Elon Musk Testifies He Was a ‘Fool' to Fund OpenAI (4 minute read)
Elon Musk testified in court that he regrets giving OpenAI $38 million when it was nonprofit, now seeking $180 billion in damages to unwind its for-profit conversion.
What: Musk is suing OpenAI, Sam Altman, and Greg Brockman, claiming they manipulated him into donating to what he believed was a nonprofit benefiting humanity, only to convert it into an $800 billion for-profit company. He wants the court to reverse the conversion, remove Altman and Brockman from leadership, and award over $180 billion in damages to OpenAI's nonprofit parent.
Why it matters: This lawsuit represents a major clash between AI industry titans that could potentially reshape OpenAI's corporate structure and set precedents for how nonprofit-to-for-profit conversions are handled, especially when early donors feel misled about the organization's mission.
Deep dive
- Musk testified he gave OpenAI $38 million in donations when it was nonprofit, far short of his initial $1 billion commitment, though he claims he also "contributed my reputation"
- OpenAI's defense argues Musk knew about and supported the for-profit conversion, but sued only after founders refused to give him unilateral control of the company
- During tense cross-examination, OpenAI's attorney highlighted contradictions in Musk's testimony, including his claim Tesla wasn't pursuing AGI despite tweeting that "Tesla will be one of the companies to make AGI"
- Email evidence shows Musk once suggested folding OpenAI into Tesla, making his current competitive stance with xAI particularly relevant to the case
- Musk accused opposing counsel of asking questions "designed to trick me" when pressed on tax breaks and his role in starting the company
- The lawsuit centers on whether OpenAI improperly converted from nonprofit to for-profit after receiving donations meant for a charity benefiting humanity
- Altman and Brockman attended the proceedings, taking notes and conferring during Musk's testimony
- Musk acknowledged his xAI company is "technically competitive but much smaller than OpenAI"
Decoder
- AGI (Artificial General Intelligence): AI that can understand, learn, and apply knowledge across a wide range of tasks at human-level capability, as opposed to narrow AI designed for specific tasks
- For-profit conversion: The process of transforming a nonprofit organization into a for-profit company, which changes tax status, governance structure, and how proceeds are distributed
Original article
Elon Musk says he was a fool to back OpenAI when it was a nonprofit. Musk gave the startup $38 million of essentially free funding. OpenAI is now worth $800 billion. Musk has asked a court to unwind OpenAI's recent conversion to a for-profit entity and is seeking damages of more than $180 billion.