Most private companies grant employees either options (ISOs / NSOs) or restricted stock units (RSUs). OpenAI grants neither. It grants Profit Participation Units — a structure designed around the company's unusual hybrid non-profit / capped-profit governance.
The mechanics
A PPU is a contractual right to a share of distributions from OpenAI's for-profit subsidiary. You don't own shares in OpenAI. You don't have voting rights. You have a right to receive money (or shares of something) when the company makes a distribution.
Distributions happen at the company's discretion. In practice, OpenAI has run periodic tender-like events that pay out vested PPUs in cash. Each event has paid at a per-unit price that tracks the most recent primary round.
Why PPUs exist
OpenAI's parent organization is a non-profit. The for-profit subsidiary (OpenAI Global LLC) has a capped-profit structure: investor returns are capped at 100× their investment, after which excess returns flow back to the non-profit.
PPUs let employees participate in upside without violating the capped-profit math. They're a creative legal construct, but the practical experience for an employee is nearly identical to holding RSUs at any other late-stage private company.
Tax: no AMT, but no LTCG either
PPU distributions are taxed as ordinary income at the time of distribution — like an RSU vesting event. There is no spread, no AMT preference item, and (importantly) no path to long-term capital gains treatment, because you never actually held shares.
Bottom line for OpenAI employees: treat your PPUs as RSUs for valuation. Use the calculator with strike = $0 and equity type = PPU. The only real difference from RSUs at, say, Anthropic is that you can't elect to pay tax sooner (no 83(b)) and you can't exercise to start the LTCG clock.