
For example, if you received PPUs, you likely made an 83(b) election to recognize the value of those shares as ordinary income at the time they were granted (when their value was lowest), rather than waiting until they vested. Those shares may be eligible for the lower long-term capital gain tax rate when you sell, as long as you meet a one-year holding requirement from the time they were granted.

Plan for multiple scenarios

The IPO is an important date to plan around, but it’s really just the beginning. Companies going through an IPO typically have a lock-up agreement, which prevents company insiders (including employees) from selling shares for a certain length of time after an IPO. Lock-ups often last six months, but rules vary. OpenAI’s details will be disclosed when its SEC filings become public.

The lockup period introduces a lengthy waiting period in which market volatility can upset any plan. It’s impossible to be certain where the price will be when you’re free to sell, Peter McGinleysays. “So we don’t try to predict it. We just try to plan for all scenarios.”

At this point, when OpenAI’s IPO plans remain speculative, it’s a good idea to keep your options open. It’s possible you’ll see another tender offer before a public listing. While it’s understandable to want to skip it — the offer is often lower than the expected price at IPO — there are reasons for considering it. “Because you just don’t know what the share price will do in the lock-up period,” Bashall says. “What is the certainty of the pre-IPO price worth to you? And often it’s worth a lot.”

Disclosures

NerdWallet Wealth Partners, LLC ("NWWP") is an SEC-registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training, nor does it constitute an endorsement by any securities regulator.

The information, analysis, opinions, examples, and hypothetical scenarios presented herein are provided for general informational and educational purposes only and do not constitute investment, legal, tax, or accounting advice, or a recommendation to buy or sell any security or adopt any particular investment or tax strategy. This material does not take into account your individual financial circumstances, objectives, or needs and should not be relied upon as the basis for any investment or financial decision. Before taking any action, consult with your own qualified investment, legal, and tax professionals.

Any discussion of a potential initial public offering ("IPO") or other liquidity event is based on publicly available information as of the date of publication. There can be no assurance that an IPO or other liquidity event will occur, or that it will occur on the timeline discussed.

Examples, illustrations, projections, and hypothetical scenarios are provided solely for educational purposes to demonstrate financial planning concepts. They are not intended to predict future events, investment performance, or financial outcomes. Actual results will vary based on individual circumstances, market conditions, tax laws, and other factors.

The tax treatment of equity compensation, including profit participation units (PPUs), restricted stock units (RSUs), and the alternative minimum tax (AMT), is complex and depends on an individual’s specific circumstances. Readers should consult their own tax advisor regarding the tax consequences of any transaction involving equity compensation.

Past performance does not guarantee future results. All investing involves risk, including the possible loss of principal. The views expressed herein are subject to change at any time based on market or other conditions and are current only as of the date of publication.