OpenAI is reportedly under scrutiny from the U.S. Securities and Exchange Commission (SEC) to determine if the company’s investors were misled.
U.S. SEC officials based in New York subpoenaed the AI startup in December, and have since sought internal communications and records from current and former officials at the company, according to a new report by the Wall Street Journal.
In November, Altman was fired by OpenAI’s board of directors after an internal review cited he was “not consistently candid in his communications” with them. “The board no longer has confidence in his ability to continue leading OpenAI,” the company said in a statement about the leadership shake-up. Of course the changes didn’t last for long: Altman returned as OpenAI CEO five days later, and the company announced it would be installing a new board.
The SEC’s investigation was an expected response to the previous board’s claim Altman was indirect in his communications, sources told the Journal. Meanwhile, the regulator has reportedly been unable to point to a specific statement or communication from Altman that it finds misleading. OpenAI did not immediately respond to a request for comment from Quartz.
In November, regulators and law enforcement including the Manhattan U.S. Attorney’s Office questioned company executives about the board’s accusation against Altman, the Journal previously reported. The investigation is ongoing.
Altman’s firing by the OpenAI board is also being reviewed by law firm WilmerHale, which reportedly expects to finish its investigation over the next few weeks. The firm will release a report on Altman’s alleged conduct and the board’s firing.
Brewing scrutiny at OpenAI
OpenAI is also under separate scrutiny with the European Commission over its multibillion-dollar partnership with Microsoft that struck in January 2023. The EU regulator announced that it’s “checking whether Microsoft’s investment in OpenAI might be reviewable” under mergers and acquisitions regulations in the European Union to ensure competition in the market. The UK’s Competition and Markets Authority is also reviewing the partnership for potential threats to market competition.