ExclusiveElon Musk vs OpenAI: The Trial That Could Change AI Forever

Lawyer Steven Molo, which is Elon Musk's lawyer, he was asking Greg Brockman, how much did he invest into OpenAI? And Brockman said zero. But he was able to get about a 30 billion dollar ownership of the company. Whereas Elon Musk invested, I believe, invested like 38 million. Yeah. But he has zero ownership. Welcome to another episode of Silicon Valley Front Row. We're back in the studio and we're going to be talking about, it's a very famous trial, the Elon Musk versus, it's not really about Sam Altman, but OpenAI. Right, and others, including Sam Altman. Yeah, yeah, he's part of it. So you are the trial, so maybe we can chat about it. I kind of listen, I listen at least a few hours because you can listen online to the trial. Yeah, that started during the second week because the courthouse was so busy from the trial that they were saying the staff was overwhelmed. So they allowed audio link to listen on YouTube. Oh, interesting. So I'll ask you to give us a sense of kind of what it looks like on the outside, because I've been recently to a trial in Sacramento where there were, you know, the lawyers were there, the judge, the jury, but there was no one in the audience. It was completely empty. We were the only ones, like the few of us who went there to, yeah. That was the drug lab story? Yeah, yeah, yeah. I thought that would be very packed, but no. Yeah, no, nobody was there. So what did it look like on the outside first where you walked in? Yeah, so this was in Oakland, California. There was, it's like a very big building and when you go through, you have to kind of go around and, well, I almost went to the wrong door at first. The guy was like, oh, the court, the courthouses, you have to go out and go behind. Is it a federal courthouse or? Yeah, federal courthouse. So right in front, it's pretty hard to miss because you'll see a lot of camera people, tripods and cameras set up, people just out there. But when you go in, you have to wait for a court martial to bring you in and then you go through security, you know, they check your devices, take it out, no belt, you know, take off the jacket, things like that. No cameras allowed. It's allowed, but there's no recording allowed. So no pictures, not even audio. Yeah, so when I got in, it was so packed. So I was there about three or four days and I wasn't able to get into the actual courtroom where Elon Musk or where the lawyers are. There was only 30 public seats. So their first come first serve and some people were waiting at since 5 a.m. to come in. Yeah, so once those unreserved seats fill up, there's an overflow room where people could go and right there they have two screens showing, giving video and audio in the courtroom. So I still see the face, saw Elon Musk up there. Yeah, he testified for at least two days. 30 people is a very small amount for this kind of trial, but I guess they probably don't want to encourage a huge amount of people. So would you able to see Elon Musk or the others walk in the courtroom? I guess they have a back door, but would you see them outside, you know, driving a car and getting out of the car? I think there's footage of them going through security. Oh, right. I'm not sure which door they came through, but the camera guys were outside and they were, they could, they just zoom in through the windows and you could just see, you know, Sam Altman and the people going through. Yeah. So the way I understand this trial, it's mainly Elon Musk suing, I guess, OpenAI. He wants OpenAI to stay on the non-profit course. That's kind of why I understand that he claims that he wanted it to be a non-profit and he thinks that being a non-profit, it's easier to control the safety of AI and AGI, which we talked about in previous episodes. Is the sound about right? I think that's about right. He wants the company to go back to his original mission, which Elon Musk helped found. So they were supposed to stay a non-profit and supposed to be benefiting humanity. Yes. Right. And I think the original mission was also leave to make the source code open source at some point. But yeah, so he, the court case, from my point of view, it's about trust, loyalty, and then the promise of the You know, and this case is so important because these are big tech executives and the Microsoft CEO is included as well in the lawsuit. But at first this was, people were saying this could decide how non-profits or charities would be affected because Elon Musk said, you know, charities could be stolen. That was Musk's standpoint. But at one point, the open AI lawyer says, whatever happens with this case, it wouldn't affect other cases. So I think that was kind of thrown in there. Yeah. Well, it's interesting. I was listening for a little bit to Greg Brockman's testimony. The president of OpenAI. Yeah. Yeah. Or cross-examination. And for the first five, 10, maybe 15 minutes, I was convinced that that's Sam Altman. It sounds so much like him, you know, the way he talks. And then all of a sudden I hear like they're talking about Sam Altman. I said, yeah, it can't be him then. Talking to third person. Yeah. So that was pretty interesting. They're probably really close. So maybe they start speaking and sounding like. And another thing is, it's also kind of confusing because Sam Altman is the CEO. Yeah. Whereas Greg Brockman is the president of OpenAI. So it almost sounded to me, the little I listened, that it's more of a kind of character, I don't want to say assassination, but character evaluation on both sides. So one, each side is trying to make the other side kind of make their character look either not trustworthy or he didn't really mean to keep it non-profit or of course he knew it should be profitable. So did you get that sense through the trial? Yeah, it kind of comes down to that because it's taking whoever's word for it, right? It's like one side is saying, hey, we promise to keep it non-profit, but the other side is saying that promise wasn't made. So it's kind of like evaluating what evidence there is. And with court cases like this, the lawyers are trying to disprove the credibility of the other side when they cross-examine, right? So they would say, oh, in this correspondence, is it true you said this? Well, what did you mean by that? And they're trying to make their