ChatGPT: how Altman became a billionaire without OpenAI shares – 03/02/2024 – Tech

Sam Altman has become the face when it comes to artificial intelligence as he is the executive director of OpenAI. But his wealth goes far beyond the startup that created ChatGPT.

The 38-year-old has an estimated fortune of at least $2 billion, according to Bloomberg’s billionaire rankings, which are assessing his wealth for the first time.

And this value does not include any stake in OpenAI, which was recently valued at US$86 billion (R$426.09 billion). Altman has repeatedly stated that he does not own shares in the company.

Much of his trackable wealth is in a network of venture capital funds and startup investments, and is set to grow with the initial public offering of Reddit, in which he is among the largest shareholders. When contacted, Altman refused to comment on his investments.

The CEO of OpenAI has become an AI preacher around the world, using his pulpit to inspire and terrify with his predictions about what the technology holds for elections, art, education, the economy and society. As ChatGPT has heavily fueled a stock market search, its profile has grown — and its recent appearance in the spotlight has included moments of intrigue and controversy.

Elon Musk, co-founder of OpenAI, sued Altman and the startup this Thursday (29) for violating its founding mission by prioritizing profit over humanity.

Late last year, Altman was surprisingly ousted from OpenAI after the board said he had not been “consistently forthright in his communications.” However, he was reinstated days later after employees threatened collective dismissal.

Regulators are now studying its internal messaging as part of an investigation into whether investors were misled, the Wall Street Journal reported on Thursday.

The origins of his wealth are relatively opaque. Altman invests in a number of privately held companies, such as Musk’s Neuralink, which do not disclose their precise holdings and are not included in Bloomberg’s wealth calculation.

The bulk of his traceable wealth comes from $1.2 billion (R$5.94 billion) invested in a collection of venture capital funds with variations of the Hydrazine Capital name, according to regulatory filings and Bloomberg estimates. He has a further US$434 million (R$2.15 billion) in funds at Apollo Projects, which invests in the search for technological solutions, according to his website.

Some of those venture capital funds are among the Altman-linked entities that own 8.7% of Reddit, the popular forum site that filed for an IPO last week. The public offering could value the company at up to $6.5 billion, according to the Wall Street Journal on Friday. That would provide a big profit for the funds, which have a stake more than twice the size of Reddit co-founder Steve Huffman.

Altman also invested money in two lesser-known startups. He led a US$500 million investment round in nuclear fusion company Helion Energy in 2021, and invested US$180 million in Retro Biosciences, which is working to increase the average human life expectancy by 10 years.

“It’s a lot,” Altman told MIT Technology Review last year. “Basically, I took all of my net wealth and put it into these two companies,” he said.

Altman overlapped with Huffman and Reddit co-founder Alexis Ohanian in the company Y Combinator’s (YC) first class in 2005. At the time, he was working at a geolocation company called Loopt, which turned out to be a relative failure as it was acquired for little more than it raised.

This was just the beginning of Altman’s relationship with YC and its affiliated startups. He became president of the incubator in 2014 and has backed some of the best-known companies to come through the YC accelerator, including Instacart.

A 2016 New Yorker profile quoted a YC partner who said Altman “went and did something different than we hadn’t known about for a while” — it was YC Research, which later backed OpenAI.

Altman left YC in 2019 to become executive director of OpenAI, which he co-founded as a nonprofit several years earlier. The company later included a for-profit structure with a limit on financial payments to investors.

In congressional testimony and interviews, Altman has said he does not own shares in the company. While some employees received stock-like compensation that was called profit-sharing units, Altman also does not have such units, according to company spokesman Steve Sharpe in an email response.

Sharpe also said Altman will not receive any financial benefits from the OpenAI Startup Fund, which has raised $175 million to acquire stakes in early-stage AI companies. Although regulatory filings show that Altman owns more than 75% of the fund, he has not invested his own money and will not profit from its gains, according to Sharpe.