The jury’s swift decision to dismiss Elon Musk’s lawsuit against OpenAI and the other founders of Microsoft confirmed what we saw in court. That means Musk’s case was a weak one, in part because he waited so long to file his case.
In last week’s closing arguments, OpenAI’s lawyers 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 their disbelief that anyone would disagree with Musk’s accusations.
The net effect was that after the verdict, some, including Mr. Musk himself, found it hard to believe that Mr. Musk had lost. In a later-deleted post, Musk called Judge Yvonne Gonzalez Rogers a “terrible activist Oakland judge,” announced plans to appeal, and declared, “For those following this case closely, there is no question that Altman and Brockman did indeed steal charity to line their own pockets.”
But Altman and Brockman weren’t the only ones to benefit from OpenAI’s nonprofit investment. Musk and his legal team tried to take Altman to court, but the proceedings revealed just as much about Musk.
One incident revealed in court showed Musk benefiting from OpenAI in a way that is uncomfortably familiar. Greg Brockman testified that in 2017, Musk called a team of OpenAI researchers to Tesla’s headquarters and asked them to help the Autopilot team for a few weeks. “It was clear that it wasn’t something we could say no to,” Brockman said.
Brockman said he brought in a team of top scientists, including Andrei Karpathy, Ilya Satskeva and Scott Gray, to consult with “depressed” Tesla employees. They helped come up with ideas for improving self-driving technology in vehicles, and Sutskever told the team that if they could find 10,000 images of difficult corner cases, they could fix the software. Mr. Musk once asked Mr. Brockman to recommend that the employee be fired, but Mr. Brockman refused.
Another person familiar with the episode confirmed Brockman’s account and said Tesla did not reimburse OpenAI for its employees’ time and effort. Musk’s family office, Exsession, did not respond to a request for comment.
At the heart of Mr. Musk’s case is that Mr. Altman, Mr. Brockman, and OpenAI committed a “charitable trust violation,” meaning that Mr. Musk donated money for a specific charitable purpose, and in return his co-founders used the money for another purpose. He also accused OpenAI of “unjust enrichment” through for-profit stock and other profits.
In the case where OpenAI scientists parachuted into Tesla, Musk’s philanthropic donations were intended to hire scientists focused on securing AGI’s profits. In return, he made them work for free at his commercial company.
Dorothy Rand, a professor at Columbia Law School and co-host of the Beyond Unprecedented podcast, told TechCrunch that the arrangement is not legal, adding, “It’s a bit extravagant for Musk to sue for breach of charitable trust when he appears to have been directing assets in a way that is inconsistent with his mission.”
While it is true that artificial intelligence was involved in self-driving research, Musk’s witnesses emphasized that Tesla’s self-driving project is very different from OpenAI’s research agenda. That’s partly because Karpathy left OpenAI for Tesla shortly after this incident. OpenAI’s lawyers explained that Musk left in violation of his obligation to recruit one of the lab’s leading researchers, where he co-chaired the board, to his company.
Another fact that undoubtedly influenced the jury was the amount of time Musk spent in 2017 acquiring sole control of a potential commercial affiliate of OpenAI. Musk deployed a good cop, bad cop tactic to convince his co-founders to give him full control of OpenAI’s commercial affiliates, offering them free Teslas and threatening to withhold donations.
His efforts put lawyers in a difficult position, where they faced the need to convince jurors that there was a big difference between what Musk had in mind and the for-profit business that was ultimately created. They suggested that “small annexes” of for-profit entities would be acceptable, but OpenAI’s witnesses indicated that nonprofits with large for-profit arms are common.
In fact, there is a very plausible counterfactual that Musk accepted one of the co-founders’ proposals to split the shares more evenly and is now one of OpenAI’s largest shareholders — not a controlling one. But during the trial, Musk’s associates testified several times that Musk refused to invest in businesses that he could control alone.
While it has been cited as a technicality that Musk’s claim failed because it was filed too late, the statute of limitations has substance behind it. People and businesses make important decisions and expend resources based on the understanding that what they are doing is acceptable. If someone like Mr. Musk waits too long to file a lawsuit, the cost of unraveling all these decisions could outweigh the fair compensation.
None of the jurors have said how they reached their verdict. However, he was asked to consider whether Musk should have known that OpenAI was expending resources outside of its mission or starting a for-profit affiliate company before August 5, 2021. The answer is obvious. That’s what Musk himself did.
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