Indications OpenAI is the Largest Ponzi Scheme in History | by Sam Henry Cliff | Jun, 2026 | MediumSitemapOpen in appSign up<br>Sign in

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Indications OpenAI is the Largest Ponzi Scheme in History

Sam Henry Cliff

4 min read·<br>Just now

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Though his name has become the title for a mechanism of fraud, initially Charles Ponzi had a good idea. By using arbitrage available through the International Reply Coupon market, he was a “disruptor” before Silicon Valley adopted the mentality. Basically, Ponzi didn’t start out as a remorseless con-man, he got in over his head and realized riding a wave of greed could, potentially, lead him out of the mess he created unintentionally.

I worked on Wall Street 10 plus years ago, during the 2008 Financial Crisis and ensuing Great Recession, then moved into International Corporate Risk Management (Insurance), both in back-office Sales Support roles. I learned about institutional investors, the laws of large numbers, and “dollar trading” insurance mechanisms. In general, it gave me a strong appreciation for the nature of debt markets — and their power — plus the very real and costly risks associated with Fortune 500 level US corporation operations and the cash-flow needs to run a sustainable enterprise.<br>On the Street I learned about Equities, Bonds, Derivatives, Institutional Asset Management, Arbitrage Rebate, and other esoteric avenues of financial services. That sophistication helped me understand Property, Casualty, Directors & Officers, Reputational Risk, Product Liability, and even Cyber Insurance products were part of the proposals I managed throughout the response lifecycle.

Recently with my SpaceX IPO article, I wondered about the general nature of market appetite versus self-interest among “passive investors” who might awaken from their slumber, so to speak. Since I published that, S&P refused to fast-track SpaceX, Anthropic, or OpenAI and that makes NASDAQ and Russell exposed as potential portfolio risk starting June 29, 2026. S&P did something incredibly smart in the business sense — they have a “value proposition” counter to NASDAQ and represent an option in the “flight to quality” trade this month.<br>As of yesterday, the well-respected, common man’s research firm Morningstar wrote that their valuation of SpaceX stock is half of what Elon Musk has pinned as the opening price. If there’s not already a tantrum on X about it, well, I’m not wading into that cesspool to find out, it’ll naturally get picked up by some other outlet in due course.<br>Press enter or click to view image in full size

Specifically about OpenAI, and potentially also regarding Anthropic, I woke up this morning with a few data points or observations finally tied together with red string like in the movies:<br>In a Ponzi Scheme, the fundamental crux of such a situation is that the “business model” is unable to bridge the gap between revenues and debt obligations. In short, new investors are recruited to pay off the promised returns to old investors. The type of business is, essentially, irrelevant in the big picture.<br>For Ponzi, it was stamps. For Madoff, it was financial products. For OpenAI, it’s an LLM.

In my view, significantly based on interpretations by Patrick Boyle and Ed Zitron, the reason OpenAI is desperately seeking access to the Public Equities Market, in my view as of today, is because they have unsustainable debt conditions their business revenue has no viable path to satisfying.<br>While there are many well-worn tactics to obfuscate this reality — special purpose vehicles, non-GAAP accounting, media narrative manipulation — eventually reality is the bear that awakens and does what a bear does. It is powerful, savage, and horrifying to watch in action.

Enron in the black, which it wasn’t when it collapsed and sent Andy Fastow to prison (since released)As of June 2026, OpenAI and Anthropic have both submitted confidential S-1 documents to the SEC. I find this funny because of course SpaceX runs on rocket fuel and hubris so they did theirs in public. Also, I can’t help but make a joke that the S-1s were filed “confidentially” but not, in my view, “confidently” because there’s a big, big difference for investors usually.<br>All of these companies have deals with Venture Capital firms, Private Credit firms, and Traditional Banks that are significant. No tokenmaxxing by Corporate America is viable to meet the repayment demands. The “try it for free” then slide everyday people (and the neurodivergents who misuse it unfortunately) into expensive per-token pricing clearly didn’t pan out either.<br>I believe the only way OpenAI can survive in the near term is to find a way to get new investors, “bagholders” as the saying goes, to pay off the old investors…otherwise the contagion collapses a stunning network of greed-based bets in a rigged casino.

Time will tell. I’m no financial advisor, nor lawyer, nor activist or martyr. I’m a crippled guy...