“By the end of this week, you and Sam will be the most hated men in America.”
The jury’s speedy decision to reject Elon Musk’s lawsuit against the other founders of OpenAI and Microsoft confirmed what we saw in the courtroom: Musk’s case was a weak one, in part because he waited so long to file it.
Watching the closing arguments last week, OpenAI’s attorneys detailed point-by-point how the law was on their client’s side, while the plaintiffs team focused on Sam Altman’s apparent lack of credibility and expressed disbelief that anyone would disagree with Musk’s accusations.
The final effect was that, after the verdict, some found it hard to believe Musk had lost — including the man himself. In a post he later deleted, Musk called Judge Yvonne Gonzalez Rogers a “terrible activist Oakland judge,” then announced his plans to appeal, declaring “there is no question to anyone following the case in detail that Altman & Brockman did in fact enrich themselves by stealing a charity.” But Altman and Brockman weren’t the only figures who benefitted from OpenAI’s non-profit investments. As much as Musk and his legal team tried to make the trial about Altman, the proceedings revealed just as much about Musk himself.
One incident that came out in court showed Musk benefiting from OpenAI in an uncomfortably familiar way. Greg Brockman testified that in 2017, Musk asked him to bring a team of OpenAI researchers down to Tesla’s headquarters to help with the autopilot team for a few weeks. “It was pretty clear that was not something we could say no to,” Brockman said.
Brockman described taking a team of leading scientists, including Andrej Karpathy, Ilya Sutskever, and Scott Grey, to consult with the “demoralized” Tesla workers. They helped come up with ideas to improve the vehicle’s self-driving technology, with Sutskever telling the team that if they could find 10,000 images of a tricky corner case, they would be able to fix their software. Musk even asked Brockman to recommend employees to fire, which he declined to do.
Another person familiar with the episode confirmed Brockman’s account, and said Tesla did not reimburse OpenAI for the time and effort of its employees. Musk’s family office, Excession, didn’t reply to a request for comment.
The heart of Musk’s case is that Altman, Brockman and OpenAI committed a “breach of charitable trust” — that Musk donated funds for a specific charitable purpose, and his cofounders instead used them for something else. He also accuses them of “unjust enrichment” due stock and other benefits from OpenAI’s for-profit.
In the case of the OpenAI scientists parachuting into Tesla, Musk’s charitable donations were intended to hire scientists focused on securing the benefits of AGI. Instead, he had them work for free at his for-profit company.
Dorothy Lund, a Columbia Law School professor and the co-host of the Beyond Unprecedented podcast , told TechCrunch that this arrangement wouldn’t be legal, calling it “a bit rich for Musk to be suing for breach of a charitable trust, when he appears to have been redirecting assets in a way that was inconsistent with that mission.” It’s true that the self-driving work involved artificial intelligence, but witnesses for Musk emphasized that Tesla’s self-driving project was very different from OpenAI’s research agenda. That’s in part because Karpathy left OpenAI for Tesla shortly after this incident. OpenAI’s attorneys portrayed the departure as Musk violating his duty to the lab, where he was co-chair of the board, by recruiting one of its key researchers to his own company.
The other fact that no doubt influenced the jury was the amount of time Musk spent trying to gain sole control of a potential OpenAI for-profit affiliate in 2017. Musk deployed good cop, bad cop tactics in an attempt to convince his cofounders to let him have total control of OpenAI’s for-profit affiliate — giving them free Teslas, and threatening to withhold his donations.
His efforts put his attorneys in a tricky spot, facing a need to convince the jury there was a significant difference between what Musk envisioned, and the for-profit that was ultimately created. They suggested a “small adjunct” for-profit would be permissible, though OpenAI’s witnesses showed non-profits with large commercial arms are common.
Indeed, there’s a very plausible counter-factual where Musk took one of the offers his cofounders made to split their equity more evenly, and finds himself today as one of OpenAI’s largest shareholders — just not the controlling one. But several times during the trial, Musk’s associates testified that he refuses to invest in any business he could have sole control over.
The failure of Musk’s claims because he filed them too late has been cited as a technicality, but the statute of limitations has substance behind it: People and businesses make important decisions and spend resources based on their understanding that what they are doing is permissible. If someone like Musk waits too long to sue, then the cost of unravelling all those decisions can outweigh a just reimbursement.
No members of the jury have spoken about how they arrived at their verdict. However, they were asked to consider if, before Aug. 5, 2021, Musk should have known that OpenAI was spending resources outside its mission or launching for-profit affiliate. The answer to that is clear: Musk himself was doing those things.
Topics AI , Elon Musk , OpenAI , sam altman , Tesla When you purchase through links in our articles, we may earn a small commission . This doesn’t affect our editorial independence.
Tim Fernholz Senior Reporter Tim Fernholz is a journalist who writes about technology, finance and public policy. He has closely covered the rise of the private space industry and is the author of Rocket Billionaires: Elon Musk, Jeff Bezos and the New Space Race.
Formerly, he was a senior reporter at Quartz, the global business news site, for more than a decade, and began his career as a political reporter in Washington, D.C.
You can contact or verify outreach from Tim by emailing tim.fernholz@techcrunch.com or via an encrypted message to tim_fernholz.21 on Signal.
View Bio May 27 Athens, Greece StrictlyVC Athens is up next. Hear unfiltered insights straight from Europe’s tech leaders and connect with the people shaping what’s ahead. Lock in your spot before it’s gone.
REGISTER NOW Most Popular Elon Musk has lost his lawsuit against Sam Altman and OpenAI Tim Fernholz Users turn to jailbreaking their older Kindles as Amazon ends support Lauren Forristal OpenAI launches ChatGPT for personal finance, will let you connect bank accounts Ivan Mehta US orders travelers on Air Force One to throw away gifts, pins, and burner phones after China trip Lorenzo Franceschi-Bicchierai OpenAI is reportedly preparing legal action against Apple; it wouldn’t be the first partner to feel burned Connie Loizos How to turn off Instagram’s new Instants feature and retract photos you accidentally shared Aisha Malik Musk’s xAI is running nearly 50 gas turbines unchecked at its Mississippi data center Tim De Chant
