Musk v Altman: Much Ado About Nothing  🔗 **Source:** [Musk v Altman: Much Ado About Nothing](https://share.snipd.com/episode/f5cbef96-23d6-437c-bf4a-50fed6f605c0) ## Highlights - **Case Was More Personal Vendetta Than Legal Fight** - The trial's official issue (charitable trust conversion) differed from its real purpose, which was personal targeting of Sam Altman and distraction tactics. - Liz Lopatto observed shifting legal strategies and claims suggesting the suit aimed to punish Altman and kneecap OpenAI. Transcript: Liz Lopatto Are two things that we should distinguish. There was what the case was ostensibly about, and then there was what the case was actually about. And those are two entirely separate things. So ostensibly, the case was about the violation of a charitable trust, which was that Elon Musk had donated a bunch of money to OpenAI Foundation, and then they created a for-profit. He thinks that's a violation of his charitable trust. And also, the timing of that was right around what is known as the blip, when Sam Alton was briefly removed and brought back. Put a pin in that. It's going to be a board here. That's sort of what we're ostensibly there for. And because it was around the blip, Microsoft was accused of aiding and abetting. And Microsoft very quickly became my favorite part of the case. That's what we were theoretically doing. But in reality, there had been so many changing legal strategies around this. This case was filed, I think, two years ago in state court and then withdrawn and then put in federal court. And, you know, there's just been sort of a myriad of things that have shuffled around since then, including like a charge that got dropped right before we went to court. To me, I think that the main point of this was punishing Sam Holtman and maybe trying to kneecap OpenAI. And, you know, this is like a case where it's like the two worst people you know are fighting. So it's kind of hard to root for anyone. The most common response that I tended to get when I would talk about this to people or when I would post about it on social media was like, can they both go to jail? That's kind of the vibe. The courtroom was, it was a little bit of a zoo during Musk's testimony. We had one woman who got called down in front of the courtroom by the judge and chewed out because she had been taking photos in the courthouse. On the very last day, we had a guy who was ejected because he had been recording the proceedings in the courtroom. So there was like some, there were some shenanigans. And then every time we would leave the courthouse, there would be some kind of protest going on, usually behind the lawyers as they were trying to like give their like daily summary and Like spin what they had, what they had done in the courtroom. And then like parading behind them would be like a guy in a cyber truck, like holding like an Elon sucks. Perfect. So that was, that was what that was. ([Time 0:02:51](https://share.snipd.com/snip/9665ab6d-0049-4ce3-a289-ed1f9feebc2f)) - **Courtroom Felt Like A Zoo** - The courtroom atmosphere was chaotic with protests, visitors taking photos, and a man ejected for recording. - Every day outside the courthouse featured a different protester, including someone in a cybertruck holding an "Elon sucks" sign. Transcript: Liz Lopatto The courtroom was, it was a little bit of a zoo during Musk's testimony. We had one woman who got called down in front of the courtroom by the judge and chewed out because she had been taking photos in the courthouse. On the very last day, we had a guy who was ejected because he had been recording the proceedings in the courtroom. So there was like some, there were some shenanigans. And then every time we would leave the courthouse, there would be some kind of protest going on, usually behind the lawyers as they were trying to like give their like daily summary and Like spin what they had, what they had done in the courtroom. And then like parading behind them would be like a guy in a cyber truck, like holding like an Elon sucks. Perfect. So that was, that was what that was. ([Time 0:04:25](https://share.snipd.com/snip/7b60bc10-cffe-4429-9795-5ed60c3242ab)) - **Collateral Reputation Damage Hit Unexpected People** - Multiple key witnesses across the trial appeared untrustworthy, damaging reputations — especially Mira Murati who hadn't faced prior reputational harm. - Testimony showed Murati privately texted Altman during the "blip" despite public support. Transcript: Liz Lopatto Kind of think there's no floor about these things. One of the things that I will say is that, like, from my perspective, I also view Sam Altman as untrustworthy, which is one of the things that this trial was like really driving home as Like one of the points that, you know, Elon Musk's lawyers were making. And like, I agree. I also think everybody else in the trial was totally untrustworthy. It was like not just Sam Altman, it was all of them. And one of the things that I found myself thinking about was that I think the person who really got damaged the most was Mira Marati, who, at least as far as I know, didn't have a reputation As being somebody who was untrustworthy or conniving or whatever. And then in testimony from