A San Francisco tech founder offered $400 thousand over the asking price for a house in Noe Valley and still lost it. The seller took a different bid, one paid in pre-IPO stock of OpenAI.
The founder posted a text exchange with his realtor on social media, and it spread quickly. In the messages the realtor tells him the offer was turned down because the other buyer was paying in shares, not cash.
Why sellers say yes
Kevin O’Connor, an associate broker with Sotheby’s, says he sees deals like this more and more around the Bay Area. “I think the motivation is to get the jump on things,” he said. For a seller, taking stock is a way into booming AI companies they expect to keep gaining value.
Ahmed Banafa, a tech expert at San Jose State University, said trust drives it. “They trust that this company is a good company and that this company is a company that can deliver based on everything they’ve heard about it,” he said.
The companies gain as well, Banafa said. “That’s going to increase the value for the companies, because now the shares of the company are used as a currency.”
The risk of a drop
Banafa also warned that the shares could lose value once a company lists on the stock market. Whoever holds them might then face an outsized tax bill. Plenty of sellers go ahead anyway, he said: “a lot of the sellers — they look at it as it’s worth it for them, because they have seen the examples with other companies.”
San Francisco home prices have risen sharply over the past year as AI money keeps arriving in the city, according to ABC7 News.
O’Connor believes the practice will last, at least for now. “It’s good to understand that right now, it is in the infancy stage,” he said. “It’s just beginning.”
Industry experts predict OpenAI could go public as soon as this fall.
