Sam Altman Removed From OpenAI Startup Fund As Backed Auto Company Shuts Down Within 5 Months Of Investment
OpenAI CEO Sam Altman has been removed from the company’s venture capital arm OpenAI Startup Fund.
The move comes as fund-backed startup Ghost Autonomy announced its shutdown five months after receiving a significant investment. This highlights the volatile, yet lucrative, nature of startup investing and venture capital.
Established in 2021, the OpenAI Startup Fund aims to foster innovation in sectors where artificial intelligence (AI) can have a transformative impact, such as healthcare, education and energy. Altman has been at the forefront of the fund since its inception, serving as the owner and controller.
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OpenAI announced via a Securities and Exchange Commission (SEC) filing that Altman was no longer the owner and controller of the fund.
“As previously communicated, the fund’s initial GP [general partner] structure was a temporary arrangement and involved no personal investment or financial interest from Sam. This change provides further clarity," an OpenAI representative told Axios.
Ian Hathaway, who has been a partner in the fund alongside Altman since 2021, will assume the role of manager.
The board had removed Altman from his position as CEO because of a lack of confidence in his leadership abilities. He was reinstated a week later following pushback from OpenAI employees.
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Since 2021, the OpenAI Startup Fund has invested $175 million in 17 companies. Its portfolio includes innovative businesses like Descript, Harvey AI, Mem and Speak.
Ghost Autonomy, which the fund invested in five months ago, announced its shutdown this week through a letter on its website.
The auto company, which raised $5 million from the OpenAI Fund and gained access to OpenAI systems and Azure resources from Microsoft Corp., cited the uncertain path to long-term profitability and the current funding climate as reasons for its closure.
"The path to long-term profitability was uncertain given the current funding climate and the long-term investment required for autonomy development and commercialization. We are exploring potential long-term destinations for our team's innovations," the note stated.
In addition to its investment from the OpenAI Fund, Ghost Autonomy raised a total of $220 million from investors.
Altman’s removal from the fund and the shutdown of Ghost Autonomy highlight the volatile nature of the tech and AI industries.
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