OpenAI Restructures VC Fund, CEO Altman No Longer In Charge

OpenAI has made important changes to the governance structure of its venture capital fund, the OpenAI Startup Fund, resulting in the removal of CEO Sam Altman's control, according to a recent filing with the US Securities and Exchange Commission (SEC). 

This move follows concerns over the fund's unusual structure, where Altman, the high-profile chief executive, controlled investment decisions despite raising funds from external limited partners.

The alteration in ownership, documented in a filing dated 29 March, shifts control of the fund to Ian Hathaway, a partner at the fund since 2021. Altman will no longer serve as a general partner, marking a departure from his previous decision-making role within the fund. OpenAI clarified that Hathaway, with his experience overseeing the fund's accelerator program and leading investments in various companies, will now be responsible for its operations.

The OpenAI Startup Fund, which has raised USD 175 million from partners including Microsoft, operates independently of OpenAI itself, which is not an investor in the fund. The change in governance structure aims to provide clarity and transparency regarding the fund's management, particularly in light of its unusual setup.

Sam Altman, a former president at startup accelerator Y Combinator, has attracted scrutiny for his extensive investment interests outside of OpenAI, including ventures in the cryptocurrency space and fundraising activities in the Middle East. The restructuring of the venture capital fund is a shift away from Altman's direct involvement in its operations.

Altman's departure from the fund's governance follows his dramatic exit from OpenAI in November of the previous year, which prompted an independent investigation. The investigation concluded that Altman had not engaged in any wrongdoing concerning product safety or OpenAI's finances, further highlighting the recent changes in the fund's governance structure.