American Thinker

by Monty L. Donohew

    On April 27, a jury in Oakland, California will decide whether the entire legal and moral foundation of the artificial-intelligence industry was built on fraud.

That is the uncomfortable truth laid bare in a widely read X post by Ricardo (@Ric_RTP) that has racked up over 21 million views. While the corporate media wants you to see “Elon Musk versus Sam Altman” as nothing more than two oversized egos clashing over a $150 billion damages claim, the real issue is far simpler and far more damning: Can a person solicit billions in donations and talent by promising a nonprofit enterprise “for the benefit of all humanity,” build the most valuable technology in history on that promise, and then flip the company into a for-profit juggernaut worth billions while keeping the donations, the property, and the profits

    OpenAI’s defenders call it corporate “evolution.” The rest of us call it what it looks like: a classic nonprofit bait-and-switch.

    if you aren’t familiar, consider the origin story of OpenAI, launched as a nonprofit with fanfare and moral grandeur in 2015. Elon Musk, Sam Altman, and others pledged to develop artificial intelligence that would be open-source and dedicated to humanity, not to profit. Donors wrote checks. Researchers signed on. Talent flocked to the “mission.” Musk himself contributed tens of millions. The whole pitch was that the venture would be different from the greedy Silicon Valley norm — pure, altruistic, and free from profit-driven corruption.

    Then the pivot happened. First came the “capped profit” workaround in March 2019. In an effort to solicit serious outside capital and offer equity-like incentives to employees and investors, OpenAI announced the creation of OpenAI LP, a new for-profit limited partnership subsidiary fully controlled by the original nonprofit with OpenAI Inc., acting as the general partner. The key feature of the “capped profit” model was that returns were limited to a multiple of the initial investment, with profits exceeding the capped returns returned to the controlling non-profit. For the earliest investors, the return was capped at 100x (a $10 million investment would yield a maximum return of $1 billion). Later investors had lower caps. OpenAI described it as a “hybrid” that balanced commercial reality with its founding ideals. It was explicitly pitched as necessary to attract the resources needed without becoming a conventional, greedy Silicon Valley company:

    Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return. Since our research is free from financial obligations, we can better focus on a positive human impact.

    Next, on December 27, 2024, OpenAI made explicit its intentions to restructure to a “for profit” in an announcement titled “Why OpenAI’s structure must evolve to advance our mission,” citing investor demands for “conventional equity” without the risk of nonprofit override. By October 2025, the restructuring was declared complete after negotiations with Microsoft, regulators, and other stakeholders. The company described it as “simplifying its corporate structure” while “keeping the mission intact.”

    OpenAI is reportedly preparing an IPO at an $852 billion valuation. Microsoft has poured in $13 billion. The original nonprofit charter  Conveniently memory-holed. The “open” part of OpenAI  Long gone. The only thing that remained open after the restructuring was the vault and the pockets of investors and stakeholders.

    Musk’s lawsuit, now headed to trial, alleges exactly what any reasonable person might suspect: This was never an honest “evolution.” It was a plan to use the nonprofit halo to attract capital, talent, and regulatory forbearance that a straight for-profit venture could never have obtained. The latest developments make the case even stronger. Musk recently amended his complaint to demand that Altman and President Greg Brockman be removed and that any damages awarded go straight back to OpenAI’s charitable arm — not one dime into Musk’s pocket. He is on record seeking only to restore the original mission.

    That surgical amendment should have ended the “it’s just Elon’s ego” talking points of some detractors. Instead, OpenAI’s response has been pure panic. The company rushed letters to the California and Delaware attorneys general demanding they investigate Musk for “anti-competitive behavior.” Their strategy chief publicly accused him of coordinating attacks with Mark Zuckerberg. They called the suit “harassment driven by ego and jealousy.” These actions don’t suggest a confident defendant with clean hands, but rather nervous executives who know that the discovery process is about to reveal emails, board minutes, and internal deliberations that might show the conversion was discussed and planned much earlier than currently acknowledged.

    A jury verdict siding even partially with Musk would send shockwaves through every A.I. investor on the planet. Suddenly, the “for humanity” rhetoric that every frontier lab has parroted looks less like noble idealism and more like a fraudulent “bait and switch” fundraising strategy.

    OpenAI is not a unique “evolution.” Anthropic was founded by OpenAI defectors using the same nonprofit-first language. Virtually every major A.I. lab wrapped itself in moral cover to lure talent, capital, and political goodwill. If a jury rules that you cannot take nonprofit donations and tax advantages, and a charitable mission, and use them to create world-changing technology, only to convert the whole operation into a private gold mine, the entire A.I. boom will be impacted, directly or indirectly.

    The case tests whether donor intent and founding charters are binding or optional marketing slogans. It also raises the question of whether Americans will tolerate a new class of tech oligarchs who treat “nonprofit” status like how medieval indulgences were once treated: as a get-out-of-moral-accountability-free card.

    Conservatives have long charged that the left’s favorite institutions, universities, foundations, and NGOs, routinely hijack noble-sounding missions to amass power and wealth while preaching lofty aspirations like social justice and equality. OpenAI’s saga may be the latest and most lucrative version of that racket, dressed up in futuristic jargon. The jury in Oakland has a chance to send a very old-fashioned message: A promise is a promise. You cannot bait the public and donors with “for humanity” and then switch to “for us.”