CFPB Action Looms Over Gauntlet AI as Founder Allred Claims Immunity with 'No Payment Ever' Model

Austin, Texas – Gauntlet AI, an intensive artificial intelligence engineering program, is operating under a "no payment from students ever" model, a direct response to the regulatory scrutiny that impacted its founder Austen Allred's previous educational ventures. Allred recently asserted that entities he refers to as the "student loan cartel" are attempting to scrutinize Gauntlet AI, but are confounded by its tuition-free structure.Austen Allred, CEO of Gauntlet AI, stated on social media, "The same student loan cartel who tried to kill ISAs have been trying to figure out how to go after Gauntlet AI. Except we literally require no payment from students ever, no matter what." He further added, "They can’t figure out how that’s a scam, but they really, really want it to be," highlighting perceived external pressures.This statement follows significant regulatory action against Allred's prior company, Lambda School, which later rebranded as BloomTech. In April 2024, the Consumer Financial Protection Bureau (CFPB) issued an order against BloomTech and Allred, citing deceptive practices related to Income Share Agreements (ISAs). The CFPB found that ISAs were misrepresented as non-loans and that job placement rates were inflated.The CFPB's ruling permanently banned BloomTech from all consumer-lending activities and prohibited Allred from engaging in student-lending activities for a decade. The agency also ordered BloomTech and Allred to pay over $164,000 in civil penalties. This history provides crucial context for Allred's current claims regarding Gauntlet AI's payment model.Gauntlet AI offers a rigorous 10-week program, demanding 80-100 hours of work per week from participants, with all expenses covered. The program guarantees a minimum $200,000 annual job offer upon successful completion, aiming to transform engineers into "world-class AI-First developers." This model appears designed to bypass the financial and regulatory pitfalls associated with ISAs, which the CFPB classified as loans.The program's structure, which relies on the success of its graduates securing high-paying positions, suggests a financing model potentially supported by hiring partners or investors who value access to highly trained AI talent. Despite the clear differentiation from past ISA models, the legacy of regulatory challenges continues to draw attention to Gauntlet AI's innovative, yet unconventional, approach to education financing.