Robinhood offering European investors tokenized shares linked to OpenAI grabbed headlines and sparked debate last week — especially after the AI company distanced itself from the project, saying the tokens don’t represent real equity.

But with the tokenization of real-world assets (RWAs) undoubtedly on the rise, Robinhood's efforts to attract customers in Europe with tokens tied to buzzy tech companies like OpenAI and SpaceX provoked plenty of conversation around private investors gaining access to investing in early-stage, private companies through a tokenization mechanism.

One key question to be answered: are there a lot of retail investors interested in purchasing tokenized equity in private companies?

Dinari CEO Gabe Otte is not so sure. "The key factor with any approach to tokenization is scalability … this approach is generalizable to private securities, and in fact one of our early business lines focused on this," Otte told The Block. "The issue we found was more about supply and demand. While this could change, we found a couple of years ago that most pre-IPO companies are hesitant to take the risk of dedicating a chunk of their cap table to buyers of tokenized assets."

Alongside major cryptocurrency exchanges like Coinbase and Kraken, Dinari is aiming to be a chief supplier for investors who want to buy tokenized equity in publicly traded companies, a slice of RWA investing that many believe could be a huge area for growth, maybe even worth more than USD-pegged stablecoins.

Last month, Dinari said it had become the first company to secure U.S. approval to offer clients tokenized equities. So far most companies offering tokenized shares have focused on selling tokens that track the price of popular stocks like Tesla, Apple, and Nvidia to non-U.S. traders.

According to Otte, Dinari operates differently to some platforms offering access to tokenized equities. "We use a tokenization-on-demand model, which means that when one of our partners’ customers wants to purchase shares, we go out to the traditional market, place that buy order, and tokenize the shares that were purchased specifically for that customer."

To be clear, Robinhood's OpenAI tokens are not tied to actual equity in the artificial intelligence firm, but rather they are a derivative that tracks the company's valuation. That means, unlike what Dinari is doing, Robinhood didn't buy shares in OpenAI and then tokenize them (something that wasn't initially clear when the company's CEO Vlad Tenev told European users they'd have a chance to acquire the stock tokens during a live broadcast last week).

Plume Network CEO Chris Yin largely views Robinhood's initiative as net positive regardless of how it pans out. But he is doubtful about actual demand for tokenized private equity.

"If you look at the numbers, you look in the stats, you look what's going on, it's very clear, the demand is not there," Yin told The Block. Plume Network's mainnet launched last month with $150 million in RWAs onchain. The company is tokenizing a diverse portfolio of real-world assets like solar farms, Medicaid claims, mineral rights and consumer credit.

Although brief, Securities and Exchange Commission Chairman Paul Atkins gave a much different assessment last week when asked about the tokenization private equity. "There is a lot of demand on the investor side to be able to invest in private products," he said in a televised interview with CNBC.

While Atkins didn't specifically address Robinhood's initiative, the SEC chairman said he views tokenization as an innovation and he's optimistic about it helping to bring forth more investment products.

If there is a push to tokenize private equity in growing companies coming down the pike, Injective Head of Business Mirza Uddin is also confident in demand prospects.

"By turning equity into digital tokens, it gives everyday investors a chance to participate in markets once limited to venture capital and private equity," Uddin told The Block. "This is not about creating new markets, but about making existing ones more accessible and liquid. That said, tokenized shares often do not carry traditional rights like voting power."

Injective is technology provider in the burgeoning RWA space.

Kevin Rusher, founder of RWA startup RAAC, which is working to provide private investors with the chance to access to a range of tokenized assets including gold and subsidized housing, also sees growth potential. "Tokenization in private markets has surged significantly this year. Private credit is already the largest RWA category on RWA.xyz,” he told The Block.

According to analytics platform RWA.xyz, the real-world asset market is closing in on $25 billion with $14.5 billion of that total coming from private credit.

"We can expect to see a similar trend in private equity... it will continue to grow, but will come with a lot of risk which need to be addressed, and transparency is key," Rusher added.

Whether tokenized private equity plays can attract significant retail interest may come down to brand recognition because very few private companies command the kind of attention OpenAI and SpaceX do, according to Dinari's Otte.

"Unless the company is a major brand name already, we find that demand for these opportunities tends to lean more on broader sector or asset class plays as opposed to buying equity in individual private companies," he said.

Demand or no demand, to Fundrise co-founder and CEO Ben Miller, the tokenizing of private equity seems pointless. "It makes no sense to me honestly," Miller said in an interview with CNBC on Monday. "Because what you're doing is taking something that is inherently a long-term investment and making it something you can trade 24/7.

Launching a $1-billion fund in 2022, Fundrise gives accredited and unaccredited investors access to private companies but their money goes into a venture fund that appears on a startup's cap table like any other VC.