Government regulators are investigating whether the on-again, off-again ouster of OpenAI CEO Sam Altman last year misled investors.
The Wall Street Journal reported that the Securities and Exchange Commission, which enforces the laws around investing, is “scrutinizing internal communications” between Altman and other current and former OpenAI officials and directors, and sent a subpoena to the San Francisco-based artificial intelligence company behind ChatGPT in December, citing to people familiar with the matter.
The probe follows a quixotic shakeup at OpenAI that saw Altman fired in mid-November, ostensibly because he was “not consistently candid in his communications with the board,” then rehired four days later, while a new board of directors was put in place.
SEC officials have asked some senior people at OpenAI to preserve documents that may have circulated surrounding one of the oddest series of events the tech industry has seen in years, the Journal reported.
The agency is examining the matter even though OpenAI is not publicly traded on the stock market, because it does raise money from outside investors. The company completed a deal known as a “tender offer” earlier this month that allowed employees to sell stakes in the company, Bloomberg reported. The deal valued OpenAI at $86 billion, making it one of the most valuable startups in the world.
OpenAI’s parent is a nonprofit, but it has a for-profit branch that has taken investment money from venture capitalists and Microsoft, which put $13 billion into the for-profit arm.
The shakeup in November and comments about Altman’s issues with the board also caught the eye of the powerful U.S. Attorney for the Southern District of New York, which plays a key role in enforcing investment laws, the Journal previously reported. The outlet said Thursday that this criminal probe is ongoing, but it could not say what exactly the Justice Department is investigating.
OpenAI also faces a host of other legal issues, including two new lawsuits filed Wednesday by three digital media outlets accusing it of copyright infringement for its use of their work to train its chatbots. The New York Times also accused OpenAI and Microsoft of copyright infringement in a suit filed in December.
Government officials in the U.S. and Europe have also launched investigations into the relationship between the two tech companies, the Journal reported.
There is also an internal probe ongoing at the company over Altman’s short-lived departure.