Topline
OpenAI CEO Sam Altman has reportedly relinquished control of the company’s Startup Fund, ending an unusual and controversial period where he personally owned and controlled the ChatGPT maker’s venture capital fund that is backed by tech giant Microsoft and invested in a slate of AI-powered startups it hopes will transform the world.
OpenAI CEO Sam Altman has relinquished control over the OpenAI Startup Fund.
Key Facts
The fund was launched in 2021 with a goal of helping “AI companies have a profound, positive impact on the world,” according to its website, particularly early-stage startups in fields like healthcare, science, law, education, and energy with founders from underrepresented groups “especially encouraged to reach out.”
Last year the fund reported $175 million in commitments and it has backed at least 13 companies across 17 deals, according to PitchBook data.
Its stable of investments includes legal tech startup Harvey, which quadrupled in value last year—it was valued at $715 million in December—collaborative audio editing platform Descript, valued at $553 million last year and AI-powered medical scribe Ambience Healthcare, which PitchBook estimated had a value of $300 million as of February.
Other investments include language learning app Speak, teaching aid Class Companion, sales software Unify, robotics firm 1X and a self-driving software venture, Ghost Autonomy.
The fund has also invested in silicon chip manufacturer Atomic Semi, note taking app Mem and a suite of coding tools EdgeDB, Anysphere and qqbot, which is a chatbot built on OpenAI’s ChatGPT.
News Peg
Axios first reported the change in ownership of OpenAI’s Startup Fund on Monday, a significant restructuring for the peculiarly organized investment fund. Its structure meant OpenAI CEO Altman, rather than the company or its affiliates, effectively owned and controlled the company’s venture capital fund. An OpenAI spokesperson told Axios the non-traditional ownership structure was intended as a “temporary” measure to get things started quickly, though the system remained in place for over a year and posed an unknown and potentially significant risk given Altman’s (also temporary) ousting. Ian Hathaway, who has helped manage the fund since its launch, has now taken control of the fund, OpenAI told Axios. “As previously communicated, the fund’s initial… structure was a temporary arrangement, and involved no personal investment or financial interest from Sam” OpenAI said, adding that “this change provides further clarity.” Hathaway reportedly led investments in companies including Harvey, Ambience and Speak.
Big Number
$325 million. That’s the gross asset value the fund reported in an SEC filing in late March. The investors backing the $175 million fund include Microsoft and other unnamed backers, according to its website, including other OpenAI partners. However, OpenAI is not an investor in the startup fund.
