There’s an energy angle to the Sam Altman saga

In the days since former OpenAI CEO Sam Altman was ousted from the company — and in the wake of his sudden return Tuesday night — speculation has been rife about what may have contributed to his unexpected (and ultimately temporary) exit. 

Neither the company nor any board members have publicly shared the reason for Altman’s firing, though many are pointing to rumored tensions between OpenAI’s for-profit subsidiary and its nonprofit board and governing organization over AI safety.

Others are pointing to potential conflicts of interest in the form of Altman’s other founding and investment endeavors. 

While Altman’s investments aren’t likely the cause of the firing, the fiasco has resurfaced potential concerns regarding Altman’s interest in cheap, clean, plentiful electricity to power the future of artificial intelligence. Altman is lead investor and executive chairman at nuclear fusion startup Helion Energy, and in July, startup Oklo announced plans to go public via Altman’s SPAC.

Microsoft, which owns 49% of OpenAI, committed to purchasing electricity from Helion earlier this year. It is considered the first power purchase agreement for nuclear fusion. When Helion’s planned plant comes online in 2028, the deal leaves room for a one-year period before the project is expected to deliver at least 50 megawatts of electricity.

Altman invested $375 million in Helion in 2021, leading the company’s Series E funding round, but had invested in prior rounds as well.

The entrepreneur’s investment in a company poised to supply power for Microsoft’s and OpenAI’s immense energy needs raises a “host of possible issues,” said Bay Area corporate governance attorney Mark Molumphy, a partner at Cotchett, Pitre & McCarthy.

That’s far from an Altman-specific issue, though: “It’s a very big problem in Silicon Valley,” Molumphy said.

“When you have interest in companies with financial relationships with each other, it’s very hard to avoid self dealing transactions,” he said.

“It could potentially expose Microsoft to some questions — they have fiduciary duties as well,” he added. “So I mean, you could write a law school final exam about what’s going on here, all the various duties that are at play.”

Microsoft hadn’t responded to a request for comment at the time of publication.

The investments from Altman and Microsoft are a gamble on unproven fusion technology as the tech industry grapples with the energy intensity of AI computing. In its Accelerating Sustainability with AI playbook released in mid-November, Microsoft pointed to its PPAs for renewables as critical for minimizing the environmental impact of OpenAI’s massive workloads.

By some estimates, nuclear fusion releases four million times more energy than coal, oil, or gas, and four times as much energy as nuclear fission. It has attracted the attention of tech investors, such as Bill Gates, Reid Hoffman, and Dustin Moskovitz – plus the Biden administration.

Helion is betting that its non-ignition fusion system and energy recovery process will bring nuclear fusion energy to commercial reality far ahead of most expert predictions, but the timeline set out in its Microsoft partnership is considered by many to be overly ambitious. Many scientists agree that large-scale nuclear fusion energy generation is several decades off. Furthermore, it’s still unclear whether Helion’s tech produces more energy than its process consumes.

Helion declined to comment for this story.