Attorney General Knudsen asks SEC to strictly scrutinize OpenAI’s filings to protect investors ahead of IPO

HELENA – Montana Attorney General Austin Knudsen led a coalition of 10-state attorneys general in asking the U.S. Securities and Exchange Commission (SEC) to strictly review any filings submitted by OpenAI to protect investors and ensure fair and orderly markets ahead of the company’s impending initial public offering (IPO).

In the letter sent Tuesday to SEC Chairman Paul Atkins, Attorney General Knudsen outlines his concerns with OpenAI’s founder and CEO Sam Altman. Evidence suggests Altman has a history of self-dealing and serious conflicts of interest that have created significant risk for the company. Montana has investment funds directly exposed to public markets and provide retirement benefits for law enforcement officers, first responders, teachers, and other dedicated public servants. OpenAI’s IPO is reportedly expected to be worth over $1.0 trillion and the consequences of any self-dealing and conflicts of interest by Altman could create enormous financial risk and could impact state pensions and individual investors.

“The SEC should review any filings submitted by OpenAl to ensure Montana’s investment funds and public pensions are protected before moving forward with an IPO. I have serious concerns about OpenAI’s leadership and what it could mean for public retirement systems across the nation if the company moves forward with its initial public offering,” Attorney General Knudsen said. “As Attorney General, I have a duty to protect state investments and all Montana consumers.”

In the letter, Attorney General Knudsen points to reports that show significant and undisclosed or inadequately disclosed financial entanglements between Altman’s personal portfolio and companies with which OpenAI has done business. Those reports also state he has leveraged his role to obtain financial support from OpenAI for his other investments.

Additionally, Attorney General Knudsen wants the SEC to ensure that Altman and other key OpenAI personnel are being fully transparent in their filings to the commission as failure to disclose conflicts of interest would constitute an example of conduct demanding scrutiny under the securities laws.

“It is essential that investors receive clear notice of any conflicts of interest on the part of Altman or other senior OpenAI personnel. Only full transparency on these issues will enable investors—including our citizens and our respective States’ investment funds—to make informed decisions whether to invest in OpenAI’s publicly traded stock,” Attorney General Knudsen wrote.

Attorneys general from Alabama, Florida, Idaho, Iowa, Louisiana, Nebraska, Oklahoma, and West Virginina also joined the letter.