The news of the University of Michigan Endowment’s early investment into OpenAI has been making the rounds since it was first made public in court documents related to the Elon Musk vs Sam Altman court case earlier this month.
According to OWL research, the first public mention of the investment came from this post on X from Ben Casnocha, co-founder and general partner of Village Global, an early-stage tech investor chaired by Reid Hoffman of LinkedIn and PayPal fame. The news was also quickly picked up by Business Insider, which published an article later that day.
OWL has seen the unredacted source document - the LLC agreement of OpenAI Global updated as of January 23, 2023. According to the document, Michigan’s Endowment committed $20 million to OpenAI as a part of the company’s $133 million round that closed on March 1, 2019.
The round was led by Khosla Ventures’ sixth fund, which committed $50 million, along with a $50 million investment from the Aphorism Foundation, Hoffman’s venture philanthropy fund; $10 million from YC Holdings II, an investment entity affiliated with Y Combinator; and $3 million from Paul Buchheit, the creator of Gmail.
The investors in this round are referred to in the document as “First Close Members” and afforded specific terms. Each member is permitted to target a redemption amount of 100X its initial investment, an effective profit cap for each investor.
The target redemption amount can increase through two levers: 1) it will be increased to reflect the inflation rate for each year following the investment; and 2) the target redemption amount will increase by 20 percent for each fiscal year starting on or after January 1, 2025.
The Michigan Endowment’s investment in OpenAI was not its first encounter with Sam Altman, however.
In 2023, the Endowment committed $75 million as the sole outside investor in Hydrazine IV, the fourth fund from Altman’s personal VC fund set up in 2012 with his brother and Lattice CEO Jack Altman.
“We have a longstanding relationship with Sam and Hydrazine IV,” University of Michigan Endowment senior managing director of investments Dan Feder told Forbes at the time. “Hydrazine IV is a small fund in which the University of Michigan is the only outside investor, and this is an extension of our ongoing investment strategies.”
In Friday’s newsletter, users received a deeper look into other Sam Altman-related funds that the Michigan Endowment has invested in, and the at least 10 Y Combinator funds the institution committed to after Altman’s departure.
Michigan has one of the largest exposures to VC in the E&F community, with 31.7% exposure as of January 31, 2026:
The Endowment’s 2025 annual report notes that its VC portfolio returned 29.6% during the last fiscal year, “driven by significant appreciation in several large holdings.”
Longer-term performance is disclosed on a combined VC/PE basis, with that portfolio reporting 15.1% annualized returns over the past 20 years:
OWL users can easily see who else has backed OpenAI using our new Private Companies search. Clicking on the “Private Companies” tab on the left-hand side will bring up the nearly 300,000 private companies that managers have invested in, ordered by number of investors.
Users can then search by company name, in this case OpenAI, and see the company’s full fundraising history, the date of each round, and which managers invested in each round.
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