V-ECON Audit: OpenAI

V-ECON Audit — OpenAI

Audit Phase: V-ECON — Economic Footprint in Israel and Occupied Territories Target Company: OpenAI Research Synthesis: Based on Round 1–3 research findings

Supply Chain & Sourcing Relationships

OpenAI is a software and API services company whose supply chain consists of cloud infrastructure, semiconductor suppliers, data center equipment, and talent, not physical goods procurement in the conventional sense. No public evidence identified of OpenAI directly procuring physical goods (agricultural products, manufactured goods, fresh produce) from Israeli suppliers. OpenAI’s indirect nexus to Israeli economic activity operates through the reverse channel: Israeli military and government entities consuming OpenAI’s services via Microsoft’s Azure platform, not supplying inputs to OpenAI ¹²³.

No public evidence identified of OpenAI maintaining a wholly-owned subsidiary, joint venture, or dedicated import entity for goods originating from Israel or occupied territories. OpenAI’s go-to-market for its API services operates through openai.com without a separate import intermediary.

Microsoft Azure launched an Israel cloud region in 2021, providing infrastructure through which OpenAI’s models are delivered to Israeli customers. This is a Microsoft infrastructure investment, not an OpenAI direct investment in Israeli supply chains ¹⁴.

Product Origin, Labeling & Regulatory Compliance

OpenAI does not manufacture, distribute, or label physical consumer products, making settlement-origin product categories and country-of-origin labeling requirements not applicable to its business model.

No public evidence identified of a stated corporate policy on the sourcing or labeling of goods from occupied or contested territories. OpenAI has published usage policies and safety policies but has not issued a public disclosure addressing occupied-territory sourcing for physical goods ⁵.

OpenAI’s stated position is that “OpenAI does not have a partnership with the IDF,” which Business & Human Rights Centre has verified as accurate with respect to a direct contractual relationship ⁶. OpenAI’s models reach IDF units through Microsoft’s Azure platform under Microsoft’s separate $133M IMOD contract ¹².

Investment, Capital & Financial Exposure

Foreign Direct Investment:

No public evidence identified of OpenAI making direct capital investments—acquisitions, data centers, real estate holdings, or logistics hubs—within Israel or occupied territories. OpenAI has no confirmed Israeli-domiciled subsidiary or controlled operating entity. OpenAI has not acquired any Israeli-domiciled operating company; confirmed acquisitions are limited to Global Illumination (U.S., 2023) and Multi (U.S., 2024) ⁷⁸.

OpenAI’s NextGenAI Consortium (announced March 2025, $50M, 15 academic partners) includes Harvard, MIT, Caltech, Oxford, and Sciences Po among others. No Israeli university partner has been confirmed ⁹.

Parent and Beneficial Ownership Flows:

OpenAI completed a restructuring on October 28, 2025, converting to a Public Benefit Corporation (PBC). OpenAI Group PBC ownership is distributed as follows: OpenAI Foundation holds 26%, Microsoft holds 27%, employees and other investors hold 47% ¹⁰.

Microsoft holds approximately 27% of OpenAI post-restructuring on a committed investment of approximately $13B, representing an estimated $135B valuation. This creates an economic interest linking OpenAI’s financial performance to Microsoft’s broader commercial activities, including Microsoft’s Israeli subsidiary operations ¹⁰¹².

OpenAI’s profits flow to its shareholders: Microsoft (27%), OpenAI Foundation (26%), employees and other investors (47%). No portion flows to Israeli-domiciled entities ¹⁰.

Sam Altman Personal Investments — Israeli Exposure:

Sam Altman invested in Apex Security, an Israeli cybersecurity startup, via his personal investment vehicle Alt Capital, participating in a $7M seed round in 2024 ¹¹¹²¹³. Apex Security was co-founded by Tomer Avni (Captain, IDF Unit 8200) and Matan Derman (Lieutenant Colonel and head of cyber division, IDF Unit 8200), both of whom met during their Unit 8200 service ¹¹¹².

Apex Security was acquired by Tenable in May 2025 at a valuation exceeding $105M. Sam Altman’s personal stake was acquired as part of this transaction ¹¹¹³.

Dealroom.co portfolio data indicates Sam Altman holds two Israeli-domiciled investments in his personal portfolio through various investment vehicles. The second investment is not publicly named. Altman departed the OpenAI Startup Fund in April 2024 per SEC disclosures; the fund’s portfolio listing shows no Israeli entity confirmed ⁷⁸.

