SEC Investigates Whether Sam Altman Misled OpenAI Investors

Published: Feb. 29, 2024 at 4:38 a.m. ET

Securities and Exchange Commission probes into OpenAI’s investor allegations

The Securities and Exchange Commission (SEC) is reportedly conducting an investigation into allegations surrounding Sam Altman, former head of OpenAI, questioning whether he misled OpenAI’s small circle of wealthy investors. Altman, who was initially dismissed but later reinstated, faces scrutiny over his actions concerning the company that is responsible for the creation of ChatGPT. The SEC’s probe has led them to seek internal documents from current and former OpenAI officials and directors.

Misleading allegations continue as criminal investigation into OpenAI persists

Additionally, a separate criminal investigation into OpenAI is currently underway, as reported by this esteemed publication earlier. The probe, which is distinct from the SEC’s ongoing investigation, continues to delve into OpenAI’s operations. Details surrounding the criminal investigation remain veiled for now.

Links to potential conflicts of interest between OpenAI and Microsoft

OpenAI, the company at the center of scrutiny, has a stake held by Microsoft, a renowned company that operates and influences the tech industry. Microsoft’s major investment in OpenAI’s for-profit arm raises concerns and has initiated separate competition probes into the relationship between the two technology-focused entities.

Language models shake the market

The advent of ChatGPT, along with other powerful language models, has significantly impacted the market’s recent performance. Notably, there has been a remarkable 28% rally for the S&P 500 over the past 52 months, largely attributed to the surge in popularity and adoption of these language models like ChatGPT.