stories misaligned with the testimony. And to the jury, that would kind of, if there's any misconceptions or the story doesn't line up, that could look bad for the jury. So that's another point to make that the jury is what really matters. So you can have all these, did you get the sense that they're trying, the lawyers are trying to keep the language kind of easy to understand so the jury can pick up on it? Yeah. Yeah. Yeah. Did you get that too? Yeah. It's supposed to be easy to follow, understand. Because you can bring all the theories, all the thing you want, but if it goes over their head, then they're not making the point. Yeah. And I noticed the lawyers would also ask, like when they would say AGI and words like that, so we know the words. Yeah. I almost forgot what it means, but yeah, we do know. The lawyer would ask the witness to explain what AGI is. So then I guess this is for everyone to understand. So I was thinking like, what really difference does it make if it's non-profit or profit? And it seems like what triggered Elon Musk to launch this lawsuit or to get him kind of over the edge with this was Microsoft investment. Was it 1 billion or 10 billion? Do you remember? I believe it was 10 billion. I'm not sure actually. Yeah. Anyway, either way, it's a lot of money. Yeah. Microsoft made this investment and I guess if it's a non-profit, they couldn't have, but this way they do have, I guess, more to say of development and everything gravitates towards a profit-making machine where I guess maybe some principles are not being cared. But honestly, it's not very obvious to me why being profitable, it's so much worse than non-profit. I think it comes down to, like you said, profit and maybe the way revenue or taxes could affect the owners because one of the biggest things during the case was during Greg Brockman's testimony. And the lawyer, Steven Molo, which is Elon Musk's lawyer, he was asking Greg Brockman, how much did he invest into OpenAI? And Brockman said zero. But he was able to get about a $30 billion ownership of the company. Whereas Elon Musk invested, I believe, invested like $38 million, but he has zero ownership. So that happened. And I think from my understanding, it's about how the money could transfer as well and how they could get funding. If it's non-profit, maybe the money can't flow too much to the owners. Yes, probably the motivation also of the product. You start maybe selling the product in a way that's more aggressive. And also, a big part of it seems to be the fact that Elon Musk, through the non-profit model, wants to keep it open source, which I guess it really means that anyone, all these tech people who are really smart, much smarter than we are, but they can look at the code and they can figure out how the decisions, like for example, Chad GPT, maybe you ask him a question, ask it a question, and then it gives you an answer. So they can study the code and understand how it came out to that conclusion to give that answer. But I guess you can't do that with OpenAI because the code is not public. And I think others probably, I don't think Entropic is, but maybe XAI is. I don't know if some are public or not, or open source, but I think that's another thing to look at. Did you remember hearing about the DOTA project? No. So DOTA stands for Defense of the Ancients. It's a video game or computer game. And so there was a milestone for OpenAI because their bot beat some players, professional video game players in that game with its AI. So then I think from there, I think after that, the discussion about open source was kind of fuzzy because if they release the code, the rival, which I believe was Google's DeepMind, because they were doing something as well, similar. So if they release it, then OpenAI would lose its competitive edge. It's kind of different than a non-profit's mission. Yes, exactly. What was your sense, maybe talking to people or overall about who's winning so far? Well, during the trial, when I was outside just video recording, several people came up to me, they're asking what's happening here. And when I told them about the case, they have interesting views. One guy was saying how he's totally against AI and he's like, oh, the media, we're also fueling it by being there and reporting on it. Yeah. Yeah, which was interesting. Yeah. But with the case I've seen online, after Greg Brockman's testimony, I think people started to say, there was a lot of comments saying that they, with that point about the $0 investment. Yeah. From there, I think people were pointing that out and they were criticizing Greg Brockman. But what I noticed also made a big difference is once the examination of one witness is over, then it's a cross-examination. So I think that's how the opinions will also move, because once you get cross-examined, I remember also with Greg Brockman, the other side, I guess, his attorney was asking him questions and they would ask him like, well, how did you get started? And he gave all this long history of him going to MIT or whatever and starting a company. So they want to make him look more human and like this great individual who worked hard to make it happen. So there's a lot of strategy into that. Right. Yeah. And through this trial, I learned that there's also, after the cross-examination, then there's a redirect, which is kind of like a rebuttal, which the original lawyer could ask, could kind of re-clarify a few things with the witness. Yeah. I learned a lot during this trial. Well, let me ask you about this because I thought that's pretty interesting. So this is according to a report from MIT Technology Review. Yeah. And according to them, during the direct examination, Elon Musk said, and we haven't verified this, but according to this report, Elon Musk said he talked to Larry Page, Google co-founder Larry Page. And when he asked Page, what happens if AI tries to wipe out humanity? The answer from Larry Page was, they will be fine as long as artificial intelligence survives. Maybe he was joking, but obviously Elon Musk took it serious enough to quote that during that trial. Again, according to this report. Elon Musk was very concerned after speaking to Page. Yeah. Did you hear any more about that conversation? From what I remember, I think after that, that's when he wanted to be a competitor to Google and come up with open AI