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In the midst of the second largest bank failure in the US, Sam Altman, a co-founder of ChatGPT creator OpenAI and a new investor in a life extension company Retro Bioscienceslends his own money to cash-strapped startups.
Before the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corp. on Sunday Guaranteed payment of all deposits of the failed Silicon Valley Bankstartups with cash tied up in the bank spent three days seriously worried about paying their bills.
After SVB failed on Friday, putting many startup funds out of reach, Altman called on investors to offer their founders emergency cash for payroll or other uses.
“No docs, no terms, just send money,” he said Tweet.
Soon after, Altman did the same, according to a tweet by his brother, Jack Altman, the CEO and cofounder of performance management software company Lattice.
“Sam is sending money to startups today with no documents, just saying, ‘Let me get back what you can if you can.’ What a story, ” Jack Altman Tweet on Saturday.
Altman TechCrunch confirmed that he used “a decent amount” of his own money for these loans, although he did not say how much.
The OpenAI founder followed up on Sunday his doubts about the SVB situation, where he admitted that the government was hesitant about what to do with the failed bank because it caters to technology-focused startups and venture capitalist.
ugh ok this is my SVB thread:
TL;DR: at this point, to ensure disaster prevention, the FDIC should temporarily guarantee all deposits. Other solutions may work, but this is the best.
— Sam Altman (@sama) March 12, 2023
“Unfortunately, this has gotten a bit political,” he tweeted.
Altman added that he was surprised to see some politicians say the payroll isn’t that big of a deal and that companies or individuals should make sure their bank doesn’t go under.
“The government has a role to play in protecting depositors, and we should all want this assurance,” he added.
However, Altman made sure to emphasize that the fault of Silicon Valley Bank’s collapse lies with management and that SVB’s equity holders should be wiped out. In a then tweet on Sunday, he called for more regulations.
“This is bad bank management,” he wrote.
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