How Sam Altman became a billionaire without equity in OpenAI

[emorphy]

Why it matters: OpenAI CEO Sam Altman does not own any equity in the wildly popular company. This could be seen as a serious misstep, considering its valuation at more than $80 billion. However, Altman also happens to have a finely-honed eye for great investments, which is how he reached billionaire status and landed on Forbes' list of the world's richest people.

It was only a matter of time before Sam Altman landed on this year's Forbes list of the world's richest people, after the publication determined that he is a billionaire. In fact, if you were unacquainted with OpenAI's corporate structure, you could be excused for being surprised that it took him this long to reach this exalted status. After all, Altman has become a de facto celebrity amid the explosion of interest surrounding generative AI.

But Altman has repeatedly stated that he holds no equity in OpenAI, which is a pity for him considering it is valued north of $80 billion. As it turns out, besides being one of the driving forces behind the democratization of AI, Altman is also one savvy investor.

Forbes reached this conclusion after sifting through more than a dozen regulatory filings and speaking with over a dozen people familiar with Altman's investments to determine his net worth. As Reid Hoffman, LinkedIn co-founder and former longtime OpenAI board director, told the publication, "Sam is very comfortable taking the big bet."

Forbes found that the bulk of Altman's wealth comes from startup investments, which in his early days included YC companies, Reddit, and Stripe. More recently, those big bets have encompassed nuclear energy company Helion and longevity startup Retro Biosciences.

Forbes estimates that Altman's share of the funds through which he made some of these investments – a group that includes Hydrazine Capital and Apollo Projects – totals about $145 million. He's also invested directly in these companies, accounting for another $555 million, according to Forbes. He additionally owns about $90 million of real estate in California and Hawaii.

Altman declined to speak with Forbes for the article, but he has left signs of his investment abilities here and there online for years.

I just invested in reddit, and am about to do an AMA about it. http://t.co/P2b6R3IjRX

– Sam Altman (@sama) September 30, 2014

For instance, in a blog post dating back to 2014, Altman wrote that he started seed investing in 2010, backing about 40 companies, of which five have a current value of ~100x or more, based on the valuation of the last round or offer.

He then shared his theory on what these particular investments have in common and what sets them apart from others. "The most striking observation is that, in my experience, the 'hot seed rounds' that everyone is fighting to get into are inversely correlated with very successful investments." Meanwhile, the seed investments he's made that were highly contested have underperformed, he said.

"For all of the really good seed investments I've made, other investors I respected thought they were bad ideas."

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How Sam Altman became a billionaire without equity in OpenAI

 

[Dr Roboto]

Let me see if I understand how this works. Step one, be born rich. Step to, use money to get richer. Easy enough. Why did I not think of that. Stupid going to college and working hard all my life

 

[Uncle Al]

Actually, if you play your cards right you don't need to start out rich, it will just take you longer to get rich ..... patience ..... LOL

 

[kiwigraeme]

Actually, if you play your cards right you don't need to start out rich, it will just take you longer to get rich ..... patience ..... LOL

I know, sleep in your car and don't pay high rent costs, no lattes or avocado on toast. You will be rich in no time.

I being sarcastic, you have a point, most people just want to be comfortable, free from money stress and a balanced life. People turn down extra money all the time. Not every Kiwi goes to Aussie for bigger bux , or moves family for that bigger paycheck etc

Also after a point rich is point of view. Always laugh at those well off crying how poor they are

 

[p51d007]

You come into this world with NOTHING, you leave with NOTHING. Can't take it with ya!
Andrew Carnegie was often quoted with saying that you should spend the first third of your live
getting as much education as possible. The second third of your life getting as much wealth as
possible. The last third of your life giving it all away.
Easy to do if you are a billionaire I guess. Plus you can have all sorts of things named after you. <wink>

 

[ScottSoapbox]

You don’t have to be rich to invest *very early* in startups. Most are desperate for cash at that point.

You *do* have to have the patience to wait 10-ish years for any return (including the money you gave them) AND the risk tolerance for that investment to go to absolute zero more often than not.

