OpenAI Set to Appoint New Board Members Amid Regulatory Scrutiny

OpenAI Board is likely to have a fresh set to members within a month despite the technology giants facing regulatory challenges.

After the company’s governance restructuring in November, the board is working to appoint new board members. Moreover, the Securities and Exchange Commission (SEC) is investigating whether investors in the company were misled, as per the sources close to the situation, reported The Washington Post.

OpenAI Board Stepped Down Following Sam Altman Sacking Episode

OpenAI has been working without a complete board since November after various members of its previous board stepped down during a chaotic leadership turmoil that led to CEO Sam Altman being ousted. The last OpenAI board sacked Altman, citing his failure to maintain consistent transparency in communication with board members. Altman was reinstated as CEO after intense backlash from employees and investors over this decision. Additionally, the company announced a new council to build a new board. However, concerns over the company’s board diversity persist, with the current temporary board comprising three white men. OpenAI has announced its biggest investor, Microsoft, will have a nonvoting observer seat.

In connection with the SEC investigation, some senior employees at OpenAI have been instructed to retain their messages and emails. The specific focus of the SEC’s inquiry remains unclear, and it’s common for the SEC to conduct investigations without immediately launching charges. The Wall Street Journal first disclosed initial reports about the SEC probe. A spokesperson from OpenAI and SEC declined to comment on the matter.

The SEC’s investigation adds to the attention that OpenAI is receiving from regulators worldwide. The European Union is examining whether Microsoft’s significant investment in OpenAI falls under the bloc’s merger regulations. Similarly, the Federal Trade Commission is evaluating the Microsoft and OpenAI partnership and investigating whether OpenAI’s ChatGPT chatbot had leaked users’ data.

OpenAI also faces legal action from authors and news organizations who allege unauthorized use of their content for AI training.

Furthermore, the law firm WilmerHale has been hired to investigate the circumstances surrounding Altman’s dismissal and the leadership turmoil. However, the firm has yet to finalize and release its report.

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