The billionaires are fighting, again. Elon Musk, the billionaire founder of Tesla,
SpaceX, PayPal, and numerous other companies is suing OpenAI, a company he helped found.
Today on Uninvested, I'm going to break down everything you need to know in 5 minutes.
On February 29th, Elon filed a lawsuit with the California Superior Court in San Francisco
against OpenAI and its CEO, Sam Alvin. Musk accuses the company he helped found of
abandoning its mission to develop artificial intelligence for the benefit of humanity,
instead prioritizing profits, particularly through its partnership with Microsoft.
The lawsuit centers around allegations of breach of contract and aims to compel OpenAI
to make its research and technology publicly available, preventing financial gains from
Microsoft or any individual from OpenAI's assets, including GPT-4.
And fun fact, Musk tweeted on Twitter, or exes it's now called, that he'll drop the lawsuit if
OpenAI renames itself as closed AI. This is not a joke, go look it up.
Musk's dissatisfaction over OpenAI's trajectory date back to 2017 when he attempted to take
control of OpenAI to convert it into a commercial entity in partnership with Tesla,
but faced resistance from alt-minute other founders. He asked that OpenAI merge with
Tesla so that it could be properly funded to continue its advancements with AI.
However, Musk then resigned from the board in 2018, setting a desire to focus on Tesla's own AI
projects. Legal experts have expressed skepticism about the strength of Musk's case, pointing out
challenges in proving breach of contract based on oral promises or emails that may not constitute
a formal contract. Musk's own AI venture, XAI, has been seen as a competitor to OpenAI,
offering a chat GPT rival named Grok. This legal battle underscores Musk's
ongoing concerns about the pace and direction of AI development, fearing that without proper
governance, AI could pose existential risk to humanity. OpenAI's response to the lawsuit,
as per internal memos and leaked emails, suggests that the claims may stem from Musk's regret about
his current non-involvement with the company. The company released numerous old emails between
founders, board members, and Elon. In one, he said that OpenAI had a 0%, not even 1% chance of being
successful and reaching AGI. AGI, artificial general intelligence, is the ultimate goal of AI,
where the AI is able to complete tasks and learn with no difference from a human. We are still
not there yet. This lawsuit is not just a legal battle, but a pivotal moment in the discourse on
AI's future, its governance, and overall business structure. For context, OpenAI began as a
non-profit entity but eventually converted to a for-profit entity 3 years later. They claimed
that this necessary conversion was so they could raise a lot of money. And I mean, a lot. They had
the goal of raising $1 billion in donations as a non-profit but only reached $135 million. But when
a technology like ChatGPT can be leveraged to make a profit, investment pours in. Microsoft alone
invested $13 billion this past year, and Musk claims this should be illegal to transfer from
a non-profit to a for-profit once you get a working technology. And I partially agree. Why
wouldn't every company start as a non-profit, get donations and grants to build their product
risk-free? Then as soon as the product works, they switch to a for-profit and generate $2 billion in
revenue per year, what OpenAI will generate this year. Now you can see why Musk claims that OpenAI's
incentives are to make money, not to better the world with AI, which can be very dangerous.
Musk has had many long-withstanding warnings about the risks of AI while also highlighting
complexities of aligning AI development with ethical standards and the public good. Is Musk,
with his lawsuit, standing as the last guardian of AI for public good? Or has he missed the
bone on how AI development needs to be funded in today's world? Maybe for-profit AI companies
are the only way to raise enough capital to continue advancements. It's a classic tale
about idealism versus pragmatism. Musk's venture, XAI, suggests he's not just a bystander,
but an active participant in shaping AI's future. He's even claimed to open-source XAI's grok to
spread the knowledge of AI. Meanwhile, OpenAI's commercial success valued at over $80 billion shows
a different path to achieving AI advancements. This lawsuit raises broader questions about the
future of AI. Should AI's immense potential be hardest within open-source communities? Or is the
path to innovation paved with commercial partnerships and proprietary technologies? While the billionaires
fight it out, the essence of this touches on how we as a society envision the future of AI. It's not
just about Musk versus OpenAI, it's about charting the course of one of the most transformative
technologies of our time. Stay tuned to Uninvested as we continue to follow this story. Until next
time, keep questioning, keep learning. This is a personal video. Any views or opinions represented
in this video are personal and do not represent those of people, institutions, or organizations
we may or may not be associated with in a professional or personal capacity. The views
expressed are for entertainment purposes only and not to be misinterpreted as actionable investment
advice.