former OpenAI board members, we found out that she was one of the reasons that Sam Altman got fired and then was immediately texting Sam Altman like, oh no, Sam, it's very bad. It's very bad, Sam. You remember during this blip that Altman was fired for what was it as a pattern of being untrustworthy or something. Nilay Patel It was he was not consistently candid with the board, which could have meant anything. Liz Lopatto Anything. And like the thing that I remember, because I gossip with a bunch of journalists and we are ferocious gossips, is all of us were like, oh, he did something illegal. ([Time 0:05:45](https://share.snipd.com/snip/bb109b48-3cf6-4874-a273-c85bf1a7c52c)) - **AI Leadership Is An Insular Network** - The AI leadership network is tightly interwoven, creating echo chambers and shared mythology about AGI among a small set of insiders. - Liz notes this closeness appears to foster groupthink and immaturity in managing huge technical and financial stakes. Transcript: Liz Lopatto Off looking good. Like, I thought for a while that Helen Toner was maybe most reliable witness we had heard from. And then in the cross on the deposition, it was like, so tell us about your relationship with Anthropic. Nilay Patel And I was like, oh, that's actually the thing that struck me about this entire trial. Helen Toner being wrapped up in Anthropic is one thing, but the entire AI industry at the top is like 10 people who are wrapped up in each other emotionally, professionally. They're writing each other up sequence emails, particularly to Elon, just full of flattery and praise about how great everyone is. The idea that they're going to make AGI is taken for granted in some way. Like these are the leaders of a new religion in like a real way you can see it. And then they all lack any management instincts or emotional maturity to deal with the kinds of tasks they're putting in front of them or the stakes or the money. And you can just see it. Like it's in the trial. It's in the evidence that they're cracking under the pressure that they're putting one another under. And there's no outlet. In fact, the only outlet might've been Satya Nadella, who comes off as the coolest cucumber around because he's just like, I don't know, is this going to make money? Don't call me. Like, that's basically his whole vibe. Liz Lopatto Again, I loved Microsoft in this case. I'm not a Microsoft user, really. I'm familiar with their products, which, by the way, their opening statement was so good. It was just a list of things of Microsoft products you might have used at some length. Remember us? It was fantastic. They were just like, we're not sure why we're here, but you know us. We're Microsoft. You've used Windows, surely. Do you like Xbox? That's us. So that was great. There was really a sense in which the only adult in the room at any given time was somebody from Microsoft. We saw that over and over again, where Satya Nadella is like, don't text me. Don't leave a paper trail. His emails are not especially spicy. ([Time 0:09:01](https://share.snipd.com/snip/93811781-312e-4609-8f7c-08093819cc31)) - **Microsoft Came Off As The Grownup In Court** - Microsoft repeatedly came across as the pragmatic adult amid the chaos, with Satya Nadella avoiding drama and paperwork. - Courtroom moments played as punchlines where Microsoft witnesses had little to add after contentious testimony. Transcript: Liz Lopatto Again, I loved Microsoft in this case. I'm not a Microsoft user, really. I'm familiar with their products, which, by the way, their opening statement was so good. It was just a list of things of Microsoft products you might have used at some length. Remember us? It was fantastic. They were just like, we're not sure why we're here, but you know us. We're Microsoft. You've used Windows, surely. Do you like Xbox? That's us. So that was great. There was really a sense in which the only adult in the room at any given time was somebody from Microsoft. We saw that over and over again, where Satya Nadella is like, don't text me. Don't leave a paper trail. His emails are not especially spicy. I think the spiciest they got is something like him being like, well, we don't want to be IBM and have them be Microsoft. Nilay Patel This is open. He doesn't want to be the commodity provider of data center hardware and their software be the important thing, which is what happened to IBM and Microsoft. Liz Lopatto That's right. Which, by the way, totally understandable sentiment, I feel. Nilay Patel Yeah, especially from Microsoft. He's like, I know I know I know what's happening here. Liz Lopatto That was like the spiciest thing we got out of Microsoft. Like that was it. So these are people who, in addition to sort of having the management chops and like having the sense of like what you do and don't do, we're also just like a little bit less dramatic. And like over and over again, we'd have a witness and there would be some like really brutal and devastating cross from open AI. And then Microsoft would get up and be like, was Microsoft there? Satya Nadella there. Does anyone from Microsoft know anything about any of this? No further questions, your honor. ([Time 0:10:13](https://share.snipd.com/snip/4be085e9-abf9-4325-ae9c-14981257adaf)) - **Verdict