The Midas Project, an AI watchdog, has filed a complaint with the IRS against OpenAI, alleging potential tax law violations that could threaten its nonprofit status.
According to the complaint, The Midas Project accuses OpenAI of “abandoned safeguards, rife conflicts of interest, financial upside for the CEO if the organization goes for-profit, and potential misuse of charitable funds.”
The Midas Project was founded in the year 2024 to ensure AI benefits society. The complaint highlights CEO Sam Altman’s dual role as head of OpenAI’s for-profit operations and nonprofit board member, alleging it creates conflicts where he could personally benefit at the nonprofit’s expense.
The Midas Project noted Altman may receive a significant equity stake in a restructured for-profit OpenAI, potentially worth billions given the company’s $300 billion valuation. Additionally, Altman’s investments in firms partnering with OpenAI could yield conflicts worth hundreds of millions.
Other board members face similar accusations. Chairman Bret Taylor co-founded Sierra AI, which resells OpenAI’s models, while Adam D’Angelo’s Quora is an OpenAI customer. Adebayo Ogunlesi’s Global Infrastructure Partners owns data centers that profit from AI demand.
The Midas Project alleges OpenAI’s leaders have conflicts of interest that go against its nonprofit goal of creating AI to help humanity, not to make money for shareholders. These conflicts happen because some board members, including CEO Sam Altman, have financial ties to companies that work with OpenAI, which could prioritize their profits over the public good.
Elon Musk, Sam Altman, and others founded OpenAI in the year 2015 to focus on AI for everyone’s benefit. In November 2023, the firm decided to become a for-profit company. However, in May 2024, the firm decided to stay a nonprofit for now, but no final decision was made about changing their structure. Musk, who initially supported a for-profit shift in 2017, sued OpenAI in 2024, alleging it violated its nonprofit mission. The trial for the lawsuit between Musk and Altman will begin in spring 2026.
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