OpenAI is paying out $51 million to a chip startup that Sam Altman personally invested in, report says
- OpenAI agreed to pay startup company Rain AI $51 million for when its chips are released, per Wired.
- OpenAI chief Sam Altman reportedly invested $1 million of his own money in the company.
OpenAI signed a letter of intent to spend $51 million on chip startup Rain AI, Wired reported.
The ChatGPT-maker agreed in 2019 to pay out $51 million when the chips come out, according to Wired, which has seen a copy of the document detailing the deal.
The magazine also saw disclosures Rain AI made to investors, who were reportedly told by the company that OpenAI CEO Sam Altman invested over $1 million of his own cash in the firm, per Wired.
San Francisco-based Rain makes chips that imitate how brains work and aims to build "cost and energy efficient hardware" for AI companies, its official LinkedIn page says.
Cofounder and former CEO Gordon Wilson said in a LinkedIn post Thursday that he recently stepped down from his role as chief. He added that he would stay on at the company as an executive advisor.
"I will also continue to share my own thoughts on AI and semiconductors, as these industries are central to the greatest transformations we are witnessing (and will continue to witness) across the world in this century," Wilson wrote.
The company's website says it is also backed by Daniel Gross, cofounder of search engine Cue, and startup accelerator Y Combinator, where Altman was president from 2014 to 2019.
Saudi Aramco's investment vehicle Prosperity7 led a funding round last year that saw Rain raise $25 million, Bloomberg recently reported. However, President Joe Biden's administration had it sell its share following scrutiny from the Committee on Foreign Investment in the United States (CFIUS), per the report.
According to Bloomberg, which cited people with knowledge of the matter, the CFIUS told Prosperity7 to pull its support within the last year.
Rain AI didn't immediately respond to a request for comment from Business Insider, made outside of normal working hours.