Reddit mascot Snoo is seen on the floor of the New York Stock Exchange (NYSE) as Reddit begins trading in New York on March 21, 2024.
Timothy A. Clary | AFP | Getty Images
OpenAI CEO Sam Altman says he has no equity in the $80 billion artificial intelligence startup he co-founded in 2015.
His Reddit ownership is another matter altogether.
Following Reddit’s stock market debut on Thursday, Altman’s stake in the social media site ballooned by $200 million to over $613 million. Shares of the 19-year-old company jumped 48% in New York Stock Exchange trading to close at $50.44.
Altman, 38, is among the biggest Reddit shareholders, with control of 7.6% of outstanding shares after the offering, according to the company’s prospectus. That’s behind only Condé Nast parent Advance Magazine Publishers and Chinese internet giant Tencent.
Like other insiders, Altman is restricted from selling Reddit shares for six months during the so-called lock-up period. Altman declined to comment.
Prior to the emergence of OpenAI in recent years, due most notably to the popularity of its ChatGPT chatbot, Altman was best known as a startup investor and as the president of Y Combinator, a poition he exited in 2019. Altman’s investment portfolio includes past or present stakes in Airbnb, Uber, Instacart, Stripe and Asana.
Reddit was one of his top bets. He was even on the company’s board until around January 2022, when the company said he’d recently stepped down.
In 2014, Altman led Reddit’s $50 million Series B funding round, after using the service every day for nine years, he wrote in a blog post. He called the website “an example of something that started out looking like a silly toy for wasting time and has become something very interesting.”
In 2021, as the tech market was booming, Altman invested a combined $60 million in Reddit over two financing rounds. Those investments have yet to bear much fruit as Reddit’s valuation, even after Thursday’s rally, is below its private market peak. Reddit’s filing shows Altman invested $50 million at $42.47 per share and $10 million at $61.79 per share.
However, the money he pumped in a decade ago has multiplied many-fold.
That’s helped take the pressure off Altman when it comes to profiting from OpenAI, where his tenure has been controversial for other reasons. Late last year, Altman was briefly fired by the OpenAI board, which said it had lost confidence in his leadership. He was brought back days later after immense pressure built up from employees and investors.
Earlier this month, OpenAI said Altman will rejoin its board following the conclusion of an internal investigation by U.S. law firm WilmerHale into the events leading up to his ouster.
Altman told senators in a hearing last May that he’s not in his current gig for the money. Filings show he made about $73,500 in total compensation in 2022.
“I’m paid enough for health insurance, I have no equity in OpenAI,” Altman said, when asked by Sen. John Kennedy, R-La., if he makes a lot of money in his job. “I’m doing this because I love it.”
— CNBC’s Jonathan Vanian and Jordan Novet contributed to this report