@Samuel could we get some clarity on what you consider being "valued"? At what stage in the funding round do you consider a valuation to have been made for the purposes of this market? It seems like there's a lot of disagreement among the traders here.

@Jacy it was always going to be messy with a private company and as far as I'm aware microsoft is doing something weird with revenue split so it's even messier than usual

Since it's now confirmed that no dollars will trade hands at $75B valuation at higher, I think this should be resolved as "No". Otherwise, it should have been resolved to "Yes" on October 14th when the price was initially agreed on.

@WillSorenson

Why would the terms of the deal including the valuation of $86 billion being agreed to and signed for not be sufficient?

Why would dollars trading hands be the specific hurdle required?

If I sign a lease for an apartment, it’s official before any dollars trade hands.

When Sam Altman signed the contract to return as CEO, no dollars traded hands.…

In cases where a written contract exists, dollars trading hands is the result or byproduct of the contractual agreement, not the definition or inception of it.

@TP8ac2 Don't have any shares here, but zero of the headlines about this story (that I have seen) back up your assertion. Every single one of them is written in the future tense, as something that will happen but has not happened yet:

-OpenAI's Valuation Reportedly Set To Hit At Least $80B

-OpenAI in Talks for Deal That Would Value Company at $80 Billion

-ChatGPT parent OpenAI seeks $86bn valuation

-OpenAI in talks to sell shares at $86 billion valuation

@Domer Yeah I was hoping we'd get something more official before EOY. Unfortunate that OP is inactive.

@Domer Those articles are old or based on old information. Terms of the tender offer have been agreed to and contracts will be signed this month. Reporting on this will come in the next few weeks. If there wasn’t uncertainty about the judgement of the market creator or the process of resolving the market if the creator remains inactive I’d be going all in.

Hey, all -

On the update of OpenAI’s $86B employee share sale tender offer being extended to Jan 5, it is clear that this deal will not close before the end of 2023. The resolution to this market is most logically a closed deal - The valuation is meaningless until a deal is closed. Anyone who works in PE/VC knows this.

There was a possibility this deal would have closed before the end of the year before the CEO ouster - at that time I was bullish on markets valuing OpenAI at $70B+ before year end. This fiasco has delayed the timeline, this is in print, and in any case this market cannot be resolved until we get official confirmation (term sheets signed) of a closed deal.

https://www.bloomberg.com/news/articles/2023-11-30/openai-tender-for-employee-shares-is-on-and-extended-to-jan-5?embedded-checkout=true

“OpenAI Gives Employees Extra Month to Opt Into Plan to Sell Shares

• Concerns over the tender had arisen amid tumult over Altman

• AI startup is giving staff an extra month to opt into the sale

In the words of another trader, if anyone follows sports - “When a trade gets announced, the reporters will say it's a completely done deal, when usually it takes days to become officially recorded in the league.

Again this doesn't mean they're lying, it's just for the sake of convenience. But if you had a market for "Will James Harden be a Clipper by X date" it would not be accurate to say that he became a clipper the day it broke on Twitter, it would be accurate to say he became a Clipper the day it officially went through.”

- Let’s keep consistent standards of evidence across markets.

@SimranRahman I understand the case you are making, but I disagree that the deal must close for the valuation to hold. The Tender offer was put on hold with the chaos, and now it’s back on with the same terms. The offer for employees is just being extended so that additional employees have the option to tender their shares at the $86 billion valuation.

Regardless, we will get a further stream of reporting confirming the deal terms and the $86 billion valuation in the days to come. Additionally, you are assuming that the deadline for employees to tender their shares means the deal will not have closed (been signed) before that.

@SimranRahman exactly the same issue burned me with the UAW strike end date issue. A deal is "done" before it's actually "done". People blame you if you delay for final confirmation. But when a deal is rejected last minute, you're in hot water if you've called it too early!

@Ernie in this case... Man I don't know. Just saying "things seem on track" is risky. It's done when it's done. If they CAN back out, it ain't done yet. If they CAN'T back out, it is done. Can they back out even into 2024? Seems like yes. So it ain't done.

