Musk testifies he did not read ‘fine print’ about OpenAI becoming for-profit company

OAKLAND, USA – Elon Musk testified during tense cross-examination on Thursday, April 30, that he knew about early discussions around turning OpenAI into a for-profit company but was reassured by co-founder Sam Altman it would remain a nonprofit.

The world’s richest person is suing OpenAI, alleging the company, its co-founder and CEO Altman, and its President Greg Brockman secured his $38 million in donations and personal help by promising to build a nonprofit that would prioritize safe development of AI, before pivoting to create a for-profit entity to enrich themselves.

William Savitt, a lawyer for OpenAI, Altman, and Brockman, pressed Musk on whether he had read a term sheet that Altman forwarded on August 31, 2017, relating to OpenAI’s shift from a nonprofit to a for-profit overseen by a nonprofit.

“My testimony is I didn’t read the fine print, just the headline,” said Musk, wearing a dark suit, dark solid tie and white shirt.

The trial, in its third day in a California courtroom, could determine the future of OpenAI, which spearheaded widespread use of AI with its ChatGPT chatbot and has been raising billions of dollars from investors to build out its computing power ahead of a potential trillion-dollar IPO. Musk is seeking fundamental changes to the governance of the company as well as $150 billion in damages.

OpenAI has said that Musk, the CEO of Tesla and SpaceX, is driven by a compulsion to control OpenAI and is bitter about the company’s success after he left its board in 2018. It has also said Musk did not prioritize safety issues while with the company, and that he is trying to bolster his own AI company, SpaceX unit xAI, which lags OpenAI in user adoption.

‘You cut me off’

At times, Musk expressed frustration with Savitt’s cross-examination.

“Few answers are going to be complete, especially when you cut me off all the time,” Musk said.

US District Judge Yvonne Gonzalez Rogers later admonished Savitt for not letting Musk answer a question, but rejected Musk’s complaints that the lawyer was leading the questioning.

Musk was asked why he did not sue OpenAI earlier, as well as how and why he did not realize it was going to become a for-profit entity. Savitt pointed to emails sent to Musk from other OpenAI founders that show them discussing making OpenAI’s technology closed-source at some point or making money from it.

“I was reassured by Sam Altman and others that OpenAI would continue as a nonprofit,” Musk said.

Musk told the court that the for-profit company now has OpenAI’s assets.

“The for-profit is overwhelmingly where the value is. The for-profit has taken the super majority of the value of the nonprofit,” Musk said.

Under questioning, Musk also said his company xAI used OpenAI to train its own models, adding: “It is standard practice to use other AIs to validate your AI.”

Altman and Brockman were in the courtroom for much of Musk’s testimony, watching intently. Musk was dismissed after more than two hours of questioning, followed by his top aide Jared Birchall taking the stand.

$150 billion in damages

OpenAI, founded in 2015, has evolved from a nonprofit research lab in Brockman’s apartment to a company worth more than $850 billion that is planning a potential initial public offering.

Musk is seeking the $150 billion in damages from OpenAI and Microsoft, one of its largest investors, with proceeds going to OpenAI’s charitable arm. Musk also wants OpenAI to revert to being a nonprofit, with Altman and Brockman removed as officers and Altman removed from its board.

Musk is accusing OpenAI of breach of charitable trust and unjust enrichment. He is suing Microsoft for aiding and abetting the breach of charitable trust.

“I don’t think you should turn a nonprofit into a for-profit,” Musk said in response to questions from Savitt. “There’s nothing wrong with having a for-profit organization, you just can’t steal a charity.”

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

Musk has accused OpenAI of abandoning its mission to develop artificial intelligence for the benefit of humankind.

Steven Molo, a lawyer for Musk, argued in court that expert testimony about AI’s ability to end humankind should be admissible evidence, saying, “Extinction risk is a real problem. This is a real risk. We all could die.”

The judge responded, “I think it’s ironic that your client, despite these risks, is creating a company that’s in the exact same space,” referring to Musk’s AI venture xAI, which is now a part of SpaceX. The judge did not allow the testimony, saying: “This is not a trial on the safety risks of artificial intelligence.”

The trial started on Monday and is expected to last several weeks. The next witnesses after Birchall are expected to be Brockman and AI safety expert Stuart Russell. – Rappler.com

Musk testifies he did not read ‘fine print’ about OpenAI becoming for-profit company