OpenAI Removes Sam Altman’s Ownership of Its Startup Fund

Reuters

12:41 JST, April 2, 2024

OpenAI has changed the governance structure of its venture capital fund that backs AI startups, so its high profile chief executive Sam Altman no longer owns or controls the fund, according to a filing with the US Securities and Exchange Commission (SEC).

The change, documented in the March 29 filing, came after Altman’s ownership of the OpenAI Startup Fund raised eyebrows for its unusual structure–while being marketed similar to a corporate venture arm, the fund was raised by Altman from outside limited partners and he made investment decisions. OpenAI has said Altman does not have financial interest in the fund despite the ownership.

Axios first reported on the ownership change on Monday. In a statement, a spokesperson for OpenAI said the fund’s initial general partner (GP) structure was a temporary arrangement, and “this change provides further clarity.”

The OpenAI Startup Fund is investing $175 million raised from OpenAI partners such as Microsoft MSFT.O, although OpenAI itself is not an investor.

Control of the fund has been moved over to Ian Hathaway, a partner at the fund since 2021, according to the filing. Altman will no longer be a general partner at the fund.

OpenAI said Hathaway has overseen the fund’s accelerator program and led investments in such companies as Harvey, Cursor and Ambience Healthcare.

Altman, a former president at startup accelerator Y Combinator, has previously drawn scrutiny on his sprawling investment interest outside OpenAI, from crypto startup Worldcoin to fusion company Helion Energy, as well as fundraising activities in the Middle East.

OpenAI said an independent investigation following Altman’s dramatic ouster of the company last November concluded he did no wrongdoing in terms of product safety or OpenAI’s finances.