Madlin Mekelburg and Rachel Metz
Updated ,first published
Oakland, California: OpenAI’s Sam Altman testified that he was “extremely uncomfortable” with Elon Musk’s insistence that he have complete control over a proposed for-profit subsidiary of OpenAI back in 2017.
Altman told jurors that Musk said he only wanted control of the entity in its early days, but that the billionaire was unwilling to sign a contract to that effect, frustrating fellow co-founders of the artificial intelligence startup.
“A particularly hair-raising moment was when my co-founders asked Mr Musk, ‘If you have control, what happens when you die?’” Altman said. “He said something like, ‘I haven’t thought about it a ton, but maybe I should pass it to my children.’”
“I didn’t feel comfortable with that,” Altman added.
The OpenAI chief executive officer took the witness stand on Tuesday morning in the final days of the high-profile trial. Musk has accused Altman and company president Greg Brockman of seeking to enrich themselves by abandoning the non-profit’s altruistic mission and converting it into a for-profit business company with billions of dollars in investments from Microsoft. Since its start as a nonprofit funded primarily by Musk, OpenAI has evolved into a capitalistic venture now valued at $US852 billion ($1.2 trillion).
More than two weeks into the trial in a federal courthouse in Oakland, California, neither of the tech titans has emerged as an overly sympathetic character. But nobody has more to lose than Altman.
Musk previously testified that he started losing confidence in Altman and Brockman during the 2017 negotiations about OpenAI’s future. He was OpenAI’s biggest financial backer at the time, and thought his equity in its for-profit venture should reflect that.
Musk testified that he gave OpenAI roughly $US38 million in the form of quarterly donations and rent payments for its office space – far less than the $US1 billion he initially pledged.
Altman told jurors on Tuesday that he contributed $US3.75 million to the non-profit when it first started, and then gave “a multiple of that” in equity interests he held to employees in its early days. Altman has repeatedly said he doesn’t currently have a direct equity stake in OpenAI.
Altman said he and the other co-founders also devoted significant time and effort toward launching OpenAI, and he felt frustrated that those efforts were not reflected in Musk’s proposals for the equity split in the for-profit venture.
“It was totally true that Elon was proposing to put in a lot of money, and Elon had you know a lot of brand value,” Altman said. “But I really wanted to stand up for Greg and Ilya,” referring to OpenAI co-founder Ilya Sutskever, who went on to become its chief scientist for several years.
“One of the most special things about OpenAI has been we have incredible team spirit and teamwork,” Altman told jurors. “And I remember in these conversations, I felt that Elon just really deeply didn’t get that and wasn’t valuing it.”
Altman said he and the other co-founders also devoted significant time and effort toward launching OpenAI, and he felt frustrated that those efforts were not reflected in Musk’s proposals for the equity split in the for-profit venture.
Musk departed OpenAI’s board in 2018, and stopped paying rent on its office space in 2020. Altman said Musk’s departure affected OpenAI “up and down” and raised questions about its fundraising capabilities without him on board.
“There were questions about what this would mean for our funding and what would happen with Mr Musk’s competitive effort,” Altman said. “Mr Musk is a well-known figure and known to be fairly mercurial and people wondered if he would take a vengeance on us or something.”
The stakes at the trial are big for OpenAI and Altman. Musk is seeking tens of billions of dollars in damages, and the unwinding of the ChatGPT maker’s for-profit conversion that was completed in October. He’s also pushing for Altman and Brockman to be removed from their leadership roles.
OpenAI has argued that Musk’s lawsuit is primarily an attempt to undermine a top competitor to his own AI company, xAI.
Throughout the trial, witness testimony has repeatedly focused on the management styles and trustworthiness of Musk and Altman, with both coming under fire.
‘Mr Musk is a well-known figure and known to be fairly mercurial and people wondered if he would take a vengeance on us or something.’
Sam Altman
In video testimony, OpenAI’s one-time chief technology officer, Mira Murati, recalled Musk “creating chaos” among top executives at the company. She also said Altman “undermined” her and did not always tell the truth.
Sutskever said he was thinking about concerns with Altman’s leadership for about a year before he and other board members ousted Altman as CEO in 2023. Altman returned five days later after employees protested.
Altman’s testimony also caps off years of mounting animosity between two tech billionaires who bonded over a shared vision for AI development before falling out over the company’s direction.
Musk has been unsparing in his criticisms of Altman, attacking not just his leadership at the company but his character. Musk has called Altman a “liar” and a “swindler”.
After Musk made an unsolicited $US97 billion offer to control OpenAI last year, Altman’s rhetoric grew less measured. The OpenAI CEO suggested Musk was simply trying to slow down a competitor and said he didn’t think Musk was “a happy person”. Altman added: “Probably his whole life is from a position of insecurity – I feel for the guy.”
Bloomberg, AP
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