Hinged On Timing Not Merits** - The jury resolved the case on statute of limitations grounds, finding Musk filed too late rather than deciding the substantive trust claims. - Evidence showed Musk had been repeatedly read in on the conversion and donations, undermining his timing claim. Transcript: Liz Lopatto Jury verdict was that Elon Musk filed the suit too late and the statute of limitations had run out. I'm going to be real with you. I think that had there not been a statute of limitations question, he still would have lost. This was a pretty weak case, but we're going to start with the statute of limitations stuff because that is like the most relevant. And then I will walk you through all the rest of it because we did do all of this in exhausting detail. And that was the last like month of my life. So one of the things that was part of Musk's case was that he claimed that he didn't think his press had been violated until the blip. And so for this reason, he was still within the statute of limitations. And the law, I believe, is that you need to file within three years. We saw a bunch of evidence that he had been read in repeatedly on the conversion to a for-profit, the various investment rounds. I found myself unexpectedly sympathetic to Sam Altman during this trial so congrats sam he kept trying to like get elon to like like him again you know there would be these emails where It was like hey like we're raising this round or he'd be like emailing people to see what kind of mood musk was in if it was a good time to talk to him because you know he just wanted to make Sure that elon knew what he was doing and like was it a good time that for them to chat? Was Elon in a good mood? Which, by the way, like if you have a person whose job it is to tell people whether you're in a good mood or not, I strongly feel that suggests that you maybe are difficult. Yeah. Nilay Patel How deep is today's K-hole? Let's find out before we ask for money. Liz Lopatto There was evidence of Musk being read in every single step of the way, knowing about the Microsoft investments, knowing about the fact that they were creating this for-profit. In fact, there was a bunch of email evidence that he thought that making OpenAI a nonprofit had been a mistake, that it should have been for-profit from the jump. So there's just like, there's a ton of evidence that separately from the timeline question suggests that OpenAI would have won this case, not least because like the charitable trust Thing, the definition of a charitable trust, and I'm going to mangle this slightly because I'm not a lawyer, but you know, you have to have like a specific purpose on your donations. And so you have to have established that this is a trust. And then the next thing you have to establish is that that trust was violated. Just looking at all of the donations, which we did in some depth, there were no strings attached that any of us saw. No one at all remembered there being any strings attached. Like one of the more devastating lines of testimony was that Siobhan Zillis was asked, like, were there strings attached to these donations? She was like, well, not that I recall. And then in the closing statement, OpenAI's lawyer is like, man, not even the mother of his children can corroborate his account. Okay. Nilay Patel That's brutal. Liz Lopatto So, you know, there were no strings attached. And then we had a financial analysis that showed that that money was gone very, very quickly, that they had been spending, because AI is expensive, they had spent it. ([Time 0:13:29](https://share.snipd.com/snip/6f289543-e06b-42cc-a83e-9a558825b00f)) - **Musk Was Informed About OpenAI's Plans** - Documentary evidence showed Musk had been aware and in many cases supportive of OpenAI's shift toward for‑profit structures long before the blip. - Emails revealed Musk thought nonprofit status early on was a mistake and knew about Microsoft investments. Transcript: Liz Lopatto There was evidence of Musk being read in every single step of the way, knowing about the Microsoft investments, knowing about the fact that they were creating this for-profit. In fact, there was a bunch of email evidence that he thought that making OpenAI a nonprofit had been a mistake, that it should have been for-profit from the jump. So there's just like, there's a ton of evidence that separately from the timeline question suggests that OpenAI would have won this case, not least because like the charitable trust Thing, the definition of a charitable trust, and I'm going to mangle this slightly because I'm not a lawyer, but you know, you have to have like a specific purpose on your donations. And so you have to have established that this is a trust. And then the next thing you have to establish is that that trust was violated. Just looking at all of the donations, which we did in some depth, there were no strings attached that any of us saw. No one at all remembered there being any strings attached. Like one of the more devastating lines of testimony was that Siobhan Zillis was asked, like, were there strings attached to these donations? She was like, well, not that I recall. And then in the closing statement, OpenAI's lawyer