 

[Gastec]

Let me see if I understand how this works. Step one, be born rich. Step to, use money to get richer. Easy enough. Why did I not think of that. Stupid going to college and working hard all my life

I was thinking that he started with only $100 which he got from his uncle on his 16th birthday and because he was so savvy he turned those $100 into $1,000,000 in less than a year. I mean, isn't that how people become millionaires and billionaires, lords and kings?

 

[Gastec]

You don’t have to be rich to invest *very early* in startups. Most are desperate for cash at that point.

You *do* have to have the patience to wait 10-ish years for any return (including the money you gave them) AND the risk tolerance for that investment to go to absolute zero more often than not.

How much money must I invest and into which startups to become multi-millionaire in 10 years?

 

[anastrophe]

Let me see if I understand how this works. Step one, be born rich. Step to, use money to get richer. Easy enough. Why did I not think of that. Stupid going to college and working hard all my life

What gives you the idea he was born rich? What little info is out there suggests he grew up run-of-the-mill middle class.

 

[kiwigraeme]

You come into this world with NOTHING, you leave with NOTHING. Can't take it with ya!
Andrew Carnegie was often quoted with saying that you should spend the first third of your live
getting as much education as possible. The second third of your life getting as much wealth as
possible. The last third of your life giving it all away.
Easy to do if you are a billionaire I guess. Plus you can have all sorts of things named after you. <wink>

Saw a show way back , something like "How America was Made/Built"
Carnegie and his ilk seemed real nasty in their making of money. No concern who they destroyed, or peoples rights.
Not sure in the later generosity was a religious thing, ego boost, a memorial, but did set a precedent.

Lots of super rich people's generosity now is away to avoid taxes including for inheritance for their kids. Ie the Benevolent charity/trust gets full amount that amazing supplies an also amazing income to the kids , who have full control .

Given that Gates probably does probably genuinely wants to stop malaria

 

[Thanthan]

You don’t have to be rich to invest *very early* in startups. Most are desperate for cash at that point.

You *do* have to have the patience to wait 10-ish years for any return (including the money you gave them) AND the risk tolerance for that investment to go to absolute zero more often than not.

This is patently false. Initial seed capital tends to come from very wealthy places, from single investors who can help a business expand in other ways than capital investment.

You can’t just walk in as a rando and put 100 bucks towards a business you think has a good idea.

 

[Dr Roboto]

What gives you the idea he was born rich? What little info is out there suggests he grew up run-of-the-mill middle class.

Let's be clear, I am not hating on Sam Altman. Sam is both extremely intelligent, a savvy entrepreneur and investor, and is running one the most game-changing companies in recent history. I am knocking the general premise of articles like this that make it sound like he is "rags to riches" when he is not. Sam may not have started life as an Elon, Trump, or Kardashian and pretended to be self built. But, it is not like his family was working to make ends meet. I have not been able to fully substantiate my premise that he started with money, but there are a lot of clues that he was at least upper middle class and had access to money and resources in addition to his talent.

From Wikipedia:
"Altman was born on April 22, 1985, in Chicago, Illinois, into a Jewish family, and grew up in St. Louis, Missouri. His mother is a dermatologist, while his father was a real estate broker. Altman is the eldest of four siblings. At the age of eight, he received his first computer, an Apple Macintosh, and began to learn how to code and take apart computer hardware. He attended John Burroughs School, a private school in Ladue, Missouri. In 2005, after two years at Stanford University studying computer science, he dropped out without earning a bachelor's degree."

Just so you know, John Burroughs School, is a private school that currently has a tuition of over $30,000. I don't know about you, but your family has to be pretty well off to send you to a private school with that kind of price tag. Standford's tuition is currently almost $60,000. He could have been such a child genius that he got a free ride, but I don't know.

Again, he is both talented and very intelligent and I would wager that most of his success is based on his own God given capability. But let's not fool ourselves that he did not have a leg up in life. That is my opinion anyway. Not trying to be a hater, just try to keep the facts straight.

