The SEC started an inquiry into OpenAI following the unexpected removal of Sam Altman, its CEO, by the board of directors last year. The regulator has sent official requests to OpenAI, seeking information about the situation, but it is unclear what exactly they are investigating – Mr. Altman’s behavior, the board’s decision to remove him, or both.
Despite OpenAI’s efforts to move past Mr. Altman’s dismissal, the controversy persists. The company has hired a law firm to conduct its own investigation into Mr. Altman’s behavior and the board’s decision. The board initially removed Mr. Altman on Nov. 17, citing a lack of confidence in his ability to lead OpenAI, but he was reinstated five days later.
Privately, the board was concerned that Mr. Altman was not disclosing all his plans to raise funds for an A.I. chip project from investors in the Middle East. The SEC, OpenAI, and Mr. Altman’s lawyer declined to comment on the matter. The Wall Street Journal first reported on the SEC’s inquiry.
OpenAI made waves in the A.I. industry with the release of ChatGPT in 2022. The company is a leader in generative A.I., which can create text, sounds, and images from short prompts. A recent funding round valued the start-up at over $80 billion.
Generative A.I. could revolutionize the industry, but it also raises concerns about online disinformation, job displacement, and potential threats to humanity. Mr. Altman was at the forefront of promoting generative A.I. after the release of ChatGPT.
To address the fallout from Mr. Altman’s removal, the board removed two members and added two new ones, including Bret Taylor and Lawrence H. Summers. Mr. Altman and the board agreed to conduct an internal investigation, which is being carried out by the WilmerHale law firm and is expected to conclude soon.
