SEC is investigating OpenAI following the board’s actions
The Securities and Exchange Commission began investigating OpenAI shortly after the company’s board of directors unexpectedly fired Sam Altman, its CEO, late last year, three people familiar with the investigation said.
The regulator has sent official requests to OpenAI, the developer of the online chatbot ChatGPT, seeking information about the situation. It is unclear whether the SEC is investigating Mr. Altman’s conduct, the board’s decision to oust him, or both.
Even as OpenAI has tried to turn the page on Mr. Altman’s firing, which was quickly reinstated, the controversy continues to haunt the company. In addition to the SEC investigation, the San Francisco artificial intelligence company has hired a law firm to conduct its own investigation into Mr. Altman’s conduct and the board’s decision to fire him.
The board fired Mr. Altman on Nov. 17, saying it no longer had confidence in his ability to run OpenAI. It said he had not been “consistently candid in his communications,” although no details were given. It was agreed to reinstate him five days later.
Privately, the board was concerned that Mr. Altman was not sharing all his plans to raise money from investors in the Middle East for an AI chip project, people with knowledge of the situation said.
Spokespeople for the SEC and OpenAI and a lawyer for Mr. Altman all declined to comment.
The SEC’s investigation was previously reported by The Wall Street Journal.
OpenAI sparked an AI industry boom in late 2022 when it released ChatGPT. The company is considered a leader in what’s called generative AI, technologies that can generate text, sounds and images based on short prompts. A recent financing deal values the startup at more than $80 billion.
Many believe that generative AI, which represents a fundamental change in the way computers behave, could reshape the industry as profoundly as the iPhone or the web browser. Others argue that the technology could cause serious damage, contribute to the spread of online disinformation, replace jobs at unusual speed and perhaps even threaten the future of humanity.
After ChatGPT’s release, Mr. Altman became the face of the industry’s push for generative AI, endlessly promoting the technology — while acknowledging its dangers.
In an effort to resolve the turmoil surrounding Mr. Altman’s ouster, he and the board agreed to remove two members and add two others: Bret Taylor, a former executive of Salesforce, and former Treasury Secretary Lawrence H. .Summers.
Mr. Altman and the board also agreed that OpenAI would launch its own investigation into the matter. That investigation, by law firm WilmerHale, is expected to be completed soon.