In 2023, OpenAI CEO Sam Altman spoke to Congress about how dangerous AI can be. In that case, he told American politicians that he didn’t own any shares in OpenAI. This is something he has said many times, saying that he only runs the company because he loves it.
At the same time, Altman recently said that he did have a share in OpenAI through a Sequoia fund, which he has since sold. Altman was asked what kind of stake he might have if OpenAI is able to become a for-profit business in an interview with Bari Weiss that came out Thursday.
This is what the CEO of OpenAI said:
That Altman put money into Y Combinator was known, but that he put money into Sequoia was not. On its website, OpenAI says that Altman indirectly invested in his own business through YC. The startup says the CEO has “only interest” in the company because of this “small investment,” which he made before he started working full-time at OpenAI.
Sequoia’s website says that the first time it put money into OpenAI was in 2021, two years after Altman became the company’s full-time CEO. Back then, OpenAI was worth about $14 billion. Since the startup’s most recent funding round earlier this year, which Sequoia also took part in, its value has grown to $157 billion.
Sequoia’s 2021 stake in OpenAI is worth a lot more now, but lots of things are still unknown about Altman’s investment through the venture company. Venture capital firms like Sequoia don’t have to say who their limited partner backers are. It’s not clear when or how much Altman sold the share for.
An OpenAI representative told Parhlo World that Altman had been exposed before, but they didn’t go into details about these things.
“Sam has never owned any part of OpenAI directly.” He had a very small stake—less than a thousandth of a percent—in a general Sequoia fund with a wide range of investments. He later learnt that this fund had very little exposure to OpenAI, according to a statement from OpenAI spokeswoman Kayla Wood to Parhlo World. “Sam is no longer obligated to give money to the fund.”
Most CEOs do own shares in the businesses they run. As a CEO of a public company, equity makes up the largest part of their pay. As you might expect, startup founders start out owning the whole company until they give shares to workers and sell off pieces to investors. But OpenAI was started as a charity, it’s set up in a strange way, and Altman has said many times that he doesn’t own any of it. This month, Altman told The New York Times’ DealBook Summit that he did not own any shares in OpenAI.
In a May interview with the All In podcast, the CEO of OpenAI said that he had originally chosen not to take stock in the company because of how it was set up. The nonprofit OpenAI board must have a majority of independent directors, which means they can’t own stock in the company. This is needed by the organization’s charter. Due to this, Altman says he chose not to take any stock in the company in order to be one of the independent members. But Altman said that this has made a lot of people question the CEO’s intentions at the company. This is probably one reason why the company is moving away from this system.
Altman’s share in OpenAI is also becoming more important as the company tries to turn its for-profit arm, which is currently run by the nonprofit board, into a separate business. Reports say that OpenAI is also thinking about giving the CEO some stock in the company during this shift. However, both the company and Altman have denied that there are any plans to do this.
The switch for OpenAI to making money could be delayed by Elon Musk’s lawsuit against the business. Musk’s lawsuit is based on the idea that OpenAI is giving up on its original nonprofit goal of making the results of its AI research open to everyone. But OpenAI recently said that Musk wanted to turn the company into a business right from the start.
Altman called Elon Musk a “bully” who “clearly likes to get in fights” at one point in his talk with Weiss. At another time, Altman slammed Meta for asking California’s attorney general to stop OpenAI from becoming a business.
That letter was sent by Meta, but I don’t know why. They know that’s not how things work. “I know that part is dishonest,” Altman said. “Meta could have sent this letter for a lot of different reasons.” It’s likely that they wanted to get Elon’s good graces because they thought it would help them compete with us.
Also Read: An Indian News Service is Suing Openai for Copyright Infringement
The company says Altman’s interaction with OpenAI through Sequoia was very limited. However, Altman’s latest claims that he has no ownership stake in OpenAI don’t seem to fit with what he said on Weiss’ podcast.
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