Restructuring at OpenAI: CEO Sam Altman Loses Control of the Startup Fund

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OpenAI experiences major organizational changes, Sam Altman relinquishes control of Startup Fund

OpenAI has shifted Sam Altman from his position of authority over its investment capital fund. The OpenAI Startup Fund, having garnered $175 million from collaborators like Microsoft, puts its money into budding companies powered by AI in diverse fields like healthcare, law, and education.

OpenAI has modified the administrative framework of its venture capital fund that backs AI startups, thereby relieving its well-known CEO, Sam Altman, of his fund management responsibilities. This update was disclosed in a document submitted to the US Securities and Exchange Commission (SEC), as covered by Axios.

The OpenAI Startup Fund, which was founded in 2021, originally named Altman as its overseer. Still, this decision became a point of worry, especially following Altman's short-term removal from his position as CEO of OpenAI in November.

Though Altman was given back his position, his ownership of the fund could cause potential problems for the business. Altman didn't have any personal stakes in the fund, nor did he have any financial interest, said a representative, even though he was officially the fund's manager.

The modification, noted in the filing from March 29, clarifies the unconventional setup of Altman’s ownership of the fund. Despite being promoted similarly to a corporate venture branch, Altman accumulated the funds from outside limited partners and personally made investment choices. OpenAI highlighted that Altman lacks a financial stake in the fund despite being the owner.

The Startup Fund of OpenAI, which has accumulated $175 million from partners like Microsoft, allocates investments to AI-based start-ups operating in different industries such as healthcare, law, and education.

According to a filing with the Securities and Exchange Commission, the fund experienced a rise in commitments the previous year and currently holds a gross net asset value of $325 million.

Ian Hathaway, who has been a partner at the fund since 2021, has taken over control of the fund. Altman is no longer in the position of a general partner.

Hathaway, who has managed the fund's accelerator program and spearheaded investments in multiple firms such as Harvey, Cursor, and Ambience Healthcare, is now in the driver's seat.

Even though Altman is no longer part of the fund's management, his previous investments outside of OpenAI, such as those in cryptocurrency and fusion technology, have attracted critical examination.

Nonetheless, a separate probe conducted after Altman's brief dismissal in November established that he was not at fault regarding product safety or OpenAI's financial matters.

(Incorporating information from various sources)

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