WSJ: SEC investigating if OpenAI misled investors

The Securities and Exchange Commission is scrutinizing internal communications by OpenAI Chief Executive Sam Altman as part of an investigation into whether the company’s investors were misled.

The regulator, whose probe hasn’t previously been reported, has been seeking internal records from current and former OpenAI officials and directors, and sent a subpoena to OpenAI in December, according to people familiar with the matter. That followed the OpenAI board’s decision in November to fire Altman as CEO and oust him from the board. At the time, directors said Altman hadn’t been “consistently candid in his communications,” but didn’t elaborate.

Altman returned as CEO less than two weeks later as part of a deal that also entailed a reconstituted board, which he hasn’t joined.

SEC officials based in New York are conducting the investigation and have asked that some senior OpenAI officials preserve internal documents.

The SEC enforces laws that forbid people from misleading investors, regardless of whether fundraisers seek capital in public or private markets. The SEC often closes investigations without making formal accusations of wrongdoing. . . .

. . . .One of the people said that the SEC hasn’t pointed to any specific statement or communication by Altman that it has deemed misleading.

The SEC’s civil investigation has been percolating in the background as OpenAI officials pitched investors as part of its recently closed tender offer, which valued the AI juggernaut behind viral chatbot ChatGPT at more than $80 billion.

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  • When ChatGPT would write a positive essay bout Joe Biden but not Donald Trump,
    and gave a blatantly false reason why it “couldn’t,” I said that the bigger issue is that ChatGPT is programmed to lie.

  • When Chat GPT would tell a joke at the expense of men, or Christians, but not about women, or Muslims and gave a blatantly false reason why it “couldn’t,” I said that the bigger issue is that ChatGPT is programmed to lie.

  • At that time, others (Elon Musk??) pointed to the fact that ChatGPT technology was built by a so-called non-profit which was obviously just a garden designed to create a for-profit enterprise.

  • It is a safe assumption that when Sam Altman raised money from investors for his for profit enterprise it is a safe assumption he touted it’s profit-making potential. That is of course deceitful because he later revealed his is “not interested in profits,” “wants to break capitalism” etc. etc…

  • And of course, if you charge fees to customers, to provide information, but instead you deceitfully provide false information designed to further your political agenda you have definitely lied and have probably committed a criminal offense.
    (No different than scamming grandmas by providing “driveway sealant” which is nothing more than black paint.)

In that light, I alleged Sam Altman, and perhaps all of OpenAI operate with a culture of dishonesty which is probably criminal in nature.
I was not at all surprised when Sam Altman’s ouster was revealed to have been prompted by “lack of candor.”

I am not at all surprised that the SEC is investigating him.

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Short version is that since the OpenAI board voted t oust Altmann over his “lack of candor,” then the Board, whose job it is to represent the investors, felt duped.

Giving the nature of ChatGPT’s responses to some questions, and given some of Sam Altman’s other public statements, I am not at all surprised by either of these developments.