OpenAI CEO Sam Altman claims he has no equity in the $80 billion artificial intelligence business he co-founded in 2015.
His ownership of Reddit is another matter.
Following Reddit’s stock market debut on Thursday, Altman’s stake in the social media network increased by $200 million to over $613 million. The 19-year-old company’s shares rose 48% to settle at $50.44 on the New York Stock Exchange.
Altman, 38, is one of Reddit’s largest shareholders, controlling 7.6% of outstanding shares following the deal, according to the company’s prospectus. This ranks below only Condé Nast parent Advance Magazine Publishers and Chinese internet giant Tencent.
Altman, like other insiders, is unable to sell Reddit shares for six months during the so-called lockup period. Altman declined to comment.
Prior to the rise of OpenAI in recent years, owing primarily to the success of its ChatGPT chatbot, Altman was best known as a startup investor and the president of Y Combinator, which he left in 2019. Altman’s investment portfolio includes holdings in Airbnb, Uber, Instacart, Stripe, and Asana.
Reddit was one of his best bets. He was even on the business’s board until about January 2022, when the company said he had recently resigned.
Altman led Reddit’s $50 million Series B fundraising round in 2014, following nine years of utilizing the service on a daily basis, according to his blog. The website has been described as “an example of something that started out looking like a silly toy for wasting time and has become something very interesting.”
Altman spent a total of $60 million in Reddit during two funding rounds in 2021, when the tech sector was flourishing. Those investments have yet to bear fruit, as Reddit’s valuation, despite Thursday’s surge, remains below its private market peak. According to Reddit’s filing, Altman invested $50 million. at $42.47 per share; and $10 million at $61.79 per share.
However, the money he invested a decade ago has grown several times.
That has taken some of the burden off Altman when it comes to earning from OpenAI, where his stay has been controversial for several reasons. The OpenAI board temporarily ousted Altman late last year, citing a lack of confidence in his leadership. He was brought back several days later after intense demand from staff and investors.
Earlier this month, OpenAI announced that Altman would rejoin its board following the end of an internal inquiry by US law firm WilmerHale into the events leading up to his removal.
Altman told US senators at a hearing last May that he is not in his current position for the money. According to the filings, he received around $73,500 in total remuneration in 2022.
“I’m paid enough for health insurance, and I have no equity in OpenAI,” Altman responded when questioned by Sen. John Kennedy, R-La., if he makes a lot of money at work. “I’m doing this because I love it.”
CNBC’s Jonathan Vanian and Jordan Novet contributed to this story.
Sam Altman’s Reddit stake worth over $600 million after first day pop on NYSE
