The IPO Just Got...Complicated

I know. Third post today. Bear with me.

Greg Brockman finished his second day on the stand Tuesday. And somewhere in Oakland a Goldman Sachs risk committee is having a very uncomfortable afternoon.

Here's what came out.

In 2017 Brockman personally invested in Cerebras Systems — an AI chip startup. Sam Altman separately invested in Cerebras too. During roughly the same period, OpenAI evaluated Cerebras' technology — emails from 2017 confirming this emerged as trial evidence. Neither disclosed their personal stakes.

Fast forward:

December 2025 — OpenAI signs a $10 billion compute agreement with Cerebras plus a $1 billion loan.

February 2026 — Cerebras valuation triples. From roughly $8 billion to $23 billion. On the strength of OpenAI's commitments.

April 2026 — OpenAI expands the relationship to over $20 billion through 2029.

Cerebras files for IPO at a valuation of up to $26.6 billion.

May 2026 — Brockman testifies under oath that there was "some overlap" between his personal Cerebras investment and OpenAI's discussions about transacting with them.

Q: Was there any written disclosure of your Cerebras stake to Musk or the board?

No written disclosure. In any email, chat, or text. Per his own sworn testimony.

It wasn't just Brockman. Altman personally invested in Cerebras in 2017 — the same year OpenAI first evaluated their technology. The CEO and the president of the nonprofit both held personal stakes in a vendor they then signed a $10 billion deal with. Neither disclosed it.

That's not a grey area.

Self-dealing by a nonprofit officer is chapter one of nonprofit governance law. The rule is simple: if you personally benefit from a transaction involving the organization you serve, you disclose it, recuse yourself, and let the rest of the board decide without your influence.

The CEO and the president both participated in transactions that tripled the value of a company they personally owned. Without disclosing it. The transaction was worth $10 billion to start and $20 billion by the time anyone was counting. Their Cerebras stakes are now worth considerably more than they were in 2017.

And it didn't stop at Cerebras. Brockman also confirmed he holds shares in Helion Energy — the fusion company where Altman has personally invested hundreds of millions. OpenAI has a power purchase agreement with Helion. And in 2017 Altman gifted Brockman a stake in Altman's personal family office valued at $10 million at the time.

The nonprofit CEO and its president. Undisclosed stakes. In vendors doing billion dollar deals with the nonprofit. Confirmed under oath.

The exposure stack is significant.

Nonprofit law. California's Attorney General has been monitoring OpenAI's restructuring since 2024. She now has sworn testimony about undisclosed self-dealing by the nonprofit's president in the federal record. That's not background noise. That's a referral waiting for someone to file it.

IRS exposure. Nonprofits that allow insider self-dealing can lose their tax-exempt status. The IRS calls these "excess benefit transactions." A $10 billion compute deal where the approving officer held undisclosed equity is exactly what that category exists to cover.

Securities law. Cerebras filed for IPO. Brockman holds Cerebras stock. OpenAI's commitments directly caused the valuation to triple. The SEC has opinions about material nonpublic information and the timing of transactions relative to IPO filings.

The SEC doesn't need to go looking for any of this. It's in sworn testimony. In a federal court. In Oakland. On Tuesday afternoon.

Now here's where it gets genuinely uncomfortable for the IPO timeline.

An IPO prospectus requires full disclosure of material legal proceedings. This trial is now a material legal proceeding. With new facts emerging daily. Every day Brockman is on the stand potentially adds another line to the risk factors section of a document that has to disclose all of this to public investors.

The CFO already went to the Journal saying the company isn't ready for public reporting standards. Two sets of revenue numbers for banks versus investors. Active federal litigation. Undisclosed self-dealing allegations now in the sworn record. California and Delaware AGs both monitoring the restructuring.

The lead underwriters — Goldman Sachs, Morgan Stanley and JPMorgan — are reading the trial transcripts. So are the eight banks that distributed SoftBank's $40 billion unsecured bridge loan that has no collateral and matures in March 2027. The main repayment path for that loan is a successful OpenAI IPO. JPMorgan, Goldman, Mizuho, SMBC, MUFG, HSBC, BNP Paribas and Intesa Sanpaolo are all on the hook.

That's not Silicon Valley money. That's European banks. Japanese banks. Global institutions. All holding unsecured exposure to a company whose president just testified about undisclosed self-dealing in a federal courtroom.

Here's the part nobody saw coming.

Musk filed this lawsuit as a bitter founder trying to kneecap a competitor heading toward a massive IPO. His motives are transparently self-interested. His own testimony was a disaster. He didn't read the fine print. He ranked his own company fourth. He declined the equity they offered him. He proposed the for-profit structure himself in 2017 emails.

And then Brockman got on the stand and handed Musk's lawyers the actual receipts.

Not on the founding mythology. Not on the nonprofit mission narrative. On the thing that actually matters legally — fiduciary duty. Self-dealing. Undisclosed conflicts. A $10 billion deal with a company he personally owned without telling the board.

Musk stumbled into being accidentally correct. Which is almost worse for everyone than if he'd simply been wrong.

The lawsuit being right for the wrong reasons is now the most consequential development in a trial full of them.

Zilis testifies Wednesday morning. Nadella confirmed for next Monday. Altman takes the stand the week of May 11.

The CFO went to the Journal. The president testified about undisclosed self-dealing. The IPO banks are reading the transcripts.

TheranasAI is no longer a comparison. It's a developing situation.

Read the terms. They're more honest than the marketing.

The IPO failing or falling significantly short isn't just an OpenAI problem. That's a conversation for tomorrow. (Watch for the link to drop.)

This is part of the Big Tech's War on Users series. Previously: Evil vs Evil — Two Sets of Numbers — Zero Dollars In. Thirty Billion Out.

#altman,