The U.S. Securities and Exchange Commission (SEC) is investigating Sam Altman, the CEO of OpenAI, to determine whether investors were misled by the company. This probe was initiated after internal communications by Altman came under scrutiny.

The SEC has issued a subpoena for records from current and former officials and directors of OpenAI, which is the creator of ChatGPT. The investigation follows the OpenAI board's decision in November to dismiss Altman as CEO and remove him from the board, citing a lack of candor in his communications with the board, which they claimed hindered their ability to fulfill their responsibilities. Despite this, Altman was reinstated as CEO shortly after his dismissal, coinciding with the introduction of a new initial board chaired by former Salesforce co-CEO Bret Taylor.

The SEC's investigation is also looking into the preservation of internal documents by senior OpenAI executives. While no specific comments or communications by Altman have been identified as misleading by the regulator, the probe is seen as a response to the board's allegations. OpenAI has recently been valued at over $80 billion following a deal, and Altman is reportedly seeking to raise funds for a chip venture to enhance AI capabilities.

Microsoft, a major investor in OpenAI's for-profit arm, has committed $13 billion to the company as part of a multi-year agreement, which gives Microsoft a 49% stake in the earnings of OpenAI's for-profit arm. The SEC's investigation comes amidst this backdrop of significant financial activity and strategic changes within OpenAI.

WHAT IS THE SEC INVESTIGATION ABOUT?

The SEC investigation involving Sam Altman, the CEO of OpenAI, is focused on determining whether investors were misled by the company. This probe was initiated following internal communications by Altman that raised concerns. The SEC has issued a subpoena for records from current and former officials and directors of OpenAI, which is known for creating ChatGPT. The investigation was triggered by allegations of a lack of candor in Altman's communications with the board, leading to his temporary dismissal and subsequent reinstatement as CEO. The investigation is also examining the preservation of internal documents by senior OpenAI executives amidst the company's valuation at over $80 billion and Altman's efforts to raise funds for an AI chip venture.

HOW LONG DOES AN SEC INVESTIGATION TYPICALLY LAST

An SEC investigation can vary in duration depending on the complexity of the case. Typically, these investigations can last between two to four years, but some cases may conclude within a few months, while others might extend for several years. Factors influencing the length of an SEC investigation include the nature of the alleged violations, the level of cooperation from the entities and individuals involved, the volume of evidence to review, involvement of international locations and witnesses, and the need for coordination with other regulatory authorities. Staying informed about the SEC's enforcement process and seeking legal counsel promptly if under investigation are crucial steps to navigate this process effectively.