Tech
Elon Musk said Sam Altman “stole” a non-profit — but the trial showed he had similar aims
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 declared “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, which he deducted from his taxes, were used to hire scientists at a charity focused on securing the benefits of AGI. Then, he had those scientists 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.
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Tech
Planned Amazon data center could become the biggest climate polluter in the U.S.
As part of a planned data center in Pecos County, Texas, Amazon is investing in an on-site power plant that could become the largest source of climate pollution in the United States, according to The New York Times.
The NYT says the plant would burn natural gas and is permitted to release 33 million tons of carbon dioxide per year — more than any other power plant in the U.S.
In a statement, an Amazon spokesperson confirmed that the data center will “be powered by new on-site generation that won’t raise electricity costs for Texas families.” (Data centers face growing political opposition for a number of reasons, including their effect on electricity costs.)
AI has already had a significant impact on Amazon’s carbon emissions, which it reported were up 16% last year — the wrong direction for a company that pledged to eliminate its carbon emissions by 2040. And that could get worse as Amazon and tech companies back the development of huge natural gas plants to support their power-hungry data centers.
The Amazon spokesperson said, “The world looks different now than when we co-founded the climate pledge,” while also claiming, “Our commitment hasn’t changed.”
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Tech
OpenAI acquires presentation startup NextSlide
NextSlide recently announced that it’s joining OpenAI, with the presentation startup’s team members now working on ChatGPT.
The NextSlide website currently displays a note from founder Ahmed Beshry describing the startup’s product as one “that could turn prompts, notes, documents, or research into a polished, editable presentation.”
The ultimate goal, Beshry said, was “to make visual communication more accessible and help more people express their ideas clearly.” So by joining OpenAI, the team will “continue pursuing that same mission: building AI products that help people create, communicate, and turn their ideas into meaningful work.”
The financial terms of the deal were not disclosed. In a note on LinkedIn, Beshry said the announcement is coming “a few months late,” as the acquisition took place “earlier this year.”
Beshry was previously a co-founder at Caper AI, a smart cart/cashier-less checkout startup acquired by Instacart in 2021.
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Tech
X replaces ‘misaligned’ revenue sharing program with Original Content Rewards
X, the social media platform now owned by Elon Musk’s SpaceX, is shaking up how it pays influencers and creators.
In announcing the change, the company said it will be winding down its existing Revenue Sharing program and replacing it with something called Original Content Rewards. X will stop accepting new Revenue Sharing participants, while existing participants will continue earning money through September 7.
Then, starting on September 8, they’ll be able to apply for the new program. Participants will still need to subscribe to one of X’s Premium tiers, and there will be qualifying thresholds for follower count (500 verified followers) and impressions (500,000 Home Timeline impressions from verified users in 90 days), but it sounds like the big change is the emphasis on originality.
What counts as original content? X said it can include original reporting and analysis, photos and videos created by the poster, or memes and graphics they’ve designed themselves. Commentary also counts, but “if your content regularly incorporates material created by others, you’ll need to contribute meaningful original value for it to qualify under our original content guidelines.”
The company also included examples of posts that won’t count as original, such as those just copied over from another account, downloaded from one account and re-uploaded to your own, or reposting content “without meaningful transformation.”
This announcement follows repeated attempts by X to reform the Revenue Sharing program, for example reducing payments to aggregators and “clickbait” accounts in April. But these efforts have also prompted complaints from popular accounts profiting from the current system; Musk even reversed some of those changes (giving a creator’s local audience more weight when calculating payouts) after a backlash.
In a post about the new changes, X’s Allegra Jacchia wrote that the existing program “had reached a point where its incentives were misaligned.”
“Creators should be focused on bringing net new content to the platform instead of maximizing payouts,” she said. “We could have kept adding more rules and exceptions, but ultimately the better decision was to start fresh and build a program designed from day one to reward originality.”
Jacchia added that X be “continue refining the program, improving our models, and raising the bar over time.”
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