In the midst of the second-biggest U.S. Bank failure ever, Sam Altman, a cofounder of ChatGPT creator OpenAI and a new investor in a life-extension company Retro Biosciences, loaned his own money to cash-strapped startups.
Before the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation on Sunday guaranteed the repayment of all deposits in the failed Silicon Valley Bank, startups with money tied up in the bank spent three days seriously concerned 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 tweeted.
Soon, Altman was doing the same, according to a tweet by his brother, Jack Altman, the CEO and cofounder of performance management software company Lattice.
“Sam has been sending stuck startups money today with no docs, just saying, ‘Send me back whatever you can whenever you can.’ What a legend,” Jack Altman tweeted on Saturday.
Altman confirmed to TechCrunch that he was using “a decent amount” of his own money for these loans, although he didn’t specify how much.
The OpenAI founder followed up on Sunday with his reluctant take on the SVB situation, where he claimed that the government had hesitated on what to do about the failing bank because it catered to tech-focused startups and venture capitalists.
Ugh fine here is my SVB thread:
— Sam Altman (@sama) March 12, 2023
TL;DR: at this point, to be certain of avoiding catastrophe, the FDIC needs to temporarily guarantee all deposits. Other solutions might work, but this is the best one.
“Unfortunately, it became somewhat political,” he tweeted.
Altman added that he was surprised to see some politicians saying that payroll isn’t that big of a deal and that companies or individuals should be the ones making sure their bank doesn’t go under.
“The government has a role to protect depositors, and we should all want this certainty,” he added.
Still, Altman made sure to emphasize that the fault for Silicon Valley Bank’s collapse lies with management and that equity holders in SVB should be wiped out. In a later tweet on Sunday, he called for more regulations.
“This was a badly mismanaged bank,” he wrote.
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