OpenAI CEO Sam Altman testified before Congress in 2023 about the potential dangers of AI. At that time, he repeatedly stated that he had no equity in OpenAI, claiming he was merely running the company out of passion. However, Altman recently revealed that he did, at one point, hold equity in OpenAI through a Sequoia fund, which he later sold. In a recent interview with Bari Weiss, Altman was questioned about what kind of stake he might have if OpenAI transitions into a for-profit entity.
Altman explained, "I have a tiny sliver of equity from an old YC fund — I used to have some via a Sequoia fund, but that turned out to be easier to sell and not keep the position — so I have a very small amount that’s quite insignificant to me." He added, "In terms of what I will or won’t have going forward, I don’t know. There’s no current plan or promise for me to get anything."
While Altman’s investment through Y Combinator was already known, his Sequoia-related investment had not been publicly disclosed. OpenAI has acknowledged Altman’s indirect investment through YC on its website, calling it the CEO’s "only interest" in the company. This investment occurred before Altman began working full-time at OpenAI.
Sequoia first invested in OpenAI in 2021, two years after Altman became the company’s full-time CEO. At that time, OpenAI was valued at approximately $14 billion. Following a significant funding round earlier this year, the company’s valuation skyrocketed to $157 billion, with Sequoia participating in the funding.
Although Sequoia’s stake in OpenAI has increased in value, details regarding Altman’s sale of his investment through the firm remain unclear, as venture firms like Sequoia are not required to disclose their limited partners. An OpenAI spokesperson confirmed Altman’s prior exposure, but did not provide specific details on when or for how much the stake was sold.
“Sam has never had any direct ownership in OpenAI. He held a negligible stake, less than a fraction of a percent, in a general Sequoia fund with a broad portfolio, which he later learned included minimal exposure to OpenAI,” said OpenAI spokesperson Kayla Wood in a statement to TechCrunch. “Sam no longer has any ongoing commitments to the fund.”
Typically, CEOs hold equity in the companies they lead. For public company CEOs, a significant portion of their compensation often comes from equity. However, since OpenAI was founded as a nonprofit, Altman has consistently said he did not own any equity. This month, during an appearance at The New York Times’ DealBook Summit, Altman reiterated that he had no equity in OpenAI.
In a May interview with the All In podcast, Altman explained that he chose not to take equity due to OpenAI’s unique corporate structure. The nonprofit board at OpenAI requires a majority of independent directors, who are not allowed to hold equity. This led Altman to forgo any equity to maintain his status as one of these independent directors. However, this decision has sparked questions about his motives, which Altman acknowledged.
Altman’s involvement with OpenAI has become increasingly relevant as the company plans its transition to a for-profit entity, which is currently governed by the nonprofit board. Reports suggest OpenAI may consider granting Altman equity during this transition, but both Altman and the company have denied any such plans.
OpenAI’s for-profit transition is also facing potential delays due to Elon Musk’s lawsuit, which argues that the company is abandoning its original mission to make AI accessible to all. OpenAI, however, has claimed that Musk aimed to convert the company into a for-profit from the start.
During his interview with Weiss, Altman referred to Musk as a "bully" who enjoys conflict. He also criticized Meta for trying to block OpenAI’s for-profit transition, suggesting that the action may have been driven by ulterior motives such as competition with OpenAI.
While OpenAI maintains that Altman’s exposure to Sequoia was minimal, his comments on Weiss’ podcast have created inconsistencies regarding his earlier assertions of having no equity in OpenAI.