OpenAI CEO Sam Altman sat before Congress in 2023 to testify about the dangers of AI. He then told American lawmakers that he does not own any stake in OpenAIsomething he has said many times, saying he runs the company simply because he loves it.
However, Altman recently said that he at one point owned some stake in OpenAI through a Sequoia fund, a stake that he has since sold. In an interview with Bari Weiss Published Thursday, Altman was asked what kind of stake he might have if OpenAI successfully transformed into a for-profit company.
Here's what the CEO of OpenAI said:
“I have a small slice of equity from an old YC fund – I previously had some through a Sequoia fund, but this one proved easier to sell and not keep the position – I So I have a very small amount which is quite insignificant for me. As for what I will or won't have in the future, I don't know. There are currently no plans or promises for me to get 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 his website. The startup says this “small investment” is the CEO’s “sole interest” in the company and was made before he worked full-time at OpenAI.
Sequoia first invested in OpenAI in 2021, according to his websitetwo years after Altman became full-time CEO of OpenAI. At that time, OpenAI was worth around $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.
Even though Sequoia's stake in OpenAI as of 2021 is now worth significantly more, there are several unknowns about Altman's investment through the venture capital firm. Venture capital firms like Sequoia are not required to disclose their limited partner investors. It is unclear when Altman sold his stake and for what amount.
An OpenAI spokesperson confirmed Altman's prior exposure in a statement to TechCrunch, but did not provide details on these aspects.
“Sam has never directly owned OpenAI. He had a negligible stake, less than a fraction of a percent, in a general Sequoia fund with a broad portfolio, which he later learned included minimal exposure to OpenAI,” the spokeswoman said. of OpenAI, Kayla Wood, in a statement to TechCrunch. “Sam no longer has any ongoing commitments to the fund.”
Most CEOs have equity in the companies they run. The largest percentage of a CEO's salary if he or she runs a public company is stock. And of course, startup founders start their journey by owning all the equity in their company, until they grant stock to employees and sell shares 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 stake in OpenAI for New York Times DealBook Summit.
During an interview in May with the Podcast All inThe OpenAI CEO said he initially decided not to take a stake in the company due to its corporate structure. According to his charterOpenAI's nonprofit board must be made up of a majority of independent directors, meaning they cannot have equity in the company. Altman says this led him to take no ownership stake, in order to be one of those independent directors. However, this has led many people to question the motivations of the company's CEO, Altman said, which is likely one of the reasons the company is moving away from that structure.
Altman's stake in OpenAI has also become increasingly relevant as the company tries to evolve its for-profit branchwhich is currently controlled by the non-profit board of directors, into an independent corporation. OpenAI would also consider granting equity to the CEO in this transition, although the company and Altman have denied any plans to do so.
OpenAI's for-profit transition is currently risks being delayed by Elon Musk's trial against the startup. At its core, 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 business from the start.
At one point in Altman's interview with Weiss, the OpenAI CEO called Elon Musk a “tyrant” who “clearly likes to fight.” At another point, Altman went after 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 know they know that's not how it works. I know this part is in 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 like it would help them compete with us.
Although the company claims that Altman's exposure to OpenAI through Sequoia was negligible, it is difficult to reconcile Altman's comments about lack of ownership in OpenAI with his more recent remarks on Weiss' podcast.
#Sam #Altman #owned #equity #OpenAI #Sequoia