Elon Musk Says Sam Altman Tricked Him Into Funding OpenAI

During the second day of the landmark trial between Sam Altman and Elon Musk, the Tesla founder told the Oakland courthouse that he was a “fool” to fund OpenAI through its early years.

Testifying in the lawsuit he brought against Altman, which claims the company’s creators betrayed their mission for profits, Musk suggested Wednesday that Altman and cofounder Greg Brockman wanted to “have your cake and eat it too.”

“If you go nonprofit, you’ve got a sort of moral high ground,” he testified.

Musk’s testimony tells one version of founding OpenAI: that he, fearing the dangers of artificial intelligence, pursued its development with the goal of benefiting the common good, alongside, he thought, like-minded collaborators. But behind the scenes, those cofounders engaged in a “long con” to profit at his expense.

“What they really wanted was a for-profit, where they could make as much money as possible,” Musk said later.

Whether the jury believes him will be integral to the decision they’re tasked with making, as they determine whether OpenAI breached charitable trust and engaged in unjust enrichment as it evolved from a nonprofit organization to its current $730 billion iteration.

Under cross-examination, Altman’s attorney, William Savitt, questioned Musk’s story and credibility as an altruistic benefactor. He pointed to an email Musk sent to Altman in 2015, which said it would be “probably better” if OpenAI operated as a for-profit company with a parallel nonprofit.

In another email sent to colleagues at his neurotechnology company, Neuralink, Musk said that Google’s AI development was moving very fast, and that he was concerned OpenAI was not on the path to catch up.

“Setting it up as a nonprofit might, in hindsight, have been the wrong move,” Musk wrote. “Sense of urgency is not as high.”

Savitt asked if, in 2017, Musk suggested at a party that OpenAI should create a for-profit. He said it was just after the company’s AI model had beaten Defense of the Ancients, a battle video game, which was a pivotal moment in the development process.

Musk said he didn’t remember giving instructions to create a for-profit at the time.

“This was nine years ago,” he said.

Savitt said Tuesday that in 2017, OpenAI executives, including Musk, were in the midst of conversations about whether and how to transition the company to a for-profit structure.

According to OpenAI’s court filings, as early as summer 2017, Musk had insisted on holding a majority equity stake in any for-profit entity, serving as CEO and controlling its board of directors.

Pressed by Savitt about what Musk meant by “expressing what you said about control,” the Tesla founder and billionaire said: “I try to be as literal as possible.”

In the fall of 2017, Brockman and Ilya Sutskever, another top OpenAI executive, emailed Musk with concerns about the for-profit structure he proposed. Shortly thereafter, discussions over the structure collapsed, and Musk stopped making significant quarterly funding contributions, OpenAI alleges.

He left the company less than six months later.

Savitt framed the breakdown and Musk’s exit as a result of his not getting control of the for-profit, and the other executives’ focus on maintaining its philanthropic mission. He suggested that Musk tried to pressure them to accept his terms by pausing the majority of his financial backing.

“You knew that would create financial pressure for the organization,” Savitt said.

Musk denied that was his intention. Instead, he alleged that Altman convinced Brockman and the others to go against his proposal, and that their concern over his desire for control was disingenuous.

“I’m not going to fund something if I don’t have confidence in the people,” he said.

When asked whether he proposed that OpenAI be folded into Tesla, Musk said: “There were a lot of ideas that were brainstormed at the time.”

In an email, he wrote that doing so would be the “only path that could even hope to hold a candle to Google.”

Musk said he left OpenAI in February 2018 because he was focused on Tesla’s survival, and believed that OpenAI intended to continue operating as a nonprofit.

Savitt also laid out a series of exchanges between Musk and Altman, in which the OpenAI CEO kept him apprised of the company’s corporate structure. He said in March 2018, Musk responded to an email that noted the creation of a for-profit entity of OpenAI with “OK by me,” and was sent a term sheet for OpenAI LP that summer.

Savitt also said Altman emailed Musk a draft of the company’s public announcement of its for-profit arm in March 2019, and texted him asking if he had time to talk about Microsoft’s plan to invest in OpenAI. Musk never responded to that text, according to Savitt.

Musk said he was busy with his other companies in 2018, and while he was aware that it had added a for-profit entity, he hadn’t lost complete faith in the company. While he’d suspended quarterly $5 million funding contributions prior to his departure, he continued to make some contributions until 2020.

He said that he’d gone from enthusiastically supportive to uncertain about OpenAI’s mission, but that he’d fully suspended his contributions when he felt that the company was “deliberately not a nonprofit.”

When asked why he waited until 2024 to bring the suit, Musk said that’s when he determined OpenAI breached charitable trust.

“Thinking that someone might steal your car is not the same as [if] someone has stolen your car,” Musk said. He said after enlisting his attorney, Alex Spiro, to investigate, he heard from him in 2023 that “the car had been stolen.”

“I would have sued sooner if I thought the charity had been stolen sooner,” Musk continued.

The trial and Musk’s testimony are expected to continue on Thursday.