US regulators are investigating whether investors in OpenAI were misled

Internal communications from CEO Sam Altman are reportedly under scrutiny in the SEC inquiry

US regulators are investigating internal communications from OpenAI’s CEO, Sam Altman, as part of an inquiry into potential investor deception, according to reports.

The Securities and Exchange Commission (SEC) is examining emails and internal documents of directors and officials at the company behind ChatGPT, following a subpoena issued in December, as reported by the Wall Street Journal (WSJ).

The investigation follows Altman’s removal as the company’s CEO in November by the board, who accused him of lacking consistency in his communications and expressed a loss of confidence in his leadership abilities.

However, less than a week later, he was reinstated to his position, and a new board was installed, following a threat by the 750-strong workforce at the Microsoft-backed company to resign if he was not reinstated.

People familiar with the SEC inquiry, as reported by the WSJ on Wednesday, indicated that the investigation was a foreseeable outcome following the comments made by the board when Altman was initially dismissed. The report also mentioned that the SEC had not identified any particular statement or communication by Altman that it suspected of being misleading.

The SEC frequently closes investigations without alleging any misconduct.

The news of the SEC investigation coincides with the global success of OpenAI’s ChatGPT product, which was introduced in November 2022 and has recently propelled the company’s valuation to $80 billion (£63 billion).

Nevertheless, the artificial intelligence company is under scrutiny from various regulators and government entities regarding its operations.

In January, the US Federal Trade Commission disclosed that it had initiated an investigation into OpenAI and other technology companies, such as Amazon and Alphabet (Google’s parent company), to examine AI investments and their impact on competition in the industry.

Additionally, the Competition and Markets Authority in the UK announced in December that it would investigate the partnership between OpenAI and Microsoft, the company’s largest investor.