for humanity sake. Yeah, that's pretty crazy. The counterpoint, some of those that are against Elon Musk, so during the trial, someone outside was like, so why is there a court case now after Elon Musk has all these companies and he's creating his own XAI company? Why is he suing open AI? What's your sense of why? It just comes back to this non-profit thing. But I guess XAI is also not non-profit, right? I believe it's for profit. It's for profit. Yeah, with Tesla and SpaceX. So I looked into it. Well, during the case, Elon Musk said, he was asked, so what's the difference between open AI, non-profit, and then your for-profit companies? Okay, so what did he say? He said, well, his companies started as a for-profit already. Yeah, whereas the others are charity to begin with. And Elon Musk started the lawsuit in 2024, actually, and it wasn't until now in April that the trial started. So yeah, this went back about two years ago. Almost two years, yeah. Well, so obviously, Elon Musk doesn't trust Sam Altman and open AI, the way they handle the company. And I guess he does have a point, in my opinion, about if you're all for profit, because what if you have DeepSeek or whatever, or some Chinese company that says, we'll give you this much money, or this big investment, and can we get in return the code, or can we do something? So it is a big deal, as far as that goes, trust. So what if the open source code is taken from the open AI anyways? What if the Chinese government takes it? Well, I guess the idea is, if the source is open, that everyone knows it, then it's kind of equal, the field is like equalized, right? So everyone knows the same information. So then I guess it's not a big deal. But if someone hangs on to some information, and it's secret. And then sell it, or sell it, right? Yeah, yeah. Because again, you don't know what's in there. So it could be a different way of analyzing things, a new technology. That's a good point. Yeah. So that's why it's questionable, I guess. And another thing I think we want to emphasize is open AI is the creator of chat GPT. Yeah, right. So before this case started, how would this impact chat GPT? Oh, if it didn't, if we didn't have the case? Yeah, if we didn't have the case, I guess you wouldn't. We just keep building. Yeah, yeah. So what what happens in your understanding, if Elon Musk wins, then then open AI would go back to nonprofit status and somehow limit the investments. And oh, yeah. And I think part of it is Sam Altman and Greg Brock will be fired or something. And there will be a new board or something like that. Yeah, Elon Musk wants those two to step down from positions. Yeah. And for open AI to revert back to a nonprofit as well. Would they still be at the company? That is another question. There clearly is a big mistrust there. Well, let me read another quote, though, because this article had one other quote that I thought it was interesting. Again, it's an Elon Musk quote, according to this article, says the worst case scenario is a terminator situation where AI kills us all. I keep wondering why Elon Musk keeps bringing this up. Does he know something we don't? Because obviously, we've seen Terminator. We know what AI can do, right, if it takes over. And there's all these examples where AI takes over and then doesn't listen to humans anymore. It develops its own intelligence and its own thinking or whatever. During the trial, a lawyer cited Elon Musk saying he said something along the lines of building a massive AI enabled robot army. But he clarified saying that that wasn't in a military sense at the time. I think that's for service or operations. But yeah, he did say he didn't want the Terminator situation. So also something that I thought was interesting was the judge reminded the jury about not listening, not reading other external sources outside the case. Because during the trial, yeah, I guess during the trial, even when they go home, they said, she's the judge, Yvonne Rogers said not to talk, talk to anyone about the case. Don't call anyone, text anyone about it, or even read any stuff online. Because they could, I guess she wants to just stick to the evidence that's heard in the actual case. So I think that's pretty common to other places, other trials I've been to. It's very common for the judge to say that. How realistic that is, I really think that's a different story. Because first of all, they can monitor that and can really enforce it. And people have a natural curiosity to... So they wouldn't come in, this is like weeks, right? How would people not use their phone, check social media? They have to be really diligent. Especially such a high impact, high visibility case. Yeah, and also about not being biased. Because at the beginning of the case, people were talking about how do you not be biased to Elon Musk, or against him, and even towards AI as well. Were you there during the jury selection process? I wasn't there. Was it the week, like a week before? It was actually on the Monday of the first week. So just, do you know how many people went through it? Like how many jury? I think there was, I think they went... 40, 50? Through 100? 100, aha. Yeah, and then decide on nine. On nine, okay. Yeah, nine members. Because the trial I went to, which the BioLab one, they went through 45 and they ended with 12. Oh, okay. But that was not as stringent. So that selection could be pretty grueling too, it takes a long time. Well, any questions for our audience? Well, it's definitely one question would be, your thoughts on who do you think is correct in this case? Is Elon Musk wanting to have OpenAI go back to a non-profit status and get rid of its current management? Or keep OpenAI the way it is, as a for-profit company and going the direction it's going in? Okay, so then before we end, I also remembered something during the case. Elon Musk's lawyer, before one of the days he asked, he told the judge that AI could basically, or humans could die because of AI. But then the judge said, this case isn't about AI safety, it's about the structure of the company, right? So then for our audience, is there a case, do you want to see a case about AI safety, kind of like a round two of this case? And do you see AI safety impacting your lives? All right, and that's a wrap. I'm David Lam, this is Steve Vispas, and we'll see you next time on SVFR.