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The most expensive frenemy fallout in tech history began Monday, in a federal courtroom in Oakland.<\/p>\n
After over a decade of partnership, Tesla CEO Elon Musk is suing OpenAI CEO Sam Altman for more than $130 billion, alleging that Altman and OpenAI cofounder Greg Brockman swindled him and betrayed the company\u2019s founding charitable mission. The chief complaint centers on Altman\u2019s 2023 move to spin OpenAI\u2019s core technology into a for-profit subsidiary, now valued at almost $1 trillion and which could go public as soon as late 2026.<\/p>\n
Musk, who donated about $38 million of OpenAI\u2019s earliest funding, wants the judge to unwind the for-profit conversion, force Altman and Brockman out of their roles, and direct any damages to OpenAI\u2019s nonprofit arm rather than to himself. He does not want any damages paid to him; rather, it appears his primary aim is to knock \u201cScam Altman\u201d\u2014his new nickname for his old friend\u2014down.\u00a0<\/p>\n
To counter, it appears that an equally hurt Altman will bring up all the dirt he has on Musk, including a Burning Man trip and a former OpenAI board member who is also the mother of four of Musk\u2019s known 14 children. Already, the pretrial documents unearthed raw text messages between the two powerhouses, including one from February 2023 in which Altman says, \u201cYou\u2019re my hero,\u201d before adding: \u201cI am tremendously thankful for everything you\u2019ve done to help\u2014I don\u2019t think OpenAI would have happened without you\u2014and it really [expletive] hurts when you publicly attack OpenAI.\u201d<\/p>\n
Musk\u2019s reply, also now in evidence, reads: \u201cI hear you and it is certainly not my intention to be hurtful, for which I apologize, but the fate of civilization is at stake.\u201d<\/p>\n
The trial is scheduled to run for four weeks, with both Altman and Musk testifying, as well as other power players like Microsoft CEO Satya Nadella expected on the stand.<\/p>\n
Representatives from OpenAI and Tesla did not immediately respond to Fortune\u2019s requests for comment.<\/p>\n
Why the lawsuit is a longshot\u00a0<\/p>\n
Sam Brunson, a nonprofit law professor at Loyola University Chicago, who has been following the case closely, told Fortune the threshold question\u2014whether someone who gave money to a charity can sue if the charity changes course\u2014almost always cuts against the donor.<\/p>\n
\u201cAs a general rule, the answer to that is no,\u201d he said. \u201cIf I donate to an organization, I\u2019ve given up that money, and if it turns out that I don\u2019t like what they do subsequently, my recourse is to stop donating to them.\u201d<\/p>\n
The way around that rule, Brunson explained, is fraud, or proving you were lied to in the moment you donated\u2014which is exactly what Musk has spent two years trying to argue.<\/p>\n
The most damaging single piece of evidence to that effect comes from Brockman\u2019s personal notes\u2014or \u201cdiary,\u201d if you\u2019re on Musk\u2019s team\u2014which Judge Yvonne Gonzalez Rogers quoted from directly in her January order sending the case to trial.<\/p>\n
In September 2017, Brockman wrote: \u201cThis is the only chance we have to get out from Elon \u2026\u00a0Financially, what will take me to $1B?\u201d Accepting Musk\u2019s terms, he added, would \u201cnuke\u201d both \u201cour ability to choose\u201d and \u201cthe economics.\u201d<\/p>\n
After a Nov. 6, 2017, meeting during which Brockman and Altman had assured Musk OpenAI would stay a nonprofit, Brockman wrote, \u201c[He] cannot say that we are committed to the non-profit \u2026\u00a0if three months later we\u2019re doing b-corp then it was a lie.\u201d He acknowledged Musk\u2019s \u201cstory will correctly be that we weren\u2019t honest with him in the end about still wanting to do the for-profit just without him.\u201d Days later, under a heading labeled \u201cour plan,\u201d Brockman wrote, \u201cIt would be nice to be making the billions,\u201d but he can\u2019t \u201csee us turning this into a for-profit without a very nasty fight.\u201d<\/p>\n
It\u2019s indeed become a \u201cnasty fight,\u201d and while that evidence might appear damning, Brunson cautions Musk\u2019s framing of events doesn\u2019t actually map onto how nonprofit law works. OpenAI\u2019s nonprofit still exists. Its core technology was licensed into a for-profit subsidiary, but the nonprofit retains all the upside from that subsidiary anyway. Nonprofits are allowed to earn profits; they just can\u2019t distribute them to shareholders.<\/p>\n
\u201cUnless they made an explicit promise to him that they would never create a for-profit subsidiary, it\u2019s hard to see how he was defrauded,\u201d Brunson said. \u201cIt may be that he has an email from Sam Altman that says, \u2018I guarantee you that we will never try to make this a profitable business,\u2019 and in that case, he starts to have a more viable argument. I\u2019m skeptical that such an email exists.\u201d<\/p>\n
Questioning character<\/p>\n
But even if Musk\u2019s documents land, his case ultimately rests on his own testimony, Brunson said. And OpenAI\u2019s plan is to cast him as a jilted, unreliable narrator.<\/p>\n
Judge Gonzalez Rogers barred OpenAI in March from asking Musk about his alleged ketamine use, finding the company hadn\u2019t tied the drug to any specific OpenAI decision. But she carved out an exception: Musk can be questioned about his attendance at the 2017 Burning Man festival, where OpenAI\u2019s lawyers say critical conversations took place\u2014and where Musk\u2019s alleged drug use may explain his inability to recall key discussions about restructuring.<\/p>\n
And there\u2019s Shivon Zilis. A former OpenAI board member and the mother of four of Musk\u2019s children, Zilis is expected to spend roughly three hours on the stand. Musk\u2019s lawyers will use her to corroborate his account of the founders\u2019 early nonprofit commitments. OpenAI\u2019s lawyers are expected to argue she funneled information about the company back to Musk during her board tenure. Brunson said this is where Musk\u2019s personal life becomes a real liability, because he has to convince a jury he could only rely on OpenAI\u2019s representations when he donated.\u00a0<\/p>\n
\u201cIt becomes a point of leverage, and it also will be used to contradict his testimony, to undercut his honesty or his credibility, as he says that he was relying on these things,\u201d he said.<\/p>\n
The whole suit, he added, has a performative dimension on both sides\u2014fueled by the fact that \u201cSam Altman and Elon Musk really, really don\u2019t like each other.\u201d Musk is trying to publicly humiliate Altman; Altman now gets to publicly humiliate Musk back. Which, Brunson noted, is also why the trial may not actually finish.\u00a0<\/p>\n
\u201cIf Elon Musk is concerned about his reputation, maybe that encourages him to settle instead of going all the way through trial,\u201d he said.<\/p>\n
#Musk #Altman #Burning #Man #diary #trial #thinks #Musk #win<\/p>\n","protected":false},"excerpt":{"rendered":"
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