Sorry if I'm being naive, but isn't that like owning a McDonald's and giving homeless people money as long as they spend it at your restaurant? I don't think it's nearly as bad.

Yeah, I was wondering who got hurt here -- the University at least got $2m plus what seems to be valid omics data -- when I figured out it was the investors. The money was carefully laundered through Univ of Utah so this seemed like an arms-length contract, rather than self-dealing.

I think this is the most interesting question in the thread.

When viewed as a donation of services instead of cash, he's simply giving his product away for free in order to collect data to improve his product. In its own right, I'd argue that certainly should be considered charity and deserving of praise.

The questionable part about this transaction seems to pertain to the tax deductions taken. However, it strikes me as unlikely that the loss on the donation withstanding any reasonable tax deduction would be covered by any personal payback on the donation.

The company could have donated the services, but that wouldn't have had the same impact. The donor got a big tax deduction, which then translated into revenue and data collection for his company. If the company had simply donated the services, it wouldn't have looked like they got a big contract. They also wouldn't have gotten the cash infusion, from the founder and funneled through the university.