That said this market isn't exactly about the offer being done. It merely says there is a high valuation. The fact that the offer is proceeding with that implies that people with money have convinced all parties and their lawyers that they really believe this. That convincing seems identical to "having" a valuation. Here I take the opposite side from above. There are lots of cases where there's a human word meaning such as jail/prison meaning "you are locked up" but official experts make subtle distinctions. Mm usually falls back to the expert distinction, which is legalistic but sometimes unsatisfying.

Imagine a market about if I ask my cousin if he's ever seen a "poisonous snake". He speaks native English and would know what I mean (a snake that if it bites you, you could get poisoned and die!). The fact that biologists would say "venemous" for this case and reserve "poisonous" for another case is, to me, irrelevant. Mapping that here, imagine two new hire OpenAI eng: "whoah did you hear we are valued at 86b?" "Yeah it's great!!!" That would be a perfectly fine convo and we don't need a lawyer going " AKshually... "...

With this thing, once the terms are announced internally at 86b and the plan is really "happening", they have a "valuation". Not to the IRS but to nearly all parties involved.

Anyway just some ideas, I have no horse in this race but suffered a lot around this type of colloquial/legal distinction

@Ernie Good points. I agree, but also believe that the terms of this deal will have been signed by the key parties (management and investors) before year-end despite employees having longer to decide whether to tender their shares. We shouldn’t need to wait to know the total amount of shares tendered at the already confirmed/signed/accepted $86 billion valuation.

@TP8ac2 yes! If so and it's already signed, and tender payments would come out of an already finalized pool, that's a super boost to that interpretation. Thanks, I had missed that.

@TP8ac2 Alright - ignoring the extension for employee opt-in, the minimally acceptable criteria is still a closed deal. It reportedly won’t close until January. It was previously on track to close in December. Per CNBC:

• OpenAI’s tender round is back on track following Sam Altman’s return, with closing extended to January, sources say.

• It was temporarily jeopardized by Altman’s ouster at the hands of his board.

• The offer will value the company at $86 billion and employees will have until Jan. 5 to decide whether to participate.

https://www.cnbc.com/amp/2023/11/30/openai-tender-offer-on-track-despite-leadership-fracas-sources.html

@Ernie thanks for chiming in. I too have noticed that quite a few Manifold Markets essentially come down to groupthink or perception on technical definitions - which is why it’s important to not accept a colloquial, subjective definition “deal is on track” “company is valued at” “Sam is CEO of OpenAI” until we see hard evidence that is irrefutable.

Yes, at any time the deal can be taken back off track - just like the ouster that blindsided everyone, including the company’s own investors.

If we accept a loose interpretation of “valued more than $75B before the end of 2023”, then this market falls apart - it would be YES in October when the news first broke, but NO when the deal was on pause last week - we can’t resolve today or at the end of 2023 until this deal is completed.

@SimranRahman The key confirmation of the valuation is the terms of the deal being agreed to and signed by management and investors, not when the tender offer to employees is completed.

$86 billion valuation is confirmed. The deadline being extended for employees to opt-in does not mean the company is not valued at that amount today.

https://finance.yahoo.com/news/openai-tender-employee-shares-extended-180824501.html

@TP8ac2 what do you mean? All this says is that they were "in talks" for $86b in October and that an anonymous source is saying they lost some investors then gained at least as much funding since then.

I mean, it's up to the creators (or mods probably) to interpret the seven words of resolution criteria.

@TP8ac2 Yeah this values the company at $86B, seems like that should resolve this yes in my opinion.

It's at 80b resolve the market

https://qz.com/openai-is-set-to-see-its-valuation-at-80-billion-makin-1850950928#:~:text=OpenAI%20is%20set%20to%20see,valuable%20startup%20in%20the%20world

@CryptoCrafter Uh no, the article makes it look hypothetical for now. Do you have a source for its current valuation at 80b?

@NicoDelon oh nevermind then.

@CryptoCrafter Nice try though