is like, man, not even the mother of his children can corroborate his account. Okay. Nilay Patel That's brutal. Liz Lopatto So, you know, there were no strings attached. And then we had a financial analysis that showed that that money was gone very, very quickly, that they had been spending, because AI is expensive, they had spent it. They had spent it in the way that it was meant to be spent. All the other money that happened afterwards had nothing to do with Elon Musk. ([Time 0:15:07](https://share.snipd.com/snip/df9fc257-4571-44d2-9550-b13c12671f54)) - **Donations Had No Enforceable Strings Attached** - Financial records indicated early donations were quickly spent on expensive AI development, with no identified donor-imposed strings. - OpenAI counsel highlighted witnesses' inability to recall any conditions attached to Musk's donations. Transcript: Liz Lopatto So there was that. One of the things that I'm just going to put an asterisk on here that I thought was interesting but didn't, I think, write about was that Musk had been paying the rent for OpenAI. They actually had to go back and ask him for money because Neuralink was in the building. And when they got accountants to try to get their books in order so that they could proceed, the accountants were like, oh yeah, you can't be supporting somebody else's for-profit business In this building. You need to get rent money from Neuralink. They need to pay you back. And so my suspicion is not that we went into this in any depth, but that Musk had been taking a write-off on all of those donations on this building and had been also taking that write-off On the space that Neuralink was using, which is why then that money had to be paid back to OpenAI. ([Time 0:16:44](https://share.snipd.com/snip/ac343683-c2b6-48db-8d98-1572210650ba)) - **Litigation Can Be Used As A Weapon By Billionaires** - Suing to financially bleed a target is a feasible strategy for ultra‑wealthy litigants; Musk appears willing to use prolonged litigation as leverage. - Liz compared this to Sheldon Adelson's tactic of bankrupting opponents via legal costs. Transcript: Liz Lopatto Think that was what was actually going on. I think it was also meant to distract OpenAI because they did have to pay this very expensive law firm to do some very expensive work to defend them. They didn't just defend the statute of limitations. They defended all of the subclaims and all of the other sorts of things as well, which is why there is so much in our stories, is that they were bringing forward as much as they could to defend Every single part of every possible claim because they had to. I think that making Sam Altman look bad, distracting Sam Altman, maybe removing resources as Altman approached an IPO, I think those were probably the primary goals. Musk would have been happy with a win. I think he certainly would have been thrilled to force OpenAI to give up a bunch of money, even if it went back to the OpenAI Foundation as he belatedly decided it should go. There are any of a number of things that I think he would have taken as icing on the cake. And, you know, he said that he's going to continue this through the appeals process. Nilay Patel Elon appeared at a Forbes conference and he said, I think this is a dangerous precedent to set. If someone can take a nonprofit and convert it to a for-profit that undermines all charitable giving in America. I don't think Elon understands how precedent works, but it seems regardless of that, he's going to keep tying OpenAI up in litigation for as long as he can. Oh, yeah. Liz Lopatto I mean, he said something very similar to that on the stand, by the way. He has some pet phrases he likes and dangerous precedent to set undermines all charitable giving in America are like on the list. I think he does intend to tie OpenAI up in litigation for as long as he possibly can, you know, bleeding them for cash, which is a strategy that we've seen other billionaires use, most Famously Sheldon Adelson, who went after a Las Vegas paper, if I remember correctly, not because like they had done anything wrong and they were in fact ruled not to have done anything Wrong, but because defending the case was so financially expensive that they nearly went under. ([Time 0:19:02](https://share.snipd.com/snip/dcccb452-50f0-4d85-b51b-da067d5aec5d)) - **Killing A Competitor Can Be A Strategic Move** - Destroying a competitor can create hiring and negotiating advantages even if you don't directly gain product leadership. - Liz explains knocking out OpenAI would free talent and create leverage with data centers and partners. Transcript: Liz Lopatto Killing a competitor is not necessarily not a competitive advantage, especially if you have to start over from scratch. Nilay Patel Let's say OpenAI is in first or second or third or something, or just running in a different direction on the track at this point. Who knows what they're doing? If you're in last, it doesn't matter. In some way, he's helped Anthropic and Google here. Liz Lopatto Think about this. Let's say Musk wins and OpenAI has to disgorge all this money, and that potentially just blows a hole in the side of the company. I can't rule out that Altman is enough of a deals guy that he