University of Michigan's $20M early OpenAI investment now worth $2B as Musk trial documents reveal endowment bet

"Court documents from the Musk v. Altman trial revealed this week that the stake carries a target redemption value of two billion dollars. A university endowment made a hundred-to-one return on an artificial intelligence company that was, at the time of investment, a nonprofit research laboratory with no commercial product."

"Michigan's investment arrived in one of OpenAI's earliest fundraising rounds, alongside Khosla Ventures at 50 million dollars, Reid Hoffman's Aphorism Foundation at 50 million, a Y Combinator fund at 10 million, and the trust of Google's Paul Buchheit at three million. The round predated Microsoft's initial one billion dollar investment in 2019 and the public release of ChatGPT in November 2022."

"At the time, OpenAI was a nonprofit whose mission was to ensure that artificial general intelligence benefits all of humanity. It had no revenue model, no consumer product, and no path to a public listing."

"The investment appeared in an exhibit filed in the federal trial in Oakland, California, where Elon Musk is suing OpenAI and its leadership for 150 billion dollars, alleging that the company's conversion from nonprofit to for-profit corporation constituted theft from a charity. The document listing early investors was not the focus of the trial."

Court documents from the Musk v. Altman trial show the University of Michigan invested $20 million in OpenAI before ChatGPT was released and before major later investments. The stake has a target redemption value of about $2 billion, representing a roughly hundred-to-one return. The investment occurred in an early fundraising round when OpenAI operated as a nonprofit research laboratory with no commercial product, no revenue model, and no clear path to public listing. The investment appears in an exhibit filed in federal court in Oakland, California, where Elon Musk seeks $150 billion, alleging OpenAI’s shift from nonprofit to for-profit involved theft from a charity. The early investor list was not the trial’s focus, but the Michigan line item became a key revelation.

Read at TNW | Insider