The US Securities and Exchange Commission is investigating internal communications documents between OpenAI CEO Sam Altman and the Board, regarding his abrupt firing from the company in November 2023. A subpoena was issued to OpenAI in December 2023, ordering the preservation of internal documents. Sam Altman, in a bid to preserve his job at OpenAI following his reinstatement, agreed to the probe, among other conditions.

Allegations about Altman's pattern of behaviour and the Board's statement that he had not been 'consistently candid in his communications' caused the Board to lose trust in him, prompting this specific chain of events. Certain other matters, such as Altman's fundraising activities in the Middle East for an outside chip venture and his dispute with former Board member Helen Toner, who wrote a paper that was highly critical of the company, exacerbated tensions within OpenAI.

OpenAI has chosen two lawyers from WilmerHale to conduct the investigation. While the review is being undertaken, steps are being considered to strengthen OpenAI's corporate governance and to build a strong and diverse Board for overseeing OpenAI's mission to use AI for the benefit of all humanity.

Why does this matter?

The release of OpenAI's ChatGPT was a pivotal moment in the AI movement, that has prompted a rush among the private and public sectors to adopt AI services and applications. However, there are significant risks involved in using AI, particularly GenAI applications, which need to be appropriately addressed before they are available to the public. The SEC probe underscores the importance placed by US authorities to ensure the same. This is even more important in light of the recent controversy caused by Google's Gemini, a GenAI application that generated racially inaccurate pictures of historical figures, causing Alphabet to lose$90 billion in market value.