The encyclopedia · Advertising & PR · Marketing decision · 2026
Growth Cave sold 'AI software' that automated almost nothing — the FTC made it pay $48.6M
Growth Cave marketed 'AI' that would automate 'nearly 100%' of running an online course business. The FTC said it needed manual work, and fined it $48.6M.
Growth Cave · 2026-01-27
What happened
Growth Cave, LLC sold a business-opportunity package built around 'GrowthBox,' marketed as AI software that would 'automate nearly 100% of the process' of setting up and running an online education course — the kind of hands-off passive-income pitch aimed at consumers with no existing business.
The FTC's complaint said the product did not do what the marketing claimed: rather than automating the business, GrowthBox required users to manually upload their own advertisements, set their own appointments, and write the messages sent to potential customers by text and email — the exact work the pitch had promised the software would handle.
On 27 January 2026 the FTC announced a settlement with Growth Cave and co-CEOs Lucas Lee Tyson and Osmany Batte requiring $48.6 million in payments, partially suspended based on inability to pay, plus asset liquidation, with proceeds going to consumer redress. The case was the FTC's third 'AI-washing' action since April 2025, part of a run of enforcement against inflated AI capability claims in marketing.
Why it happened
- The marketing promised near-total automation because that claim, not the software's actual capability, was what sold the business-opportunity package to people with no existing business to run.
- Labeling ordinary manual tools 'AI software' let the pitch borrow the credibility of automation without building the automation the pitch described.
- Selling to consumers with no way to evaluate what the software could really do meant the gap between claim and product went uncaught until regulators, not customers, tested it against the marketing.
The lesson
Calling a manual tool 'AI' to sell automation it doesn't deliver is now tested literally: what the software does without the user, versus what the ad says it does. The gap is the case.
Aftermath
The FTC folded Growth Cave into a wider 'AI-washing' enforcement push — its third such case in under a year — putting other business-opportunity marketers on notice that unverified AI-automation claims would be tested the same way.
Sources
- Federal Trade Commission — FTC Secures Settlement Banning Growth Cave Defendants From Marketing Business Opportunities
- The State AG Report — FTC Settlement Targets Deceptive Business Opportunity and Credit Repair Scheme
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