Altman gives up OpenAI fund

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Sam Altman, the CEO of OpenAI, has relinquished control of the OpenAI Startup Fund, transferring formal control to Ian Hathaway. This move resolves the unusual corporate venture structure that had been in place since the fund's inception in 2021. The OpenAI Startup Fund, which was initially set up with Altman as its named controller, could have presented a major issue for the company if Altman had not been reinstated as OpenAI's CEO following his brief ouster in November. The fund's initial General Partner (GP) structure was intended as a temporary arrangement, and Altman made no personal investment nor did he have any financial interest in the fund. Hathaway, who joined OpenAI in 2021, has played a key role in managing the Startup Fund, leading investments in various early-stage AI-driven companies in fields like healthcare, law, and education. The fund has backed at least 16 other startups, including Descript, a collaborative editing platform valued at $553 million last year, and Ghost Autonomy, which develops software for autonomous driving2. The change in governance came after Altman's ownership of the OpenAI Startup Fund raised concerns due to its unique structure. While the fund was marketed akin to a corporate venture arm, it was raised by Altman from outside limited partners, with Altman making investment decisions. OpenAI has stated that although Altman owns the fund, he has no financial interest in it. The fund, which is investing $175 million raised from OpenAI partners like Microsoft, has now transferred control to Ian Hathaway, a fund partner since 20211. This development follows reports that OpenAI and Microsoft were working on a $100 billion data center project involving an AI supercomputer dubbed “Stargate,” scheduled to launch in 2028. Microsoft is expected to finance the effort, which would likely surpass the cost of even the largest data centers. The development of the Stargate supercomputer largely depends on OpenAI’s ability to ready its next major upgrade, due out early next year1. Additionally, another of Altman’s ventures, Worldcoin, a biometrics/crypto firm, has attracted regulatory scrutiny. Portugal's data watchdog ordered the company to halt its data collection efforts due to complaints about the unwarranted collection of data from minors, deficiencies in the information provided to data subjects, and the impossibility of erasing the data or withdrawing consent1.
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