OpenAI CEO Sam Altman will appear before Congress in 2023 to testify about the dangers of AI. He told US lawmakers at the time that does not own shares in OpenAIsomething he has said many times, stating that he simply runs the company because he loves it.
However, Altman recently said that he at one point had some equity in OpenAI through a Sequoia fund, a stake he has since sold. In an interview with Bari Weiss Posted Thursday, Altman was asked what kind of involvement he might have if OpenAI successfully becomes a for-profit company.
This is what the CEO of OpenAI said:
I have a small portion of capital from a former YC fund; I used to have some through a Sequoia fund, but it turned out it was easier to sell it and not hold the position, so I have a very small amount that is pretty insignificant. me. In terms of what I will or won’t have in the future, I don’t know. There is no current plan or promise for him to achieve anything.
While Altman’s investment through Y Combinator was known, his investment through Sequoia was not. OpenAI reveals Altman’s indirect investment in his own company through YC on your website. The startup says this “small investment” is the CEO’s “sole interest” in the company and was made before working full-time at OpenAI.
Sequoia first invested in OpenAI in 2021, according to your websitetwo years after Altman became OpenAI’s full-time CEO. At the time, OpenAI was worth about $14 billion, a valuation that skyrocketed to $157 billion after the startup’s latest funding round earlier this year, a round in which Sequoia also participated.
While Sequoia’s stake in OpenAI starting in 2021 is worth much more now, there are several unknowns about Altman’s investment through the venture firm. Venture firms like Sequoia are not required to disclose their limited investment partners. It is unclear when Altman sold the stake and for how much.
An OpenAI spokesperson confirmed Altman’s previous exposure in a statement to britcommerce, but did not offer details on these aspects.
“Sam has never had direct ownership in OpenAI. “It had a negligible stake, less than a fraction of a percent, in a Sequoia general fund with a large portfolio, which it later learned included minimal exposure to OpenAI,” OpenAI spokesperson Kayla Wood said in a statement to britcommerce. “Sam no longer has any current involvement with the fund.”
Most CEOs own shares in the companies they run. The largest percentage of a CEO’s salary if he runs a public company is equity. And of course, startup founders begin their journey by owning all the equity in their companies, until they give shares to employees and sell parts to investors. But OpenAI was founded as a nonprofit, has a strange structure, and Altman has repeatedly said he doesn’t own one. This month, Altman said he had no shares in OpenAI for New York Times DealBook Summit.
During a May interview with Everything in podcastOpenAI’s CEO said he originally decided not to acquire shares in the company due to its corporate structure. According to your letterOpenAI’s nonprofit board must be made up of a majority of independent directors, meaning they cannot own shares in the company. Altman says this led him to not acquire any capital in order to be one of those independent directors. However, this has caused many people to question the motives of the company’s CEO, Altman said, which is likely one reason the company is moving away from this structure.
Altman’s involvement in OpenAI has also become increasingly relevant as the company attempts to transition its for-profit arm, which is currently controlled by the nonprofit board, into an independent company. OpenAI is also reportedly contemplating giving the CEO some equity in this transition, although the company and Altman have denied there are plans to do so.
OpenAI’s for-profit transition is currently at risk of being slowed by Elon Musk’s lawsuit against the startup. In essence, Musk’s lawsuit claims that OpenAI is abandoning its original nonprofit mission of making the fruits of its AI research available to everyone. However, OpenAI recently claimed that Musk wanted to turn the startup into a for-profit company from the beginning.
At one point in Altman’s interview with Weiss, the OpenAI CEO called Elon Musk a “bully” who “clearly likes to get into fights.” Elsewhere, Altman lashed out at Meta for asking California’s attorney general to block OpenAI’s for-profit transition.
“I don’t know why Meta sent that letter, but I do know that they know that’s not how things work. I know that part is bad faith,” Altman said. “You can imagine many other reasons why Meta could have sent this letter. You can imagine they wanted to curry favor with Elon, you can imagine they felt it would help them compete with us.”
While the company says Altman’s exposure to OpenAI through Sequoia was negligible, it’s difficult to square Altman’s comments about having no equity in OpenAI with his more recent comments on Weiss’ podcast.