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#18: Explaining the Elon Musk Vs. Open AI Lawsuit and the reasons behind it

#18: Latest edition of One More Thing in AI Newsletter.

Edition #18: One More Thing in AI

Date: 17-Mar-2024

Hello reader,

It is never a dull moment in the world of AI. There has been a lot of buzz about the lawsuit filed against Open AI by Elon Musk.

In this mini edition, we dig into the emails released by Open AI to figure out what is happening and why.


Renjit Philip

Elon's Bitter Billionaire Battle 🤑🚨

Elon Vs. Open AI

Elon Vs. Open AI

2015: Founds OpenAI to make beneficial AI for humanity 🤖 2017: Wants to turn it into $$ printer, be CEO 💰 OpenAI says no, he rage quits 😡

2024: Sues them for going corporate after they build ChatGPT 🧠

Real aim? Hype his rival AI biz 🌊

While his lawsuit is 🗑, experts think he's winning the PR war against OpenAI's restrained boss Altman. Ex-heroes turned epic frenemies! 🔥

That is the fun version for X/Twitter. Let us dive into the chronological sequence of events:

In 2015, Elon Musk co-founded OpenAI with Sam Altman, Reid Hoffman, and others. Their stated mission was to ensure that artificial general intelligence (AGI) would benefit humanity. Musk suggested a $1 billion funding commitment for the non-profit OpenAI.

By early 2017, OpenAI realized that the immense computing resources needed to achieve AGI would require billions of dollars per year in funding. This was far more than anticipated.

In late 2017, OpenAI and Musk discussed transitioning to a for-profit model to raise the required capital. Musk wanted majority control and to be CEO or merge OpenAI into Tesla, seeing Tesla as the best way to raise AGI-level funding. However, OpenAI did not want any single individual like Musk to have absolute control. Also, it does sound a bit funny that he wanted to subsume OpenAI into Tesla. Telsa's self-driving algorithms are essentially comprised of advanced multimodal AI models, so this made sense for Musk but perhaps not for Open AI.

During these failed-for-profit discussions in late 2017, Musk temporarily withheld funding from OpenAI. The disagreement seems to stem from OpenAI's desire for more autonomy, while Musk saw Tesla as the ideal "cash cow" to fund AGI development under his oversight.

By late February 2018, the rift between Musk's vision and OpenAI's led Musk to leave the organization. He stated that OpenAI had zero probability of relevance compared to DeepMind/Google without vastly more resources and a strategy change.

In December 2018, Musk reinforced his view to OpenAI that "even raising several hundred million won't be enough," and they needed "billions per year immediately or forget it [achieving AGI]."

With the parting of ways, Musk appears to have grown increasingly bitter toward OpenAI's trajectory and success with models like ChatGPT. PR experts suggest his 2024 lawsuit is partly motivated by jealousy over OpenAI's advancements after he left. Other commentators from the “All In Podcast” suggest that the corporate structure of Open AI is suspect, with a non-profit entity owning a for-profit entity that is funded by Microsoft to a large extent. They suggest that US Tax authorities would want to examine this structure to prevent profiteering from a non-profit organization.

The lawsuit alleges OpenAI breached its founding mission by operating as a for-profit, which Musk had resisted during the 2017 for-profit deliberations. However, OpenAI claims to have email evidence that Musk had supported and even pushed them toward a for-profit model.

Experts argue that while Musk's lawsuit is likely frivolous legally, he has dominated the public narrative and put pressure on OpenAI. Some see Musk's real aim as undermining OpenAI to boost his new AI company, Xai, which is portrayed as a mission-driven alternative.

Altman and OpenAI have remained relatively restrained in their public responses, except for the email release. Experts are divided on whether this civil approach is more damaging to Musk or makes OpenAI appear too passive against Musk's pugnaciousness.

So, in essence, the rift stems from diverging visions in 2017-2018 over OpenAI's for-profit transition and structure. Musk appears to have taken this personally, culminating in his attack years later as he started a competing AI venture.

That is it for this edition of the Newsletter. If you subscribe to our email edition, you can read this Newsletter before non-subscribers, and it will stay in your mailbox for future reference. Subscription has its value!

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