 

[Aranarth]

How to be a millionaire with horses.
Start with a billion dollars!

Jokes a side:

How to be poor - work your *** off to only pay your bills, never educate yourself, blame everyone else for your problems.
How to be middle class: work your *** off to get a better credit score so you can get more debt. (go bankrupt)
How to be rich: work your *** off, have no debt, make your money go out find friends and bring them back to you.

I am currently working on the BRRRR method of wealth generation:

Buy a property, Rehab the property, Rent it out (some else pays the bills), Refinance (get your investment back out), REPEAT.

Give it about 10 years, ding! millionaire!
Give it 20 and retire or don't up to you.

Money is EVERYWHERE. The difference is rich people see deals to be had.
Its kind of like buying a blue car and suddenly you see blue cars everywhere.

 

[poohbear]

I think everyone here could've been rich if you just kept investing monthly or bi-monthly in one company that we all know very well as tech enthusiasts; Nvidia.

It was a $30 stock in 2019. If you kept buying shares every month the past 5 years, you'd be quite wealthy by now.

 

[poohbear]

How to be a millionaire with horses.
Start with a billion dollars!

Jokes a side:

How to be poor - work your *** off to only pay your bills, never educate yourself, blame everyone else for your problems.
How to be middle class: work your *** off to get a better credit score so you can get more debt. (go bankrupt)
How to be rich: work your *** off, have no debt, make your money go out find friends and bring them back to you.

I am currently working on the BRRRR method of wealth generation:

Buy a property, Rehab the property, Rent it out (some else pays the bills), Refinance (get your investment back out), REPEAT.

Give it about 10 years, ding! millionaire!
Give it 20 and retire or don't up to you.

Money is EVERYWHERE. The difference is rich people see deals to be had.
Its kind of like buying a blue car and suddenly you see blue cars everywhere.

There's good debt and bad debt. The wealthy know the difference.

 

[Aranarth]

There's good debt and bad debt. The wealthy know the difference.

EXACTLY!

Alternately: there are ASSETS and there are LIABILITIES.

Assets make you money, liabilities cost you money.

Your home/house is NOT an asset!
A house people rent from you IS an asset.

Knowing the difference is half the battle.

 

[fiveminute]

The Internet has so little information about his father that I believe it was intentionally wiped away. What little I found was that he was the boss of a very wealthy real estate developer family business in St. Louis. He didn’t own it but he was the point man. That almost certainly means Altman had the freedom to try any business in his youth without the fear for his personal finances or career. He also had available good professional connections and personal business coaching. He got dealt great cards in life and he played them well.

 

[anastrophe]

The Internet has so little information about his father that I believe it was intentionally wiped away. What little I found was that he was the boss of a very wealthy real estate developer family business in St. Louis. He didn’t own it but he was the point man. That almost certainly means Altman had the freedom to try any business in his youth without the fear for his personal finances or career. He also had available good professional connections and personal business coaching. He got dealt great cards in life and he played them well.

Seeing as you claim you found information, how about sharing the source of that information? Otherwise, this is just fiction.

 

[fiveminute]

Seeing as you claim you found information, how about sharing the source of that information? Otherwise, this is just fiction.

Sure. It’s not hard to find that his father’s name is Jerry. Searching for Jerry Altman in St Louis produces many obituaries but none state his business. However this newspaper article mentions Jerry Altman who is a chief counsel for the Robers Companies in St. Louis, which deal in real estate:

https://www.riverfronttimes.com/news/the-kings-of-kingshighway-2463273

Now, are there two Jerry Altmans in St. Louis in real estate business who are approximately the same age? Maybe.

