Elon Musk and OpenAI boss Sam Altman have faced off in a California federal court in a blockbuster trial that could have far-reaching consequences for the AI industry and oblige the ChatGPT maker to profoundly revamp its business.
The legal clash across the bay from San Francisco is widely seen as a battle of egos pitting the world’s richest person against a start-up Mr Musk once backed and now trails in the booming AI sector.
At the heart of the case is an accusation by Mr Musk that Mr Altman drove OpenAI to become an industry juggernaut seeking to dethrone the likes of Google, Apple and Microsoft as a big tech profit maker, betraying its non-profit mission.
Mr Musk argues in his lawsuit that he was deceived about OpenAI’s mission being altruistic.
“We’re here today because the defendants in this case stole a charity,” Mr Musk’s lawyer, Steven Molo, the first to address the court ahead of lawyers from OpenAI and Microsoft, said on Tuesday local time.
The company is “no longer operating for the good of humanity as a whole”, but as a “for-profit venture operating in the interests” of OpenAI and Microsoft, its biggest investor, Mr Molo argued.
‘I didn’t want to pave the road to hell with good intentions’
When he took the stand, Mr Musk – the world’s richest man – said: “If a verdict comes up that effectively makes it okay to loot a charity, the entire foundation of charitable giving in America will be destroyed – that’s my concern.”
The feud dates back to 2015, when Mr Altman convinced Mr Musk to co-found OpenAI, promising a non-profit lab whose technology “would belong to the world”.
Mr Musk invested at least $US38 million ($52.92m), but the split was finalised in 2018, and the OpenAI Foundation created its commercial subsidiary a year later.
Microsoft then began investing and increased its commitment to $US13 billion ($18.1bn), a stake now valued at approximately $US135bn ($188bn).
Mr Musk traced his interest in OpenAI to a belief that Google did not care about AI safety as it blazed ahead with the technology.
He told the court he backed the project in the spirit of it being a non-profit endeavour that made the good of society the top priority, with any technology developed made open source.
“I didn’t want to pave the road to hell with good intentions,” Mr Musk said of his vision for OpenAI.
“I didn’t want to fund OpenAI to make safe AI and then find out that it was actually making unsafe AI.”
Mr Musk also said he was instrumental in recruiting key hires, including Ilya Sutskver, a top AI engineer then at Google who went on to play a major role in driving technology at the lab.
He said he also made initial contact with AI chip maker Nvidia and tech giant Microsoft to provide crucial technology, opening doors that would not have been available to OpenAI’s other co-founders, who were little known at the time.
Musk ‘will do anything he can to attack OpenAI’
William Savitt, the lead lawyer for OpenAI, earlier argued that the company had no choice but to open up to outside investors given the high costs of AI and that, in any case, the OpenAI non-profit arm “remains in control of the organisation”.
Moreover, a bitter Mr Musk, he said, “will do anything he can to attack OpenAI” out of regret at leaving a project that found phenomenal success after his departure.
OpenAI has become an AI superpower valued at $US852bn ($1.18 trillion) and is preparing for a high-profile IPO on the back of its ChatGPT chatbot, which took the world by storm in 2022.
But OpenAI’s ability to keep raising the capital needed to operate is hamstrung by its convoluted governance structure – in which a non-profit board retains ultimate control over a for-profit arm.
This has long unnerved investors wary of backing a company whose mission explicitly subordinates profit to the broader benefit of humanity.
Mr Musk eventually set up his own lab, xAI, which he merged into SpaceX in February. SpaceX itself is valued at $US1.25tr ($1.74tr), and its IPO, expected in June, could become the biggest in history.
‘Scam Altman’
Moments ahead of the opening statements, Mr Musk and Mr Altman, who both sat with their lawyers at the federal court in Oakland, were asked by Judge Yvonne Gonzalez Rogers to keep social media posts to a minimum during the course of the trial.
In a barrage of social media posts on Monday amplified on the X platform he owns, Mr Musk derisively called the OpenAI chief “Scam Altman”.
Judge Gonzalez Rogers will decide by late May – guided by the advisory jury’s findings – whether OpenAI broke a promise to Mr Musk, or just smartly rode the technology to glory.
Along with calling for OpenAI to be forced to revert to a pure non-profit, Mr Musk’s suit urges the ouster of co-founders Mr Altman and Greg Brockman, who is the start-up’s president.
Mr Musk, who had sought as much as $US134bn ($186bn) in damages, has since renounced any personal benefit, pledging to redirect any award to the OpenAI non-profit.
