One of the world’s most controversial and overexposed men is suing another man who is just as unlikable and just as inscrutable. They are both insanely rich.
It’s so tempting to look away.
Elon Musk’s lawsuit against Sam Altman involves former colleagues and friends turned bitter enemies. Now they would like to take each other down. It happens all the time. These guys just have more lawyers.
However, it would be a mistake to ignore this conflict. The nasty dispute between Mr. Musk and Mr. Altman, which went to court this week with opening statements on Tuesday in a federal courtroom in Oakland, California, is going to the heart of Silicon Valley, a place that has always cloaked itself in virtue.
Mr. Altman and Mr. Musk began working on what was supposed to be a different kind of tech lab in 2015. OpenAI was the Manhattan Project for Artificial Intelligence, a nonprofit that would act as a shield against the rapacious behavior of less benevolent outfits. The goal was to “move the dialogue toward the victory of humanity rather than any particular group or society,” according to a document in the case.
Initial funding was provided by Mr. Musk, the chief executive of Tesla. Mr. Altman was a leader and spokesperson for OpenAI. But Mr Musk says their interests quickly diverged when it became clear how much money was up for grabs. OpenAI turned into a profitable company last year. “A textbook story of altruism versus greed,” Mr. Musk declared in the opening salvo of the suit.
The fact that a person who calls himself an altruist here is likely to become the world’s first billionaire doesn’t necessarily make it false. In his lawsuit, filed in 2024, Mr. Musk said that Mr. Altman, OpenAI president Greg Brockman and others “unjustly enriched themselves” by developing OpenAI “to the tune of billions of dollars.”
OpenAI, valued at close to $1 trillion, had the inevitable answer: No, you are one who is stingy. The company argued that Mr. Musk left when he couldn’t take over the entire business.
“This case has always been about Elon generating more power and more money for what he wants,” OpenAI said in a statement.
One of the few things the magnates agree on is that their feud evokes the works of a certain Elizabethan playwright. Mr. Musk, 54, said in his suit that “Mr. Altman’s treachery and deceit are of Shakespearean proportions.” Mr. Altman, 41, reflected in a blog post this month that “there’s been so much Shakespearean drama going on between companies in our industry.”
If there is a Shakespearean play that can sum up this damaged friendship, it is “Julius Caesar.” Brutus wants to prevent Caesar from gaining too much power, or so he says. Caesar is quite surprised to be murdered by a supposed friend. “Et here, Brute?” crying. Brutus ends the play as dead as Caesar, but is mourned as “the noblest Roman of all”.
Mr. Musk should be so lucky to have such praise.
“For the Good of the World”
In the middle of the last decade, Mr. Altman was a Silicon Valley insider, running the top startup incubator Y Combinator. Ambitious and persuasive, he didn’t just want to finance companies. He was on a mission to save humanity, which – unknown to the masses – was at great risk.
“I think AI is probably most likely to lead to the end of the world,” Mr. Altman said in 2015. It was a fear he often expressed. Why not, he asked, create a bulwark against other AI companies “for the good of the world”?
Mr. Altman drew a picture of Mr. Musk who was even more worried about where AI was headed. “We summon a demon,” Mr. Musk once said.
There was an immediate problem. People everywhere work at nonprofits for modest wages. They sacrifice themselves for their ideals. Mr. Altman knew that wouldn’t fly in Silicon Valley. Engineers and scientists “will get a start-up-like reward if it works,” he promised.
The nonprofit was dead almost before it started. OpenAI is owned by its employees and investors, including Microsoft, Amazon, Nvidia and SoftBank, as well as the OpenAI Foundation. (Mr. Altman has no direct equity in OpenAI, but has other investments that make him a comfortably billionaire.) OpenAI plans to sell shares to the public in one of the richest stock offerings in history.
Silicon Valley is a great source of wealth in modern America. Nine of the 10 richest Americans are tech entrepreneurs, the only exception being Warren Buffett. People might be offended by OpenAI’s turnaround, but few could say they were shocked.
In addition to being the richest man in the world, his own AI venture, xAI, is now part of one of his other companies, SpaceX. SpaceX will soon sell shares to the public as a decidedly profitable operation.
No happy ending
Technology companies face relatively few constraints these days. Congress is generally passive. Federal regulators were paralyzed. The Trump administration is stocked with venture capitalists and others as receptive to technology and their money as President Trump is.
Opponents of the technology are left with civil lawsuits. Social media companies are facing an onslaught of cases. One of the first, in Los Angeles last month, found Meta and YouTube to blame for anxiety and depression in a young woman who was a frequent user.
“Now we just have trials, and they make everything better,” said Max Tegmark, co-founder of the Future of Life Institute, a nonprofit that works to reduce catastrophic technological risks. “Exams provide information not otherwise available.”
Exhibits in the Musk/Altman trial are examples of material that would otherwise likely never see the light of day. This includes emails between the two leaders as they tried to get OpenAI off the ground.
“Do you have any objections to me proactively increasing everyone’s compensation by 100-200k a year?” Mr. Altman wrote to Mr. Musk in 2015. “I think everyone is motivated by the mission here, but it would be a good signal to everyone that we will take care of them over time.”
Future of Life Institute gives OpenAI an overall mark A C plus for security, while xAI got a D. “AI is less regulated than sandwiches in America,” said Mr. Tegmark, who is also a professor of physics at the Massachusetts Institute of Technology. “You can’t open a sandwich shop without getting your kitchen inspected. But you can fire an AI girlfriend for 11-year-olds and that’s fine.” Defeating OpenAI may begin to change that, he said.
Some AI watchdogs have said they would like to see OpenAI brought to justice, as well as Meta and YouTube. But they would prefer almost any plaintiff to Mr. Musk.
“I don’t have long-term confidence in a system where we pass laws through private litigation,” said Sacha Haworth, executive director of the Tech Oversight Project, a Washington advocacy group. “I don’t want to rely on a billionaire with a grudge.
She stressed that if Mr. Musk wins, it will weaken or even destroy OpenAI and “open up a lot of market share that Elon Musk’s company can gobble up.”
And if OpenAI gets the lawsuit dismissed? “It would send a signal that it’s okay to start out as a not-for-profit organization that doesn’t threaten the public, and then cynically turn for-profit without any accountability,” she said.
Mrs. Haworth’s conclusion: “There is no happy ending here.”
(The New York Times sued OpenAI and Microsoft in 2023 for copyright infringement of news content related to AI systems. Both companies denied the claims.)
Some critics fear that in a worst-case scenario for OpenAI, its charitable arm would end. This, they say, would destroy a very large foundation that could have helped people. Mr. Musk says he will give any damages he receives to the foundation.
Others take a more benign view.
“The law doesn’t rely on you being a good person acting in the public interest,” said Shaoul Sussman, a former Federal Trade Commission official. “A lot of OpenAI’s dirty laundry will come out.”
In another environment, Mr. Musk’s push for OpenAI might have come up short, ending in a tip for regulators. But he has no interest in the government surveillance that has prompted investigations and enforcement of his companies during the Biden administration.
Instead, Mr. Musk’s case against OpenAI uses a legal doctrine called ultra viresmeaning “beyond authority”. It is true that a corporation is limited to the activities defined in its charter. This approach was widely used in the early 1800s when the federal government was small and weak and only a competitor could control your company.
Most corporations now have broad charters that allow them to pursue multiple goals. However, there is one exception: non-profit organizations.
“This is the first high-profile case that I know of that has been pursued under these statutes in 100 years,” Mr. Sussman said.
In a trial that will last several weeks, very old laws will meet very new technology. As Shakespeare said, what is past is prologue.
