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SEC investigates whether OpenAI investors were misled
https://www.whatjobs.com/news/usa/us-business-news/sec-investigates-whether-openai-investors-were-misled
By Nithya Bose in Business News, posted February 29, 2024
A US regulator is examining the internal communications of OpenAI CEO Sam Altman to find whether the company misled its investors.
The Securities and Exchange Commission, particularly its New York officials, wants to look at internal documents from current and former OpenAI officials and directors.
Sources said the agency sent a subpoena to the AI startup in December.
The probe was launched after OpenAI's board decided to remove Altman from his CEO position and the board in November.
The board cited inconsistencies in his candidness, though specifics were not provided.
Altman was reinstated less than two weeks later under a new agreement, including a revamped board structure he had not joined.
The focus of the SEC's investigation remains unclear, as no specific communication from Altman was identified as misleading.
However, this move by the SEC aligns with its mandate to protect investors by enforcing regulations against deceptive practices, applicable in both public and private sectors.
The SEC frequently concludes such investigations without formal allegations.
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OpenAI has continued its business endeavors, recently completing a tender offer that values the company at over $80 billion.
OpenAI operates under a unique structure with non-profit governance.
However, its for-profit arm attracts investments from various sources, including a significant partnership with Microsoft.
OpenAI faces global scrutiny over its business operations and the societal impacts of its advancements in AI technology.
OpenAI and its relationship with Microsoft are also under competition inquiries in the US and Europe.
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