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OpenAI to unveil new board amidst SEC investigation

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OpenAI to announce new board members amid SEC probe

OpenAI Faces Regulatory Troubles as New Board Members Await Appointment

SAN FRANCISCO — ChatGPT maker OpenAI is planning to appoint several new board members within the next month, as the company’s regulatory troubles mount.

The board is drawing closer to announcing new members following the dramatic November overhaul of the company’s governance, according to a person familiar with the matter, who spoke on the condition of anonymity because the deliberations are private. Meanwhile, the Securities and Exchange Commission is looking into whether investors in the company were misled, according to two people familiar with the situation.

OpenAI has been without a full board since November, after several members of its previous board stepped down amid a chaotic leadership turmoil that started when its CEO, Sam Altman, was fired. OpenAI’s previous board fired Altman saying he had not been “consistently candid in his communications” with board members. After several days of furious backlash from employees and investors, Altman was reinstated as CEO and the company announced a new council meant to set up the new board.

At the time, OpenAI appointed former treasury secretary Larry Summers and former Twitter board chairman Bret Taylor to temporarily oversee the board and select a new, permanent board. One question hanging over the company has been diversity — the current temporary board is made up of three White men. The company has said Microsoft, its biggest investor, will have a nonvoting observer seat.

Whoever is on the new board will have to deal with intense scrutiny from regulators in Europe and the United States.

As part of the SEC probe, some senior OpenAI employees have been told to save their messages and emails, said one of the people. It’s unclear what the SEC is specifically looking into, and the SEC often probes companies without launching charges. The Wall Street Journal first reported news about the SEC probe.

Spokespeople for OpenAI did not return requests for comment. A spokesperson for the SEC declined to comment.

The SEC’s probe adds to the attention OpenAI is receiving from regulators around the world. The European Union is looking into whether Microsoft’s major investment in OpenAI could fall under the bloc’s mergers laws. The Federal Trade Commission is also looking at the Microsoft and OpenAI partnership, as well as scrutinizing whether OpenAI’s ChatGPT chatbot had leaked users’ data.

OpenAI is also being sued by authors and news organizations for using content from their books and news articles to train its AI without payment or permission.

The law firm WilmerHale was also hired to investigate the events surrounding Altman’s firing and the leadership turmoil. That firm has not produced its final report yet.

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