AI gold rush is breaking a taboo: cashing out before IPOs

tender offers for employees, and Databricks has given employees multiple opportunities to sell shares.

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There are still some concerns that employee share sales could sap motivation by removing some of the incentive to hang on until a big sale or initial public offering, said Brian Lee, a partner at law firm Baker Botts.

These days, however, those fears are outweighed by pressure to please employees—and demand from investors eager for exposure to top AI startups. Employee tenders give investors an opportunity to buy shares directly from workers.

The sales typically involve common stock, which carries fewer rights, at preferred-share valuations.