could patch it up, but let's say he can't. OpenAI is at the center of a web of deals. They are huge deals with places like CoreWeave and Oracle and Microsoft. All of these companies, every company in the AI space is like one degree of Kevin Bacon away from open AI. Okay. And so if you knock that company out, not only do you have a bunch of talent that comes free and like needs a job now, which you can maybe hire, you also have created conditions where you Can negotiate really favorable terms in these now suddenly open data centers with companies that now suddenly have huge holes in their revenue. ([Time 0:23:15](https://share.snipd.com/snip/a9632bb9-97ec-4a15-a743-9f0cdb559ec6)) - **Heavy Spending Doesn't Guarantee A Good Model** - XAI's build (Grok) underperformed despite heavy investment and model distillation, suggesting building competitive AI is still hard. - Liz noted XAI was effectively restarting, leasing out data center capacity and admitting they hadn't run full training runs. Transcript: Liz Lopatto Would set it aside for now. We had all the fun of going through their emails. We had their ridiculous text messages. The biggest thing, I think, that was the takeaway from the trial that, like, matters is discovering that like grok sucks even though elon musk had distilled everybody's models which You know like to me that's that's shocking not that i am an expert in ai it's entirely possible that you can distill all these models and have your ai still suck but i think that that really Is a take-home point is that one of the consistent things that we were seeing in this trial is that the nerdiest of the nerds, Brockman and Ilya Skatsvar, were both like, he's not really Serious about AI. And I came away being like, yeah, he's not serious about AI. He doesn't know what he's doing. We have all of the things that you talked about with like they're starting over from scratch. They're leasing out their data center capacity. They're doing all of these things that suggest that whatever Musk did with whatever billions of dollars, because I think XAI was spending, the reporting was a billion dollars a month. They're starting over from scratch. There's nothing. And like this is even with cheating by distilling everybody's models. ([Time 0:25:45](https://share.snipd.com/snip/1e00f78f-4fa5-4fb9-8321-e904ce7ef7b5)) - **The Jackass Trophy Became Trial Evidence** - An amusing trial side story involved a "jackass" trophy given for calling out Musk on safety, which became an evidence dispute. - The trophy read something like "never stop being a jackass for safety" and was linked to Dario Amodei and Anthropic. Transcript: Liz Lopatto A recurring theme in the trial was Musk poaching open AI engineers. And of course, Andrea Kamprathie was one of them. He went from OpenAI to Tesla because OpenAI, when it was a foundation, was asked by Elon in a way that suggested it was not actually an ask, if you follow me, to come work on autopilot because They were having a hard time with autopilot at Tesla. And so several engineers, including Greg Bachman, went over and worked on autopilot while they were theoretically working for OpenAI. So if anybody was stealing resources from a charity, I kind of think it was Elon Musk. One of the people who permanently stayed was Karpathy. He shows up again and again, like this recruiting push that Musk made out of OpenAI while it was still a nonprofit, while he was still theoretically involved with it, while he was still Theoretically on the board and had like a fiduciary duty to the nonprofit, he was using it as a recruiting ground for Tesla. Nilay Patel It's very good. Well, Liz, I have a feeling we're going to keep you very busy with these characters in the year to come. You know, my prediction is that OpenAI does not end the year looking the same as it does now. That there will be yet more change at that company. Liz Lopatto I think that's right. The other cherry that I'd like to put on top of all of this, speaking of Anthropic, is that one of my personal favorite parts of this trial occurred while the jury was out of the room, and It was an evidence dispute about whether or not the jury could be shown a jackass trophy. And it was like, imagine a participation trophy that is just the back half of a donkey. And it said something like, you know, never stop being a jackass for safety, for AI safety. It was presented to an AI safety guy who, when Musk was on the way out at OpenAI and was doing a Q&A session, was like, hey, it sounds like you're really interested in speed over safety. Like, I don't think that's a good idea. And Musk called him a jackass. And so would you like to take a guess at who was one of the people involved in presenting that trophy? Nilay Patel Was it Koperhathy? Liz Lopatto It was Dario Amadei. Nilay Patel Amazing. Perfect. And that tracks with everything Anthropic has stood for, right? This is everyone's leaving to start a safer AI company. And Dario was like among the first. Perfect. Did you take the trophy with him? Liz Lopatto The lawyers had it. So I assume he's gotten it back. We published a photo, but it remained very entertained by this trophy. ([Time 0:29:42](https://share.snipd.com/snip/115c11c0-27df-4514-9717-5f995fbff5d4))