Sam Altman visited Israel in June 2023, meeting President Isaac Herzog and Prime Minister Benjamin Netanyahu, and stated Israel would have a “huge role” in the AI revolution ¹⁴.

Portfolio and Fund Exposure:

No public evidence identified of OpenAI holding Israeli sovereign bonds, shares in Israeli-domiciled companies, or interests in Israeli-focused investment funds. OpenAI’s disclosed financial holdings are limited to its Microsoft equity stake and operational cash.

Operational Presence & Market Activity

Physical Footprint:

No public evidence identified of OpenAI operating any office, sales operation, support centre, warehouse, or retail location within Israel or occupied territories. OpenAI’s services (ChatGPT, API) are accessible globally including in Israel; this reflects service availability, not a physical operational footprint.

Employment and Tax Contribution:

No public evidence identified of OpenAI maintaining a registered workforce or tax presence within Israeli jurisdiction. OpenAI’s Israel-facing operations appear to be conducted remotely or through contractors.

Market Positioning:

No public evidence identified of OpenAI characterizing the Israeli market specifically in any annual report, investor presentation, or press release. OpenAI is not publicly traded and has not filed a 10-K or 20-F with geographic revenue disclosures as of the research period. Post-PBC conversion (October 2025), mandatory SEC filings may begin in 2026. Analytical reporting indicates OpenAI’s annualized revenue at approximately $20B (2025); no geographic breakdown is disclosed.

Corporate Structure & Foundational Ties

Founding and Incorporation History:

OpenAI was founded in 2015 as a Delaware (U.S.) nonprofit corporation and was not founded or originally incorporated in Israel. OpenAI’s legal domicile is Delaware, United States, with operational headquarters in San Francisco, California. No dual or legacy headquarters in Israel has been identified ¹⁰.

State and Institutional Linkages:

No public evidence identified of Israeli state ownership stakes, government board appointees, government contracts, or designation as critical national infrastructure for OpenAI specifically. OpenAI holds a $200M U.S. Department of Defense contract (June 2025) for AI capabilities in “warfighting and enterprise domains,” and a February 2026 agreement with the Pentagon for classified-environment deployment; these are U.S. government contracts, not Israeli.

OpenAI has not been named in Israeli government tender registries, Innovation Israel / PTE (Preferred Technology Enterprise) designations, BIRD Foundation project lists, OCS (Office of the Chief Scientist) grants, or Israel Innovation Authority incentive databases ¹⁵.

Structural Governance Features:

No public evidence identified of governance mechanisms (golden shares, founder shares, charter restrictions) structurally tying OpenAI’s operations or mission to the Israeli state or its policy objectives. The October 2025 PBC restructuring created the OpenAI Foundation (nonprofit) holding a 26% equity stake in the for-profit PBC; this governance structure creates no identified Israeli state linkage ¹⁰.

Board Composition:

Paul M. Nakasone, retired U.S. Army General and former NSA Director, was appointed to the OpenAI Board of Directors on June 13, 2024, joining the Safety and Security Committee. OpenAI cited cybersecurity expertise as the rationale for the appointment ¹⁶. Edward Snowden, former NSA contractor, characterized the appointment as “a willful, calculated betrayal of the rights of every person on Earth” ¹⁷.

The OpenAI Foundation board (post-restructuring) includes: Bret Taylor (Chair), Adam D’Angelo, Dr. Sue Desmond-Hellmann, Dr. Zico Kolter, Adebayo Ogunlesi, Nicole Seligman, Paul Nakasone, and Sam Altman. No board member beyond Nakasone has identified defense-industry ties, settlement-NGO affiliations, or military-intelligence background in available searches ¹⁰.

Profit Repatriation & Economic Contribution

Revenue Attribution:

No public evidence identified of OpenAI disclosing revenue generated from or attributed to Israel as a market. Post-PBC conversion, OpenAI has not yet filed mandatory SEC disclosures with geographic revenue breakdown.

Economic Ecosystem Role:

OpenAI is not identified as a key employer, sector anchor, or infrastructure provider within the Israeli economy. The economic integration runs in the opposite direction: Israeli entities (military, government, commercial) are consumers of OpenAI’s services through Microsoft’s Azure platform ¹².

Microsoft Israel (a Microsoft subsidiary, not OpenAI) holds the $133M IMOD contract, employs staff in Israel, and files Israeli corporate tax returns. Microsoft Israel’s operations benefit from and contribute to the Israeli economy; OpenAI does not hold a direct Israeli economic footprint ¹⁸¹⁹.

