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SEC Investigates Whether OpenAI Deceived Investors, WSJ Says | ZeroHedge

From: zerohedge

SEC Investigates Whether OpenAI Deceived Investors, WSJ Says | ZeroHedge

The Securities and Exchange Commission sent a subpoena to ChatGPT creator OpenAI in December, requesting internal communications from CEO Sam Altman and current and former officials and directors into whether investors were misled, the  reported, citing people familiar with the investigation.

The subpoena followed the unexpected firing of Altman by the board last fall, which sparked two weeks of chaos for the non-profit AI startup. At the time, the board said the ouster was due to an internal review, which found Altman was “not consistently candid in his communications with the board” and said it no longer had confidence in him. 

Two weeks after the ouster, Altman returned as CEO, and as part of the deal, a new board with former Salesforce co-CEO Bret Taylor serving as chair. 

Sources say some senior OpenAI executives were asked by SEC officials in New York to preserve internal documents as the investigation continues. 

Another source said the SEC’s investigation is a “predictable response” following the board’s claim in its November statement. Another source pointed out that SEC investigators have yet to single out any specific statement or communication by Altman and/or others considered deceptive. 

In December, the Federal Trade Commission investigated Microsoft’s $13 billion investment into the OpenAI. Then, the UK’s Competitions and Markets Authority said it would review the investment. In January, the European Commission also said it was examining the deal, reportedly because of all the turmoil surrounding Altman’s ouster and rehiring. 

The SEC’s investigation might not find any wrongdoing by Altman or the board. OpenAI hired two lawyers from WilmerHale to conduct its investigation into the events last fall.