Oakland, California
Elon Musk spent the better part of three days on stage accusing OpenAI and its executives of tricking him into donating money to help found the company, now one of the world’s largest AI companies.
The lawsuit pits Musk against his former collaborators-turned-competitor, OpenAI CEO Sam Altman and president Greg Brockman, who he claims were unjustly enriched by deviating from OpenAI’s founding mission as a nonprofit and becoming a for-profit company. Musk also named Microsoft as a co-defendant in the lawsuit, accusing the company of aiding and abetting OpenAI’s violation of a charitable trust.
The great man and the high stakes of the case were on full display in the courtroom, as Musk regularly clashed with OpenAI’s lawyers, accusing him of trying to “frame me.” The judge has at times reprimanded those involved, telling them to actually answer questions asked by Musk and warning them to stop talking about whether AI will cause human extinction.
OpenAI and Microsoft allege that Musk was instrumental in establishing the company’s for-profit arm. They claim he’s suing because he doesn’t have full control over OpenAI and is only trying to outcompete his competitors.
OpenAI lawyer William Savitt suggested this. Musk resigned from OpenAI’s board in February 2018 because he was prevented from taking unilateral control of the company. But Musk said he was stepping down from the board to focus on other companies, including SpaceX and Tesla.
Savitt suggested that Musk acted to undermine OpenAI in the years after he left the board, particularly after founding a competing company, xAI.
In his question, Savitt asked whether Musk had revealed that he was starting his own AI company when he signed an open letter in 2023 advocating a moratorium on the development of AI systems more powerful than OpenAI’s GPT-4. Savitt also mentioned the OpenAI acquisition plan that Musk led last year with a group of for-profit investors, to which Musk responded, “There’s nothing wrong with having a for-profit organization. You just can’t steal charity.”
Savitt also questioned why Musk did not form an AI nonprofit after leaving OpenAI’s board. Musk said that just because he started OpenAI, he didn’t create something new.
“If you’ve already started a nonprofit, why start another nonprofit? It doesn’t make sense,” Musk said.
Arguments in court, just before questioning began Thursday, went beyond OpenAI’s founding to the security risks posed by AI.
Before the jury and Musk were seated Thursday, Musk’s lawyer Stephen Moro told OpenAI’s lawyer and judge Yvonne Gonzalez Rogers that AI “could kill us all.” But Judge Gonzalez Rogers said such damning statements could not be tolerated in front of a jury, especially given that Musk founded his own commercial AI company, xAI.
“I think there are a lot of people who don’t want to put the future of humanity in Mr. Musk’s hands, but that’s not the point. We’re not going to get into those questions,” Rogers said, noting that the case is not about whether AI has harmed humanity.
The central question in the lawsuit is whether OpenAI and its management unfairly turned the company into a profit-seeking company, violated its original mission, and misled Musk.
Musk is one of the company’s co-founders and provided $38 million to OpenAI. However, he retired in 2018 and stopped all payments by 2020.
“I gave them free money to build a startup,” Musk testified, saying he thought he was donating to a nonprofit that aims to make AI possible “for the benefit of humanity.”
However, emails shown to the jury show that as early as 2015, before OpenAI was officially announced, Musk proposed including commercial entities in OpenAI. OpenAI’s lawyers said in 2017 that he directed senior advisers to register a commercial corporation in OpenAI’s name, citing meeting minutes and registration documents.
Musk testified this week that he has no problem with OpenAI having a for-profit subsidiary “as long as it doesn’t overtake” nonprofits, which he argued is what ultimately happened.
On Wednesday, Savitt showed Musk’s emails and text messages from 2018 in which Altman tried to tell Musk about OpenAI’s plans to secure additional funding from Microsoft. (Musk did not reply to all messages.)
One of the emails at the time included a term sheet for a proposed corporate structure that specified that OpenAI would seek to raise $10 billion in the future, but Musk testified that he “didn’t read the fine print.”
“It’s a four-page document,” Savitt replied.
But Musk testified that his trust in OpenAI’s leaders began to waver. Musk told Altman in 2022 that OpenAI’s $20 billion valuation following Microsoft’s $10 billion investment felt like a “bait and switch.”
“I agree that it makes me feel bad,” Altman said, noting that Musk turned down an offer of equity from OpenAI.
Musk’s race to build better AI than Google was the motivation for funding OpenAI, he testified. For example, Google’s DeepMind lab has been conducting important research for many years.
“DeepMind is moving very fast, and I’m worried that OpenAI isn’t moving fast enough to catch up. In hindsight, establishing DeepMind as a nonprofit may have been the wrong move,” Musk said in a 2016 email to one of his colleagues at Neuralink, another of Musk’s companies.
Musk testified Tuesday that he is concerned that Google’s approach to AI is not secure enough. Musk said there needs to be “some kind of countermeasure” against Google, which is “an open source nonprofit organization, not a commercial closed source organization.”
OpenAI’s lawyer Savitt questioned Musk over two days, Wednesday and Thursday. At times, their interactions became tense.
Mr. Savitt asked Mr. Musk to stick to a “yes” or “no” answer, but at one point Mr. Musk asked if Mr. Savitt would stop interfering.
“Your questions are not simple. They are designed to fool me,” Musk told Savitt early Wednesday morning, comparing the questions to the classic fallacy: “Have you stopped beating your wife?” The judge interrupted Musk and told him, “I’m not going there.”
On Wednesday, after the jury and Mr. Musk left the courtroom for the day, Judge Gonzalez Rogers acknowledged to OpenAI’s lawyers that Mr. Musk had “sometimes had a difficult time.”
