Sam Altman’s Previous Equity Stake in OpenAI through Sequoia: What You Need to Know
OpenAI CEO Sam Altman testified before Congress in 2023, stating that he owns no equity in OpenAI. This assertion has been a consistent part of his narrative, claiming he is dedicated to the company purely out of passion. However, recent revelations indicate that he did, at one point, have a small equity share in OpenAI via a Sequoia fund, although he has sold that stake.
During an interview with Bari Weiss, Altman was asked about his ownership in OpenAI if the company successfully transitioned to a for-profit model. He acknowledged having a "tiny sliver" of equity from an old Y Combinator fund, and mentioned selling his more significant stake from the Sequoia fund. According to him, this equity is now inconsequential to him, and he has no foreseeable interests tied to OpenAI.
While Altman’s investment through Y Combinator was known, the Sequoia connection was not previously disclosed. OpenAI’s website states that his investment through Y Combinator was his only interest in the company and occurred before he took on a full-time role.
Sequoia invested in OpenAI in 2021 when the startup was valued at approximately $14 billion. That valuation has skyrocketed to $157 billion following a funding round earlier this year, which Sequoia also participated in. While the value of Sequoia’s stake has grown, details about when Altman sold his holding and for how much remain unclear, as venture firms are not required to disclose their limited partners.
An OpenAI spokesperson confirmed that while Altman had minimal exposure to the company through the Sequoia fund, he never owned direct equity in OpenAI. The spokesperson emphasized that Altman’s previous investment was negligible and that he has no ongoing commitments linked to the fund.
This discussion of Altman’s past holdings comes at a time when OpenAI is contemplating moving its for-profit branch away from its nonprofit controlling board. As part of this transition, there have been discussions about granting Altman equity, which he and the company have denied.
Elon Musk’s ongoing lawsuit against OpenAI poses additional challenges to this transition, primarily focusing on allegations that the startup is straying from its original nonprofit mission. In recent remarks, Altman described Musk as a "bully" and criticized Meta for its attempts to stifle the company’s evolution.
Altman’s past comments about not holding equity in OpenAI now seem inconsistent with his recent admissions, sparking conversations about transparency and corporate governance in the evolving landscape of AI companies.
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