The Midas Project lodges complaint with IRS over possible OpenAI tax law violations

Today, The Midas Project filed a complaint with the IRS detailing potential violations of tax law at OpenAI that could fundamentally undermine the organization's nonprofit status and charitable mission.

As OpenAI pursues a controversial restructuring that would lift profit caps and transform its corporate governance, our investigation has uncovered apparent conflicts of interest among board members, questionable grant making practices, and signals that the company may abandon critical safeguards that protect the public interest. These findings, some of which were documented in our recent OpenAI Files report, raise serious questions about whether one of the world's most influential AI companies is operating in compliance with federal tax law.

Our complaint details how multiple OpenAI board members appear to maintain substantial financial interests in companies that directly benefit from OpenAI's commercial success—from Board Chair Bret Taylor's $4.5 billion AI startup that seemingly resells OpenAI's models exclusively, to board member Adebayo Ogunlesi's firm that owns companies building and operating data centers while participating in AI infrastructure funds worth tens of billions. Perhaps most concerning is CEO Sam Altman's position overseeing a restructuring that could potentially grant him equity worth over $20 billion, despite his 2023 testimony to Congress claiming he holds no OpenAI equity.

Additionally, our investigation found evidence suggesting OpenAI has distributed grants as "API credits" rather than cash, potentially using tax-exempt resources to subsidize demand for its commercial products and create captive customers.

OpenAI was founded as a nonprofit precisely to ensure that artificial general intelligence development would prioritize humanity's interests over investors' interests. As frontier AI companies race toward increasingly powerful systems, the integrity of OpenAI's governance structure and its commitment to its charitable mission should be something we are all paying close attention to.

We're calling on the IRS to investigate these potential violations thoroughly and ensure that OpenAI remains accountable to its fiduciary duty to humanity, not just its investors. Read more about our complaint here.