Feb 15, 2024 - Business
Sam Altman owns OpenAI's venture capital fund
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Rebecca Zisser / Axios
Sam Altman isn't just the CEO of ChatGPT maker OpenAI. He's also the owner of OpenAI Startup Fund, which Altman once called a "corporate venture fund," according to federal securities filings.
Why it matters: OpenAI's structural strangeness permeates all aspects of the business.
Background: OpenAI Startup Fund was launched in late 2021 to invest in other AI startups and projects.
- By last May it reported $175 million in total commitments, and a portfolio that included video editor Descript and legal tool Harvey.
- It always had outside limited partners, including major OpenAI partner Microsoft, which is unusual for corporate VC funds but not unique.
- What set OpenAI Startup Fund apart, however, was that it wasn't (and isn't) owned by OpenAI. Nor even by its affiliated nonprofit foundation. Instead, it's legally owned by Altman.
Behind the scenes: "We wanted to get started quickly and the easiest way to do that due to our structure was to put it in Sam's name," an OpenAI spokesperson tells Axios. "We have always intended for this to be temporary."
- "Temporary" has been well over a year and it's a significant risk. For example, what might have happened had Altman remained fired by OpenAI. Could he have kept the fund? Was there anything contractual to prevent it?
- No answer to that last question, but the company does add: "We now know that we may need to re-examine our governance structure, which should precede any changes to the fund, but our priority is to establish a new board first."
