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OpenAI experiences substantial reorganization, Sam Altman loses control over Startup Fund
OpenAI has relieved Sam Altman of his duties at the helm of its venture capital fund. The OpenAI Startup Fund, which has amassed $175 million in investments from partners like Microsoft, funds early-stage AI-centric businesses in diverse fields including healthcare, law, and education.
OpenAI has altered the management framework of its venture capital fund that backs AI-based startups. This change includes stripping its renowned CEO, Sam Altman, of his authority over the fund. This news was revealed in a filing with the US Securities and Exchange Commission (SEC), as per an Axios report.
The OpenAI Startup Fund, founded in 2021, originally had Altman at its helm. Nevertheless, this setup sparked worries, especially following Altman's short-lived removal from the position of CEO at OpenAI in November.
Although Altman was restored to his position, his possession of the fund could have caused problems for the business. Altman didn't have any individual monetary contribution in the fund, and he had no financial stake in it, a representative confirmed, even though he was listed as its chief.
The change, recorded in the March 29 document, discusses the atypical structure of Altman's possession of the fund. Despite being promoted like a corporate investment branch, Altman gathered the funds from outside limited partners and decided on investments by himself. OpenAI explained that Altman, despite owning the fund, does not have any monetary stake in it.
The Startup Fund by OpenAI, having garnered $175 million from collaborators like Microsoft, channels its investments into budding companies that are powered by AI in diverse industries like healthcare, legal, and education.
Last year, the fund experienced a rise in commitments and currently holds a gross net asset value of $325 million as per an SEC filing.
Ian Hathaway, who has been a partner at the fund since 2021, has now taken over the fund's control. Altman has stepped down and is no longer a general partner.
Hathaway, who has managed the fund's accelerator program and directed investments into various businesses such as Harvey, Cursor, and Ambience Healthcare, is now in charge.
Even though Altman has been removed from managing the fund, his previous investments outside of OpenAI, such as in cryptocurrency and fusion technology, have attracted attention.
Nonetheless, a separate inquiry conducted after Altman's temporary dismissal in November found that he was not at fault regarding product safety or OpenAI's financial matters.
(Incorporating information from various sources)
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