In 2023, OpenAI CEO Sam Altman testified before Congress about the potential dangers of artificial intelligence. During this testimony, Altman emphasized that he owns no equity in OpenAI, a statement he has reiterated multiple times. He claimed his role at OpenAI is driven purely by passion and not financial incentives.
Revelation of Sequoia Stake
However, in a recent interview with Bari Weiss, Altman disclosed that he once held a small equity stake in OpenAI through a Sequoia fund. Although this stake has since been sold, the revelation sparked curiosity. When asked about the potential for equity if OpenAI transitions fully into a for-profit company, Altman explained:
“I have a tiny sliver of equity from an old YC fund — I used to have some via a Sequoia fund, but that one turned out to be easier to sell and not keep the position in. I have a very small amount that’s quite insignificant to me.”
Details on Previous Investments
While Altman’s indirect investment through Y Combinator (YC) was publicly known, his connection through Sequoia was not. OpenAI’s website acknowledges Altman’s minor investment through YC, clarifying it was made before he joined the company full-time. Sequoia first invested in OpenAI in 2021, two years after Altman became CEO, when OpenAI was valued at $14 billion. The company’s value has since skyrocketed to $157 billion following its latest funding round, in which Sequoia also participated.
Unknowns Surrounding the Sequoia Stake
Several questions remain unanswered regarding Altman’s Sequoia stake, including the timing and amount of its sale. Venture firms like Sequoia are not obligated to disclose the identities of their limited partners, making these details opaque. A statement from OpenAI spokesperson Kayla Wood confirmed Altman’s prior exposure:
“Sam has never had any direct ownership in OpenAI. He held a negligible stake, less than a fraction of a percent, in a general Sequoia fund with a broad portfolio, which he later learned included minimal exposure to OpenAI. Sam no longer has any ongoing commitments to the fund.”
Equity and CEO Compensation
Traditionally, CEOs have significant equity stakes in the companies they lead, especially in startups and public firms where equity constitutes a large portion of their compensation. However, OpenAI’s unique structure—originally founded as a nonprofit—has set it apart. According to its charter, OpenAI’s nonprofit board requires a majority of independent directors without equity. Altman chose not to take equity to qualify as an independent director, a decision that has both shaped his role and raised questions about his motivations.
Transition to a For-Profit Model
OpenAI is currently navigating a transition for its for-profit arm, which is still overseen by its nonprofit board. This shift has sparked speculation about whether Altman might gain equity in the future. Both Altman and the company have denied any immediate plans to grant him ownership.
Legal and Competitive Challenges
OpenAI’s for-profit transition faces challenges, including a lawsuit from Elon Musk, a co-founder of OpenAI. Musk alleges the company is deviating from its original nonprofit mission of democratizing AI research. OpenAI has countered, claiming Musk initially pushed for the for-profit model.
In his interview with Weiss, Altman also addressed recent opposition from Meta, which reportedly urged California’s attorney general to block OpenAI’s structural transition. Altman accused Meta of acting in bad faith, suggesting it may have ulterior motives, such as aligning with Musk or competing with OpenAI.
Public Perception and Transparency
Despite Altman’s insistence that his exposure to OpenAI through Sequoia was negligible, his evolving statements about equity ownership have drawn scrutiny. The discrepancy between his earlier claims of no equity and recent remarks has fueled ongoing discussions in breaking news and technology news today.
As OpenAI continues to expand and redefine its operational model, Altman’s role and any potential financial interests will likely remain under close observation.
