Sam Altman, the CEO of ChatGPT maker OpenAI, also serves as the owner of OpenAI Startup Fund, which he previously referred to as a “corporate venture fund,” as per federal securities filings.
Why it’s important: OpenAI’s unconventional structure influences every aspect of the business.
Context: The OpenAI Startup Fund was established in late 2021 with the aim of investing in various AI startups and initiatives.
– As of last May, it had gathered $175 million in total commitments and had already invested in companies like Descript, a video editor, and Harvey, a legal tool.
– Unlike typical corporate venture capital funds, OpenAI Startup Fund had external limited partners, including major OpenAI collaborator Microsoft, although this setup is not unprecedented.
– Notably, what distinguished OpenAI Startup Fund was its ownership structure. It was neither owned by OpenAI nor its affiliated nonprofit foundation. Instead, legally, it belonged to Altman himself.
Background: “We aimed for a swift start, and given our organizational setup, the simplest approach was to initiate it under Sam’s name,” explained an OpenAI spokesperson to Axios. “However, it was always our intention for this arrangement to be temporary.”
“Temporary” has extended beyond a year, posing significant risks. For instance, if Altman had remained dismissed by OpenAI, could he have retained ownership of the fund? Were there any contractual safeguards in place? While there’s no response to the latter inquiry, the company does acknowledge the need to reassess its governance structure. This process should precede any alterations to the fund, but the primary focus is on establishing a new board first.
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