Furthermore this political contribution record shows that there is Jerry Altman in St Louis who works at Keystone Property Management:

https://www.campaignmoney.com/political/contributions/jerry-altman.asp?cycle=16

This white pages record mentions Jerry Altman who is a CEO of Keystone Property Management:

https://www.whitepages.com/name/Jerry-Altman

 

[anastrophe]

Sure. It’s not hard to find that his father’s name is Jerry. Searching for Jerry Altman in St Louis produces many obituaries but none state his business. However this newspaper article mentions Jerry Altman who is a chief counsel for the Robers Companies in St. Louis, which deal in real estate:

https://www.riverfronttimes.com/news/the-kings-of-kingshighway-2463273

The Altman last name is very, very common. The article only says "[...]Jerry Altman, chief counsel for the Roberts Companies", and "[...]Jerry Altman, a company vice president". Not too many real estate brokers are also attorneys, and if he were, that would be how he would be described, not simply as a 'real estate broker'. Likely not the same person.

Now, are there two Jerry Altmans in St. Louis in real estate business who are approximately the same age? Maybe.

Furthermore this political contribution record shows that there is Jerry Altman in St Louis who works at Keystone Property Management:

https://www.campaignmoney.com/political/contributions/jerry-altman.asp?cycle=16

The campaign contributions list one of them as an Attorney only. The other one with Keystone isn't Altman's father.

This white pages record mentions Jerry Altman who is a CEO of Keystone Property Management:

https://www.whitepages.com/name/Jerry-Altman

Way too young to be his father:

ESP Gets Rave Reviews for Its Work on Pershing Lofts - News/Blog | Energy Solutions Professionals, LLC

www.energyesp.com

However, the image element is entitled "Jeff Flatham", so who knows.
(Update: that's one of the founders, not Altman)

As well, it's an article from 2017, Sam Altman was reasonably well-known by then; typically when you have a famous child, it tends to get mentioned. His father died in 2018 at the age of 67.

Doesn't add up.

I still don't understand this mentality, however, that wealth is bad. So, poverty is bad, wealth is bad, is anything good?

 

[anastrophe]

From Jerry Altman's estranged daughter, her blog:

Statement by Annie Altman, Sam Altman's Sibling

“How We Do Anything Is How We Do Everything”

www.hackingbutlegal.com

"Dad had a known heart condition, but still had to work full time until his death in 2018. Dad was very involved in affordable housing and reconstruction of historic buildings in St. Louis City. I had asked my sibling for years to give our Dad the financial help to stop working. Dad openly expressed his dream to retire in Costa Rica."

That definitely does not sound like someone particularly wealthy, certainly not a "very wealthy real estate developer family"

 

[Gastec]

I think everyone here could've been rich if you just kept investing monthly or bi-monthly in one company that we all know very well as tech enthusiasts; Nvidia.

It was a $30 stock in 2019. If you kept buying shares every month the past 5 years, you'd be quite wealthy by now.

That simple, eh? Imagine billions of humans becoming rich via that method, rich enough to stop working and live off the fat of the land, until the fat lady sings.

 

[Gastec]

The Altman last name is very, very common. The article only says "[...]Jerry Altman, chief counsel for the Roberts Companies", and "[...]Jerry Altman, a company vice president". Not too many real estate brokers are also attorneys, and if he were, that would be how he would be described, not simply as a 'real estate broker'. Likely not the same person.



The campaign contributions list one of them as an Attorney only. The other one with Keystone isn't Altman's father.


Way too young to be his father:

ESP Gets Rave Reviews for Its Work on Pershing Lofts - News/Blog | Energy Solutions Professionals, LLC

www.energyesp.com

However, the image element is entitled "Jeff Flatham", so who knows.
(Update: that's one of the founders, not Altman)

As well, it's an article from 2017, Sam Altman was reasonably well-known by then; typically when you have a famous child, it tends to get mentioned. His father died in 2018 at the age of 67.

Doesn't add up.

I still don't understand this mentality, however, that wealth is bad. So, poverty is bad, wealth is bad, is anything good?

"So, poverty is bad, wealth is bad, is anything good?"
Consuming is good. Consuming all those products and services that make corporations and their owners very rich.

 

[anastrophe]

"So, poverty is bad, wealth is bad, is anything good?"
Consuming is good. Consuming all those products and services that make corporations and their owners very rich.

By that "logic" then, consuming is bad too.