Sam Altman Out as OpenAI Startup Fund Owner – Source: www.databreachtoday.com

Artificial Intelligence & Machine Learning
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Next-Generation Technologies & Secure Development

Altman’s Role as Fund’s Sole Owner Was Meant to Be Temporary, OpenAI Says

Prajeet Nair (@prajeetspeaks) •
April 2, 2024    

OpenAI CEO Sam Altman no longer owns the company’s $325 million venture capital fund launched with backing from Microsoft.

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The ChatGPT maker launched its Startup Fund in May 2021 at Microsoft’s Build conference, where Altman pledged in a pre-recorded video to “make big early bets on a relatively small number of companies” that have “big ideas about how to use AI to transform the world.”

A March 29 regulatory filing first reported by Axios shows that control has shifted from Altman to Ian Hathaway, an OpenAI employee who has helped manage the fund since its inception. The filing shows the fund has a gross value of $325 million.

PitchBook data shows a slew of investments, and Forbes reported that among them are legal tech startup Harvey, valued at $715 million in December – a fourfold increase; “collaborative audio editing platform Descript, valued at $553 million last year”; and “AI-powered medical scribe Ambience Healthcare, which PitchBook estimated had a value of $300 million as of February.”

Altman’s role as the fund’s sole owner raised eyebrows. Axios reported earlier this year that Altman was the legal owner, rather than OpenAI or its affiliated nonprofit foundation. A spokesman told the outlet at the time that the ownership structure was instituted to get the venture fund quickly off the ground and that “we have always intended for this to be temporary.”

What would have happened to the fund had the previous OpenAI board succeeded last November in firing Altman for a period longer than one week is unknown (see: Sam Altman Reinstated to OpenAI Board).

Left-leaning advocacy group Public Citizen in March cited Altman’s control of the venture fund in a letter urging California Attorney General Rob Bonta to investigate its nonprofit status. The venture capital fund is “compelling evidence that the OpenAI network of enterprises is not truly functioning under the control of the nonprofit OpenAI, Inc. and that the CEO of the nonprofit is oriented to the for-profit mission of the for-profit affiliates, not a nonprofit purpose,” the organization said.

A spokesperson for OpenAI was not immediately available to provide additional details. “As previously communicated, the fund’s initial GP structure was a temporary arrangement, and involved no personal investment or financial interest from Sam,” it told Axios.