Bay Area Sellers Seek Pre-IPO AI Stock for Their Homes

A mansion in Marin, a sprawling estate in Wine Country, and an Edwardian tenancy-in-common on a tree-lined street in San Francisco, each go up for sale, priced in the millions. Each goes viral.

The reason wasn’t the architecture, the views or even the asking price. The sellers wanted pre-IPO shares in OpenAI or Anthropic.

A publicity stunt? That was the gut reaction of several local agents. None of the homes have been sold in AI-stock deals. Storm Duncan, the tech investment banker who sought Anthropic stock in exchange for his $8 million Marin home, took his listing off LinkedIn after the post went viral. Vijay Chattha has yet to find an AI stock buyer for his Wine Country estate in Healdsburg, but the property remains on the market, while Nima Gabbay, owner of the Edwardian in San Francisco’s Duboce Triangle neighborhood sold his property through a traditional transaction.

As Anthropic and OpenAI prepare to take their trillion-dollar valuations to the public market this fall, and with a healthy stream of AI startups behind them, the region is preparing for one of its largest liquid wealth creation events it has ever seen. A new club of current and former employees of these tech companies and VC firms are set to become millionaires and billionaires, and many of them will be looking to buy a home.

Trading tech stock for real estate is not new in the Bay Area, and agents say these deals are happening, though often at the upper reaches of the market and under shrouds of privacy.

“This kind of sale has happened many times before,” said Compass agent Rachel Swann, who listed the Duboce Triangle property.

“Nothing short of chaos”

The point of putting a home on the market is to draw “as many eyes as possible,” Gabbay said, which is why he chose to announce his openness to accepting AI stock in the first line of his listing. It worked, maybe too well.

“It was nothing short of chaos,” Gabbay said. Not only was the open house packed with a hundred people, but Swann, the listing agent, was fielding calls from reporters from across the world. A deal is pending, and although the buyer is not offering AI stock, they did find the property through its marketing strategy.

However, the stock shtick wasn’t purely about attention. Gabbay’s desire for pre-IPO stock in Anthropic or OpenAI is in earnest, he said.

“There is a sense that I’m missing out on this gold rush that everyone is a part of,” Gabbay told The Real Deal.

He almost did.

One prospective buyer was ready to exchange AI stock for the property, and Gabbay had a corporate attorney who had a way of putting the deal together, he said. However, the buyer had priced the value of the stock twice as high as its going rate on the secondary market. Gabbay determined it to be too risky and pulled out.

Another buyer saw the viral listing, visited the home and loved it so much that he offered his pre-IPO OpenAI stock for the property. Then, OpenAI announced its plan to go public and the buyer backed out, saying he wanted to wait to see, according to Gabbay.

“I genuinely thought this was going to happen,” he said.

Yet, in the end, Gabbay may get what he wants. After seeing the listing, an OpenAI employee approached him. The employee wasn’t looking to purchase a home, but said they were open to selling some of their stock. The two are in talks for a deal, Gabbay said.

A tough mechanism

Up in Wine Country, Chattha has struggled to find an AI stock buyer for his property, which is listed at $2.5 million but would accept $2 million in pre-IPO AI stock. His realtor, David Hargreaves, said the deal is doubly tough because trading this type of stock would likely trigger a capital gains tax event.

“The mechanism is tough,” Hargreaves told TRD.

Pre-IPO-rich buyers looking to get into the housing market ahead of Anthropic and OpenAI’s public market debuts might employ some creative levers. Erin Thompson, a luxury agent with Compass in San Francisco, said he hasn’t seen any properties sold in AI stock deals, but expects that people are going to be borrowing against that on-paper wealth.

“I’ve had a lot of conversations about it, but at the end of the day, people just want cold hard cash, not a promise for the future,” Thompson said.

The unpredictable nature of IPOs adds an additional layer of complexity to an already challenging transaction. Andrew Oldham, who runs the the Oldham Group in Los Gatos, told The Real Deal that he has structured deals that were conditioned upon a stock hitting a certain price.

Recently, he worked with an employee at chip manufacturer Nvidia, who was ready to buy a home, but whose wealth was heavily tied to the company’s stock. To compromise, the offer included a clause that said the Nvidia’s stock price had to be at $190 a share at the close of escrow, or else the buyer wouldn’t be required to go through with the purchase.

Gabbay, who buys and flips homes in the Bay Area, said he has a few more properties that will hit the market later this year. He’s not sure yet whether AI stock will be part of the listing. OpenAI and Anthropic might already have gone public by that time, and he doesn’t see any other pre-IPO AI companies with the same gravitational pull. But he hasn’t ruled it out.

“I could see us doing it,” Gabbay said. “That might get us some attention.”