U.S. regulators are reportedly investigating whether artificial intelligence giant OpenAI’s investors were misled.
As part of that investigation, the Securities and Exchange Commission (SEC) is examining internal communications by OpenAI CEO Sam Altman, the Wall Street Journal reported late Wednesday (Feb. 28), citing sources familiar with the matter.
According to the report, the SEC is looking for internal records from current and former officials and directors at OpenAI, and have requested that some senior officials at the company preserve internal documents.
The report said the SEC subpoenaed the company in December. That came after OpenAI’s board fired Altman as CEO, with directors saying the chief executive had not been “consistently candid in his communications.” Altman was restored as head of the company under a new board five days later.
SEC officials based in New York are conducting the investigation and have asked that some senior OpenAI officials preserve internal documents.
The report notes that the SEC forbids companies from misleading investors, no matter if they’re seeking funding in public or private markets, and that the regulator often wraps up investigations without making any official charges.
Some of the WSJ’s sources characterized the investigation as a “predictable response” to the “consistently candid” allegation in November. And one source said the SEC hasn’t singled out any communications from Altman that were misleading.
PYMNTS has contacted OpenAI for comment but has not yet received a reply. An SEC spokesperson told PYMNTS the commission does not comment on the “existence or nonexistence” of investigations.
Assuming the investigation does exist, it marks the latest in a series of legal and regulatory challenges confronting OpenAI, which was recently valued at $80 billion.
For example, the company’s relationship with Microsoft has gotten the attention of regulators in the UK and Europe. The UK’s Competition and Markets Authority (CMA) said in December that it wants to determine if “recent developments” have created a merger situation and if a merger could affect competition in Great Britain.
OpenAI is also locked in a courtroom battle with The New York Times, which sued the company and Microsoft in December for copyright infringement, claiming they used the newspaper’s content without consent to develop their AI products.
Earlier this week, OpenAI claimed in a court filing that the Times used deceptive prompts to cause the company’s technology to reproduce the publisher’s copyrighted material, and thus violated its terms of service.
In an email to PYMNTS, an attorney for the New York Times called the company’s claims “bizarre.”
