Musk lays out his souring relationship with OpenAI in a second day of testimony

Oakland, Calif. (CNN) — Elon Musk sparred with OpenAI’s attorney under cross examination on the second day of his testimony, as lawyers for both sides zeroed in on his souring relationship with the organization that kicked off the AI race.

Musk claims OpenAI betrayed its initial nonprofit mission when it changed its corporate structure; OpenAI, for its part, claims Musk’s suit is meant to derail its position as a competitor to his own artificial intelligence company, xAI.

Musk’s attorney presented previous communications between the billionaire and OpenAI’s leaders, including CEO Sam Altman, aiming to support allegations that the ChatGPT maker misled him. And OpenAI’s attorney, William Savitt grilled Musk on his contributions to the company and whether it was his idea for OpenAI to pursue profits. The exchanges grew tense at times, with Musk being asked by Savitt to stick to “yes” or “no” answers.

Musk will take the stand for a third-straight day on Thursday. OpenAI’s attorneys will finish cross-examination, and Musk’s attorney will then ask a second round of questions.

The trial comes as OpenAI is planning what could be a blockbuster IPO – and potentially a cash infusion that could help the company cement its early lead in a global race to dominate AI.

‘I was a fool,’ Musk says

Much of the early questioning on Wednesday focused on early internal emails between Musk and OpenAI executives including Altman and President Greg Brockman who were present in court, over possible plans to include a for-profit structure.

Musk said he was fine with a for-profit “as long as it was a subsidiary of the nonprofit.”

“What you can’t have is the for-profit become the main event, and that’s what we have here,” he told the court.

Musk was questioned about his direction of the head of his family office, Jared Birchall, to register a for-profit public benefit corporation in 2017 in OpenAI’s name, saying he did so “in case it was needed.”

In emails presented as evidence, Musk was also shown saying he needs to have control of the proposed corporation.

“I needed to make sure it would go in the right direction and I was providing almost all the money,” he told the court.

When the other co-founders expressed concern over such a set up, Musk told the court he believed they had “gone back on what they had previously agreed” and “what they really wanted to do is create a for-profit where they had as much shareholder ownership as possible.”

In another email presented as evidence, Musk told the cofounders that he would “no longer fund OpenAI until you make a firm commitment to stay nonprofit.”

“I was a fool,” he told the court. “I gave them free funding to create a startup.”

Microsoft’s involvement in OpenAI’s growth has also been central to Musk’s complaint. OpenAI in 2022 announced a $10 billion investment from Microsoft that valued the company, now with a for profit subsidiary, at $20 billion. It was then, Musk told the court, that he’d “lost trust in Altman” and grew concerned that “they were really trying to steal the charity.”

Musk messaged Altman a link to an article about OpenAI’s valuation in 2022, evidence presented to court showed, and told the court he felt it was “a bait and switch.”

Altman’s response to Musk’s text from 2022 read “I agree this feels bad. We offered you equity when we established the cap profit, which you didn’t want at the time. We are still very happy to do any time you’d like.”

Savitt tried to point out inconsistencies between Musk’s statements in court and those on X, his social media site, from whether Tesla was working on artificial general intelligence to how much he actually gave OpenAI. Savitt also pressed Musk, critically, on whether he ever proposed that OpenAI form a for-profit arm, pointing to emails and meeting notes where Musk appeared to say OpenAI needed a for-profit aspect in order to compete against Google.

Savitt’s line of questioning led to a particularly tense interaction between Musk, Savitt and US District Court Judge Yvonne Gonzalez Rogers.

“Your questions are not simple. They are designed to trick me, essentially,” Musk told Savitt when responding to “yes” or “no” questions. Musk tried to compare his line of questioning to the classic loaded question of “have you stopped beating your wife,” but Rogers cut him off, saying they were “not going to go there.”

A legal battle over the future of AI

In his first day of testimony, with OpenAI CEO Sam Altman watching across the courtroom, Musk laid out a case that he had the key role in creating OpenAI. The company was meant to benefit all of humanity, with open-source code that would make it the antithesis of companies meant only to benefit their shareholders.

OpenAI’s creation, Musk said, was borne out of his longstanding concerns about AI and how the technology could be used to harm humans, perhaps even deeply.

And Musk, known for his sense of drama and sweeping promises in his own business ventures, said his case could also undermine the entire foundation of charitable giving in the United States should he lose.

OpenAI’s chatbot, ChatGPT, has made it a household name, with CEO Sam Altman among the most famous Big Tech leaders in the world. But Musk, the world’s richest man, is himself a major tech leader. Their clash has pitted two high-profile men with seemingly different visions of artificial intelligence in one of the few places where their money and celebrity hold less power than in global markets, research circles or the media: a courtroom.

The nine-person jury, selected on Monday, will advise US District Court Judge Yvonne Gonzalez Rogers as she decides whether to apply Musk’s requested remedies, including reversion of OpenAI to its nonprofit structure; the removal of Altman and OpenAI President Greg Brockman from the board; and $130 billion in damages, to go to OpenAI’s nonprofit foundation.

Already, Judge Rogers has made clear that she intends to brook no nonsense from the rich, powerful men in her courtroom. Before testimony began Tuesday, she called out both sides for their social media posts on the case.

“All of you try to control your propensity to use social media to make things worse outside this courtroom,” she said. “Let’s let this play through. Perhaps you’ve never done that before. This would be a first.”

This story has been updated with additional information.

The-CNN-Wire
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