(Bloomberg) — OpenAI’s Sam Altman testified that he was “extremely uncomfortable” with Elon Musk’s insistence that he have complete control over a proposed for-profit subsidiary of the startup back in 2017.
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Altman told jurors Tuesday that Musk said he only wanted control of the entity in its early days, but that the billionaire was unwilling to sign a contract to that effect, frustrating fellow co-founders of the artificial intelligence company.
“A particularly hair-raising moment was when my co-founders asked Mr. Musk, ‘If you have control, what happens when you die?’” Altman said. “He said something like, ‘I haven’t thought about it a ton, but maybe I should pass it to my children.’”
“I didn’t feel comfortable with that,” Altman added.
The OpenAI chief executive officer took the witness stand in the final days of the high-profile trial. Musk has accused Altman and company president Greg Brockman of seeking to enrich themselves by abandoning the nonprofit’s altruistic mission and converting it into a for-profit business company with billions of dollars in investments from Microsoft Corp.
Musk previously testified that he started losing confidence in Altman and Brockman during the 2017 negotiations about OpenAI’s future. He was OpenAI’s biggest financial backer at the time, and thought his equity in its for-profit venture should reflect that.
Musk testified that he gave OpenAI roughly $38 million in the form of quarterly donations and rent payments for its office space — far less than the $1 billion he initially pledged.
Altman told jurors on Tuesday that he contributed $3.75 million to the nonprofit when it first started, and then gave “a multiple of that” in equity interests he held to employees in its early days.
Altman has repeatedly said he doesn’t currently have a direct equity stake in OpenAI. He confirmed in court that he does hold an indirect interest in OpenAI through Y Combinator, which is a startup incubator he ran when he co-founded OpenAI.
Altman said he and the other co-founders devoted significant time and effort toward launching OpenAI, and he felt frustrated that those efforts were not reflected in Musk’s proposals for the equity split in the for-profit venture.
“It was totally true that Elon was proposing to put in a lot of money, and Elon had you know a lot of brand value,” Altman said. “But I really wanted to stand up for Greg and Ilya,” referring to OpenAI co-founder Ilya Sutskever, who went on to become its chief scientist for several years.
“One of the most special things about OpenAI has been we have incredible team spirit and teamwork,” Altman told jurors. “And I remember in these conversations, I felt that Elon just really deeply didn’t get that and wasn’t valuing it.”
Musk departed OpenAI’s board in 2018, and stopped paying rent on its office space in 2020. Altman said Musk’s departure affected OpenAI “up and down” and raised questions about its fundraising capabilities without him on board.
“There were questions about what this would mean for our funding and what would happen with Mr. Musk’s competitive effort,” Altman said. “Mr. Musk is a well-known figure and known to be fairly mercurial and people wondered if he would take a vengeance on us or something.”
Altman said he remains “grateful” to Musk for his contributions and guidance during the early days of OpenAI, acknowledging that he was a “critical contributor.”
“He was someone I respected hugely,” Altman said. “I also wished he would stop what he was doing here — which, in my opinion, was jealousy — as we got more and more successful, and trying to beat us down as he started a competitor.”
Musk’s attorney, Steven Molo, pivoted the questioning to Altman’s integrity — and whether he has a history of being “deceptive” in business dealings.
Musk’s team has devoted significant time to revisiting Altman’s brief ouster as CEO of OpenAI in 2023 with other witnesses, including former board members who testified that he was removed from his position due to a “pattern of behavior related to his honesty, candor and resistance to board oversight.”
“Are you completely trustworthy?” Molo asked Altman in his very first question on cross-examination.
“I believe so,” Altman replied.
Molo then asked if the jury should believe him.
“You’ve been called deceptive and a liar by people with whom you’ve done business, right?” Molo said.
“I have heard people say that,” Altman said.
Altman Versus Musk: How the Biggest Feud In Tech Landed in Court
The stakes at the trial are big for OpenAI and Altman. Musk is seeking tens of billions of dollars in damages, and the unwinding of the ChatGPT maker’s for-profit conversion that was completed in October. He’s also pushing for Altman and Brockman to be removed from their leadership roles.
OpenAI has argued that Musk’s lawsuit is primarily an attempt to undermine a top competitor to his own AI company, xAI.
Throughout the trial, witness testimony has repeatedly focused on the management styles and trustworthiness of Musk and Altman, with both coming under fire.
In video testimony, OpenAI’s one-time chief technology officer, Mira Murati, recalled Musk “creating chaos” among top executives at the company. She also said Altman “undermined” her and did not always tell the truth.
Sutskever said he was thinking about concerns with Altman’s leadership for about a year before he and other board members ousted Altman as CEO in 2023. Altman returned five days later after employees protested.
Altman’s testimony also caps off years of mounting animosity between two tech billionaires who bonded over a shared vision for AI development before falling out over the company’s direction.
Musk has been unsparing in his criticisms of Altman, attacking not just his leadership at the company but his character. Musk has called Altman a “liar” and a “swindler.”
After Musk made an unsolicited $97 billion offer to control OpenAI last year, Altman’s rhetoric grew less measured. The OpenAI CEO suggested Musk was simply trying to slow down a competitor and said he didn’t think Musk was “a happy person.” Altman added: “Probably his whole life is from a position of insecurity — I feel for the guy.”
(Updates with additional details from Sam Altman’s testimony)
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