Additional Findings — Microsoft Azure as Structural Channel

OpenAI’s GPT-4 and other models are delivered to Israeli military customers exclusively through Microsoft’s Azure cloud platform ¹²³. Internal Microsoft data reviewed by AP shows the Israeli military’s Azure AI usage increased approximately 200-fold by March 2024 versus the pre-October 7, 2023 baseline ².

Azure AI services consumed by IDF units include GPT-4 translation and transcription, speech-to-text, and automatic document analysis used by Unit 8200 (Intelligence Corps signals intelligence), Unit 81 (Special Operations technology), Ofek Unit (target bank and Air Force systems), Sapir Unit (Intelligence IT Division), Matzpen Unit (operational systems), and the Military Attorney’s Office ¹¹⁸³.

Azure hosted storage of millions of phone calls obtained through Unit 8200 mass surveillance of Gaza and West Bank civilians for at least three years. Microsoft worked with Unit 8200 engineers to design security measures for the segregated Azure area. Data storage doubled to 13.6 petabytes by July 2024 (approximately 350× the Library of Congress). Azure server usage by IDF increased two-thirds in the first two months of the war ²²⁰.

Azure hosted IDF population control systems including “Rolling Stone,” a Palestinian population and movement registry covering West Bank and Gaza, and “al Munaseq,” an application for Palestinian permit regime management ²¹. IDF used Azure to transcribe and translate intercepted communications, cross-referenced with in-house targeting systems ¹².

Microsoft disabled some Unit 8200 services in September 2025 following a Guardian investigation ²⁰. The Microsoft-IMOD contract totals $133M (the largest known agreement per AP reporting). Engineering and consultancy costs are estimated at approximately $10M (October 2023–June 2024). Additional projects under consideration in 2024 totaled $30M. Israel is identified as one of Microsoft’s top 500 global customers, with IMOD serving as the umbrella customer for the military’s Microsoft relationship ²¹⁸¹⁹.

Additional Findings — Influence Operations and Algorithmic Manipulation

STOIC / Zero Zeno Influence Operation:

OpenAI’s own disruption report (May 2024) identified and disrupted an influence operation conducted by STOIC, a Tel Aviv-based political marketing firm. OpenAI terminated accounts associated with this operation, nicknamed “Zero Zeno” ²². STOIC used OpenAI’s models to generate articles and comments posted to Instagram, Facebook, X, and affiliated websites. Content focused on the Gaza conflict, praising Israeli military actions, criticizing UNRWA, and denouncing pro-Palestinian campus protesters ²²²³.

Meta simultaneously removed 510 Facebook accounts and 32 Instagram accounts linked to STOIC, sending a cease and desist letter and banning the company from its platforms ²³. The New York Times reported the operation was commissioned by the Israeli Ministry of Diaspora Affairs with funding of at least $2M ²⁴. OpenAI assessed the operation’s impact as “2” on the Brookings Breakout Scale (activity on multiple platforms, no breakout into authentic communities) ²².

This represents documented use of OpenAI’s models by an Israeli state-affiliated entity to generate influence content—facilitated by OpenAI’s model availability and policy framework, not OpenAI’s direct act ²².

Clock Tower X Contract — GPT Framing:

Israel contracted Clock Tower X LLC (led by Brad Parscale, former Trump campaign manager) for $6M, expanded to $9M per January 2026 FARA filings, for a digital campaign targeting Gen Z audiences ²⁵²⁶²⁷. The contract explicitly includes provisions for “websites and content to deliver GPT framing results on GPT conversations”—creating online content to influence how AI systems including ChatGPT respond to queries about Israel and Palestine ²⁵²⁶. The contract uses the MarketBrew AI SEO platform to optimize content for search engine and AI training data visibility ²⁵.

The contract is funded through Havas Media Network (French/Bolloré Group subsidiary) acting as intermediary for the Israeli government. Eran Shayovich, Chief of Staff at Israel’s Ministry of Foreign Affairs, leads “Project 545” as contract contact ²⁵²⁷. Responsible Statecraft clarifies this is not a direct partnership with OpenAI or ChatGPT ²⁵.

No independent impact assessment exists verifying whether the content-flooding strategy has measurably affected ChatGPT or GPT model responses ²⁶.

