Elon Musk testifies Sam Altman was not 'honest' about OpenAI's nonprofit mission

By Deepa Seetharaman and Max A. Cherney

OAKLAND, California, April 29 (Reuters) – Elon Musk testified on Wednesday that Sam Altman and other OpenAI leaders were not honest with him about their plans to use the lab’s nonprofit structure to develop artificial intelligence for the public good.

The world’s richest person was testifying for a second day in a high-stakes trial over a lawsuit he brought accusing OpenAI, its co-founder and Chief Executive Altman, and its President Greg Brockman of ditching the mission to develop AI responsibly when they created a for-profit entity in 2019.

A nine-person jury in Oakland, California, federal court saw an email Musk sent to Altman and Brockman in 2017, referring to himself as a “fool” for providing them funding for what he believed was a nonprofit venture.

“I felt like they had not been honest with me,” Musk said under questioning by his lawyer, Steven Molo. “What they really wanted to do was create a for-profit where they had as much shareholder ownership as possible.”

Musk, wearing a dark suit over a white shirt, glanced at the jury occasionally as he spoke.

Later, he is expected to be cross-examined by a lawyer for OpenAI, which has argued that Musk is motivated by a compulsion to control the company. 

OpenAI has said it created a for-profit entity to allow it to buy computing power and pay top scientists. 

MUSK ACKNOWLEDGES XAI HAS SMALLER MARKET SHARE

The trial highlights the depth of the rupture between Musk and Altman. The two Silicon Valley icons once partnered in the quest to develop the fast-growing AI technology, a pillar of growth in the U.S. economy that is also fueling anxiety about job losses.

The pair co-founded OpenAI in 2015 to create a benevolent steward of the technology and fend off rivals such as Alphabet’s Google. Musk, the CEO of Tesla and SpaceX, left OpenAI in 2018 after investing $38 million. Microsoft, also a defendant, invested $10 billion in OpenAI in 2023. 

Musk acknowledged that most technology companies were for-profit entities, but said OpenAI sought to use its nonprofit status to reassure the public it was developing AI safely while at the same time allowing its for-profit arm to become the “main event.”

“They should not get rich off a nonprofit, that’s not right,” Musk testified. “They can’t have it both ways, the positive halo effect of a charity and enrich themselves greatly.”

Musk testified that he left OpenAI’s board to focus on SpaceX and Tesla. He said he stopped funding OpenAI in 2020.

Lawyers for OpenAI and other defendants have argued that Musk is seeking to bolster his own AI company, SpaceX unit xAI, which lags OpenAI in user adoption. They have also said AI safety was not a priority for Musk when he was with the company and that he derided employees who focused on it as “jackasses.”

Asked by Molo if he had ever called an OpenAI employee a “jackass,” Musk said it was possible.

“I don’t lose my temper. I’m not a yeller. I don’t yell at people,” Musk testified. “Sometimes you have to use language that gets people out of their comfort zone.”

Musk acknowledged on the stand that xAI had a smaller market share than OpenAI.

“I think at this point it’s technically a competitor but much, much smaller than OpenAI,” he said.

MUSK SEEKS $150 BILLION IN DAMAGES

The trial comes as OpenAI prepares for a potential initial public offering that could value it at $1 trillion, Reuters has reported. The company also faces growing competition from rivals including Anthropic, while a Wall Street Journal report that OpenAI had missed some internal performance targets weighed on the tech-heavy Nasdaq Composite on Tuesday.

Musk is seeking $150 billion in damages from OpenAI and Microsoft, with any award going to OpenAI’s charitable arm. He also wants OpenAI to revert to a nonprofit, with Altman and Brockman removed as officers and Altman removed from the board. 

His claims include breach of charitable trust and unjust enrichment.

OpenAI is currently structured as a public benefit corporation, in which the nonprofit and other investors including Microsoft hold stakes. 

(Reporting by Deepa Seetharaman and Max A. Cherney in Oakland, CaliforniaWriting by Luc CohenEditing by Shri Navaratnam, Rod Nickel)