San Francisco Frontiers - OpenAI 'stole a charity': Musk accusations open blockbuster AI trial

The legal clash across the bay from San Francisco is widely seen as a battle of egos pitting the world's richest person against a startup Musk once backed and now trails in the booming AI sector.

At the heart of the case is an accusation by Musk that Altman drove OpenAI to become an industry juggernaut seeking to dethrone the likes of Google, Apple and Microsoft as a big tech profit maker, this betraying its nonprofit mission.

Musk argues in his lawsuit that he was deceived about OpenAI's mission being altruistic.

"We're here today because the defendants in this case stole a charity," said Musk's attorney Steven Molo, the first to address the court ahead of lawyers from OpenAI and Microsoft.

The company is "no longer operating for the good of humanity as a whole," but as a "for-profit venture operating in the interests" of OpenAI and Microsoft, its biggest investor, Molo argued.

The feud dates back to 2015, when Altman convinced Musk to co-found OpenAI, promising a nonprofit lab whose technology "would belong to the world."

Musk invested at least $38 million, but the split was finalized in 2018, and the OpenAI Foundation created its commercial subsidiary a year later.

Microsoft then began investing and increased its commitment to $13 billion, a stake now valued at approximately $135 billion.

William Savitt, the lead attorney for OpenAI, retorted that the company had no choice but to open up to outside investors given the high costs of AI and that, in any case, the OpenAI nonprofit arm "remains in control of the organization."

Moreover, a bitter Musk, he said, "will do anything he can to attack OpenAI" out of regret at leaving a project that found phenomenal success after his departure.

OpenAI has become an AI superpower valued at $852 billion and is preparing for a high-profile IPO on the back of its ChatGPT chatbot, which took the world by storm in 2022.

But OpenAI's ability to keep raising the capital needed to operate is hamstrung by its convoluted governance structure -- in which a nonprofit board retains ultimate control over a for-profit arm.

This has long unnerved investors wary of backing a company whose mission explicitly subordinates profit to the broader benefit of humanity.

Musk eventually set up his own lab, xAI, which he merged into SpaceX in February. SpaceX itself is valued at $1.25 trillion, and its IPO, expected in June, could become the biggest in history.

- 'Scam Altman' -

Moments ahead of the opening statements, Musk and Altman, who both sat with their lawyers at the federal court in Oakland, were asked by Judge Yvonne Gonzalez Rogers to keep social media posts to a minimum during the course of the trial.

In a barrage of social media posts Monday amplified on the X platform he owns, Musk derisively called the OpenAI chief "Scam Altman."

Judge Gonzalez Rogers will decide by late May -- guided by the advisory jury's findings -- whether OpenAI broke a promise to Musk, or just smartly rode the technology to glory.

Along with calling for OpenAI to be forced to revert to a pure nonprofit, Musk's suit urges the ouster of co-founders Altman and Brockman, who is the startup's president.

Musk, who had sought as much as $134 billion in damages, has since renounced any personal benefit, pledging to redirect any award to the OpenAI nonprofit.

R.Baker--SFF