What you need to know
- OpenAI lawyer William Savitt grilled Elon Musk about his commitment to a nonprofit and discussions about a for-profit subsidiary.
- Musk said he had concerns about the nonprofit being “stolen” in 2018.
- Musk said Microsoft’s $10 billion investment in the nonprofit was a tipping point and he lost trust in Sam Altman by late 2022.
- Musk said he “was a fool” for giving OpenAI and Altman the funding that was then used to create an $800 billion company.
- Jared Birchall, who manages Musk’s family office and is also an executive at xAI and Neuralink, will be next to testify.
Elon Musk continued his testimony on Wednesday in the high-profile trial in his lawsuit against OpenAI CEO Sam Altman taking place in federal court in Oakland, California.
Musk sued OpenAI, Altman and Greg Brockman, the company’s president, two years ago, alleging they reneged on their commitments to preserve the artificial intelligence lab’s nonprofit structure. Musk, who co-founded OpenAI in 2015, claims the roughly $38 million he contributed to the company was used for unauthorized commercial purposes that did not advance its charitable mission.
Steven Molo, Musk’s lawyer, kicked off the proceedings on Wednesday by asking Musk questions about his understanding of OpenAI’s corporate structure and his relationships with OpenAI executives.
After Molo concluded his questioning, OpenAI’s attorney, William Savitt, began his cross-examination. Savitt did not finish his questioning, which means Musk will return to the stand on Thursday.
Musk left OpenAI’s board in 2018 after a number of disagreements with Altman and Brockman about the company’s direction, including a failed effort to merge it with Tesla.
Following Musk’s departure, OpenAI established a for-profit subsidiary that allowed it to raise the capital it needed to develop its technology more easily.
During his testimony on Wednesday, Musk again expressed that he is not outright opposed to the idea of a for-profit subsidiary, as long as the for-profit is not the “tail wagging the dog.” He added that he was not concerned by a capped-profit structure, but he did take issue with an uncapped structure.
“They should not get rich off a nonprofit. That’s not right,” Musk said from the stand.
Musk said he “was a fool” for donating $38 million to OpenAI, which he said was used to turn it into an $800 billion company.
During his cross-examination, Musk clashed with Savitt on several occasions. He accused the attorney of lying and asking misleading questions. Some exchanges got heated, and both Musk and Savitt raised their voices during the proceedings.
“Your questions are not simple, they are designed to trick me, essentially,” Musk told OpenAI’s lawyer.
Savitt told Judge Yvonne Gonzalez Rogers that he expects to continue his cross-examination of Musk for roughly one more hour on Thursday. Once Musk’s testimony concludes, his attorneys will call their next witness, Jared Birchall, who manages Musk’s billions at his family office. Brockman is also expected to testify on Thursday.
CNBC’s reporters covered Wednesday’s proceedings from the courtroom, as well as from CNBC’s bureaus in San Francisco and Englewood Cliffs, New Jersey.