Additional Findings — Corporate Policy and Usage Framework

January 2024 Policy Change:

OpenAI revised its Usage Policy in January 2024, removing the explicit prohibition on “military and warfare” uses. The previous policy prohibited “activity that has high risk of physical harm,” with examples including “weapons development” and “military and warfare” ²⁸. The updated policy replaced this with a broad principle: “Don’t use our service to harm yourself or others—for example, don’t use our services to promote suicide or self-harm, develop or use weapons, injure others or destroy property” ⁵. The new policy included the statement: “There are, however, national security use cases that align with our mission” ²⁸.

Sarah Myers West of the AI Now Institute stated: “Given the use of AI systems in the targeting of civilians in Gaza, it’s a notable moment to make the decision to remove the words ‘military and warfare’ from OpenAI’s permissible use policy” ²⁹. TechCrunch characterized the change as “a substantive, consequential change of policy, not a restatement of the same policy.” OpenAI spokesperson Niko Felix initially described the change as streamlining for clarity; the company subsequently admitted harboring a desire to pursue “national security use cases” ²⁸. OpenAI hired Katrina Mulligan (February 2024) as head of national security partnerships; Mulligan previously served in the Biden administration as a staffer for top-level Defense Department officials.

Additional Findings — Civil Society and UN Reporting

UN A/HRC/59/23 (Albanese Report, July 2025):

The Special Rapporteur’s report references Microsoft, Alphabet (Google), and Amazon providing “virtually government-wide access to their cloud and AI technologies” to Israel (§§48–86) ³⁰. The report names Palantir specifically for a strategic partnership with Israel, including a January 2024 Tel Aviv board meeting ³⁰. OpenAI is not specifically named in the report’s §§48–86 or the broader document ³⁰. The report’s scope does not appear to have covered OpenAI’s specific role as a model provider to the Israeli military.

Al-Haq UN Submission (December 2025):

Al-Haq explicitly names OpenAI in a formal submission to UN mechanisms: “cloud providers and AI companies such as Microsoft, Google, Palantir and OpenAI provide the storage and machine-learning capabilities that allow the Israeli military and intelligence services to ingest vast amounts of intercepted communications” ³¹. This represents a civil society organization’s formal legal submission naming OpenAI; it is not a UN body finding but carries evidentiary weight as a human rights organization’s documented position based on available evidence ³¹.

UN OHCHR Settlement Database:

The OHCHR database (updated September 2025, A/HRC/60/19) lists 158 companies with activities in settlement contexts. Microsoft, Amazon, and Google are not listed in available reporting on this database iteration, and OpenAI is not listed ³²³³. The database scope covers settlement construction and maintenance activities; it was not designed to capture genocide-period military AI provisioning, which may explain the absence of technology companies.

DBIO V Report (November 2025):

The report identifies 104 companies assisting in maintenance of the illegal situation (up from 58 in 2024). Microsoft is listed under its prior-year category for cloud/AI services. OpenAI is not separately enumerated in available DBIO V excerpts ³⁴.

Law4Palestine Database:

The database compiling 1,000+ companies named in A/HRC/59/23 specifically names Microsoft (displacement/surveillance), Palantir (technology/AI), Alphabet (surveillance), Amazon (displacement/AI), IBM (technology), and Intel (displacement). OpenAI is not separately listed in the technology/AI category beyond the Microsoft partnership context ³⁵.

PAX Report (June 2024):

The report names Microsoft, Amazon, Google, and Palantir for AI/cloud services enabling Israeli military operations. OpenAI is not specifically named in available excerpts ³⁶.

Who Profits:

Who Profits’ database entry for Axel Springer lists “Microsoft, OpenAI, Amazon” as partners on the company profile ³⁷. Who Profits documents the “Rolling Stone” system, attributing it to Microsoft Azure hosting; OpenAI’s specific role (GPT-4 translation and transcription services consumed by IDF) is documented via +972 Magazine reporting linked from Who Profits ²¹.

Norwegian Sovereign Wealth Fund / KLP Divestment:

NBIM (Norway’s Government Pension Fund Global) excluded Israeli banks and Caterpillar (August 2025) based on occupation/settlement criteria. No AI company, OpenAI, or Microsoft was excluded based on AI/military nexus ³⁸. KLP excluded Caterpillar (June 2024) and Israeli banks based on conduct-based criteria. No AI company or OpenAI exclusion has been confirmed ³⁹. No institutional investor divestment decision specifically citing OpenAI’s military-adjacent activities has been identified ³⁸³⁹.

End Notes