The CEO of OpenAI, who is the founder and backer of a nuclear fission startup backed by Sam Altman, will merge the company with a special-purpose acquisition company he has set up. This deal values the business at approximately $850mn.
Oklo where Altman is board chair has reached an agreement with AltC Acquisition Corporation. Altman, along with former Citigroup executive Michael Klein, set up the blank-cheque business.
Altman has a stake in both Oklo and AltC, which makes the transaction unusual. The Spac sponsoring companies have agreed, under the terms of the contract, to performance milestones linked to founder equity as well as lock-in periods ranging from one to three year.
AltC’s spokesperson said that Altman had “recused” himself from the negotiations between the parties and all discussions and decisions made by the Oklo board and AltC board involving this transaction.
If shareholders don’t redeem their shares, the deal will provide $500mn to the California-based company. Oklo intends to use the money for its nuclear power production that is scheduled to be on the market in four years, and to build a fuel recycling plant in the early 2030s.
AltC was founded in July 2021 by Altman and Klein. They are Spac sponsors who have taken companies public, such as Lucid, an electric car maker, and Multiplan, a healthcare provider. The deal with Oklo was announced as the two-year deadline for finding a target company or returning cash to shareholders approached.
Blank-cheque companies or Spacs raise money through the stock exchange and then invest the money in a company to make it public. They grew during the coronavirus outbreak, raising hundreds and billions of dollars in investment. Since then, they have fallen out of favor due to poor performance and misaligned incentive structures that encouraged investors to seek deals at all costs.
Altman has a vast network of start ups. Many of them are in niche fields, but Altman believes that they will eventually enter the mainstream.
OpenAI’s co-founder, and former president of the start-up incubator Y Combinator, also helped set up Worldcoin. This cryptocurrency uses iris scanning technology to create a global secure cryptocurrency. He was named chair of a nuclear-fusion company, Helion in 2015.
Altman has stated repeatedly in interviews that he does not own equity in OpenAI – excluding a tiny stake from when he was the president. This is an unusual arrangement and it would prevent Altman from benefiting directly from the AI company’s dramatic valuation increase.
Altman rose to fame last year when his company launched its ChatGPT bot. He has heavily invested in AI and clean technology, which he believes will transform the world within the next decade.
He has allocated massive resources to OpenAI for the management of “AI systems that are much smarter than we” and has in recent months been making his case to world leaders, including US President Joe Biden (and UK Prime Minister Rishi Sunderak) about how powerful AI tools can safely be developed.
Altman, when asked about the business arrangement during a recent Bloomberg event in San Francisco said that his role with OpenAI gave him other privileges such as “an interesting life, impact and access”.
He said: “I’ve got enough money.” “I’m going make a lot more money from my other investments than I have in the past.”