OpenAI CEO Sam Altman will sit before Congress in 2023 and testify about the dangers of AI. He told U.S. lawmakers at the time that he had no stake in OpenAI, something he has said several times while insisting he only runs the company because he loves OpenAI.
However, Altman recently revealed that he actually held some stake in OpenAI through his Sequoia fund, which he has since sold. In an interview with Bari Weiss published Thursday, Altman was asked what stake he would own in OpenAI if it successfully transitions to a for-profit company.
OpenAI CEO said:
“I have very small assets in an old YC fund. I used to hold some assets through the Sequoia fund, but I hold quite a bit of them because I prefer to sell them and it’s easier not to hold positions. It doesn’t matter to me. I don’t know what I will or won’t do in the future. There are no plans or promises to get anything at this time.”
Altman’s investment through Y Combinator was known, but his investment through Sequoia was not known. OpenAI discloses the details of Altman’s indirect investment in his company through YC on its website. The startup says this “small investment” is the CEO’s “sole interest” in the company and was made before he started working at OpenAI full-time.
According to its website, Sequoia first invested in OpenAI in 2021, two years after Altman became OpenAI’s full-time CEO. At the time, OpenAI was valued at around $14 billion, and after the startup’s latest funding round earlier this year, its valuation exploded to $157 billion. This was a round in which Sequoia also participated.
As of 2021, Sequoia’s stake in OpenAI is now worth significantly more, but there are a few unknowns about Altman’s investment through the venture firm. Venture firms like Sequoia are not required to disclose their limited partner investors. It is unclear when and for how much Altman sold his stake.
An OpenAI spokesperson confirmed Altman’s previous exposure in a statement to TechCrunch, but did not provide specifics on this aspect.
“Sam has never had direct ownership of OpenAI. “He had a negligible stake of less than 1% in a general Sequoia fund with a broad portfolio, which we later learned also contained minimal exposure to OpenAI,” OpenAI spokeswoman Kayla Wood said in a statement to TechCrunch. . “Sam no longer has an ongoing commitment to the fund.”
Most CEOs have shares in the companies they run. The largest part of the salary of a CEO running a public company is equity. Of course, startup founders begin their journey owning all the shares in the company until they give shares to their employees and sell a portion to investors. But OpenAI was founded as a non-profit, has an odd structure, and Altman has repeatedly said he owns nothing. This month, Altman told the New York Times’ DealBook Summit that he has no stake in OpenAI.
The OpenAI CEO said in an interview with the All In podcast in May that he originally decided not to take a stake in the company because of its corporate structure. According to OpenAI’s charter, OpenAI’s non-profit board of directors must be filled with a majority of outside directors, meaning that OpenAI cannot own shares in the company. Altman says this led to him not taking any equity to become one of the independent directors. But this has led many to question the CEO’s motivations at the company, which is likely one of the reasons companies are moving away from this structure, Altman said.
Altman’s stake in OpenAI has become increasingly important as the company attempts to transform its for-profit branch, currently controlled by a nonprofit board, into an independent company. OpenAI is also reportedly considering giving its CEO a stake in the transition, although the company and Altman have denied there are any plans to do so.
OpenAI’s for-profit transition is now at risk of being halted by Elon Musk’s lawsuit against the startup. At its core, Musk’s lawsuit alleges that OpenAI is abandoning its original non-profit mission to make the fruits of AI research accessible to everyone. However, OpenAI recently claimed that Musk wanted to turn the startup into a for-profit business from the beginning.
In Altman and Weiss’ interview, the OpenAI CEO called Elon Musk a “thug” who “clearly likes to fight.” At another point, Altman criticized Meta for asking California’s attorney general to block OpenAI’s profit diversion.
“I don’t know why Mehta sent that letter, but I do know that they know that’s not how it works. I know that part of it was malicious,” Altman said. “I can imagine many other reasons why Mehta sent this letter. “You can imagine they wanted to please Elon, and you can imagine they felt it would help them compete with us.”
The company says Altman’s exposure to OpenAI through Sequoia is minimal, but it’s difficult to square Altman’s comments about having no stake in OpenAI with his recent comments on Weiss’ podcast.
