Ep 221: What the Elon Musk vs. OpenAI lawsuit actually means

Episode Categories:

Elon Musk vs OpenAI - An In-depth Gridlock or Just a PR Stunt?

A lawsuit filed by Elon Musk against OpenAI has sparked a fiery debate in the AI community. The seismic allegations promulgate that OpenAI has drifted from its open mission to profit and is now a closed source for-profit company. At the crux of the dispute are concerns that OpenAI is potentially prioritizing profit over societal benefits.

The Founding Agreement: A Basis for Dispute

Elon Musk filed a lawsuit against OpenAI, expressing discontentment that the company’s operations have strayed from the nonprofit mission it set out with. A primary focal point of the suit is a "founding agreement" that, interestingly, wasn’t formalized into a contract. This ambiguity amplifies skepticism around OpenAI’s transformation, especially considering the organization's significant updates in its corporate structure from 2019 to 2023.

OpenAI’s Corporate Transformation

OpenAI originated as a 501c3 nonprofit in 2015 with a nobly altruistic vision of advancing digital intelligence for the public benefit. However, the organization's transition to a hybrid entity featuring for-profit subsidiaries under a nonprofit control presents a convoluted conundrum. Despite these advancements in structure, some critics question the organization's transparency and intentions.

Unprecedented Investments

OpenAI's significant revenue and myriad of partnerships brought the organization into new realms of operation. A leading tech giant, Microsoft, reportedly invested between $11 billion and $13 billion into OpenAI Global LLC, a non-nonprofit entity, indicative of OpenAI’s pivot towards a more profit-driven business structure.

The Musk Perspective

Musk's lawsuit centers on the allegation that OpenAI's decision to keep AGI (artificial general intelligence) development proprietary and for-profit represents a breach of its initial nonprofit status. His legal team is seeking damages for alleged breaches, demands for specific contractual obligations performance, and a jury trial.

Assessing the Lawsuit

Litigation experts project mixed opinions about the merit of this high-profile lawsuit. Some argue it lacks substance while others view it as a potential PR stunt, engineered to highlight personal ambitions and competition by Musk against other industry giants such as Google, Microsoft, and OpenAI. Regardless of opinions, this case is a clear indication of the growing competition and drastic transformations occurring within the AI industry.

Implications of the Lawsuit

Business owners and decision-makers should closely monitor this unfolding legal drama as its outcome might set precedence in the burgeoning AI industry's governance. Issues of legal jurisdiction, contract interpretation, corporate transformation, and nonprofit profit-driven activities are being interrogated and might markedly influence operational strategies in the near future.

Topics Covered in This Episode

1.  Elon Musk's Lawsuit Against OpenAI
2. Background and Changes in OpenAI
3. Implications of OpenAI's Shift in Focus
4. Reactions and Predictions on the Lawsuit


Podcast Transcript

Jordan Wilson [00:00:17]:
Elon Musk is suing OpenAI, accusing the company of abandoning its open mission and putting profit before the public. Does Elon Musk have a point, or is the lawsuit a joke, or is it maybe a combination of those two things? Alright. We're gonna be going over that today and more on everyday AI. What's going on, y'all? Welcome. Thanks for listening. Thanks for tuning in. This is everyday AI. If you're brand new here, we do this every single day, every weekday at least, and this show is for you.

Jordan Wilson [00:00:53]:
It's a daily livestream podcast and free daily newsletter helping everyday people like you and me not just learn what's going on in the world of AI, but how we can all actually leverage all of this, how we can make sense of what's going on in the generative AI world around us and take that to grow our companies and to grow our careers. So if you're listening on the podcast, thank you for tuning in. As always, make sure to check out the show notes. Some special things in there that you're not gonna wanna miss. But let's let's go ahead and, talk about, real quick about this, thing with with Elon Musk. I'm extremely interested, and if you are joining us live, I wanna hear from you. You know? So, thanks for joining us, to to some of our our live crew, Tara from from Nashville and Brian from Minnesota, and Jay, what's going on? Woozy. Other other Brian from from South Mississippi.

Jordan Wilson [00:01:46]:
I wanna hear from from you all. What do you make of Elon Musk suing OpenAI? Alright. So before we get into that, I just gotta let you know. You've gotta go to your everyday ai.com. Sign up for the free daily newsletter. We're gonna be recapping today's show, a lot that we can't even get to. Yeah. Even in longer show, there's there's a lot that we can't get to.

Jordan Wilson [00:02:04]:
As well as I tell people, it is like a free generative AI university on our website. More than 200 I think we're at, like, 220 episodes now. So you can go back and listen to every single podcast, watch every single livestream, read every single newsletter. No matter what you care about, we have it on our website. If you wanna learn about AI in sales or AI in entrepreneurship, AI in writing, it's all on our website categorized, waiting for you to to grow. Alright? So before we get into this this topic of Elon Musk, and I do wanna hear from our livestream audience, but let's go ahead and talk about what's going on in the world of AI news. Alright. So first, Wix is bringing AI websites to its users.

Jordan Wilson [00:02:45]:
Alright, so Wix's new AI website builder allows users to create web pages for free with the option to upgrade for advanced features like accepting payments. So prices for Wix premium plans raise for, range from $17 a month for the lite plan to a $159 for the business elite plan. So this new AI website builder uses models like DALL E and, OpenAI's ChatGPT for the image and text creation. So users can create a new website click, simply by clicking on the create with AI button, answering a few questions posed by the chatbot, and then boom, you get a website. Isn't it any good? I don't know. You know, I think these, vary, but the the AI does generate this website within seconds, and then it can be further, conventional, further customized in conventional ways. So, yeah, just because you use an AI, the the the generator from Wix doesn't mean you can't go in and, you know, change spellings or, you know, update images, etcetera. Alright.

Jordan Wilson [00:03:41]:
Our next piece of AI news is more responsible AI development on the way. So tech companies including OpenAI, Hugging Face, Salesforce, etcetera have signed an open letter emphasizing the need for responsible development and use of AI to maximize its benefits and mitigate potential risk to society. Interesting timing on this one, from OpenAI being one of the main leaders, you know, in this, letter right after this lawsuit from Elon Musk, which we're gonna get back to in a second. But, the development of AI has been a obviously, a hot topic of both excitement and concern in the tech industry, with leaders recognizing its potential for improving human life, but also acknowledging its potential dangers. So this letter from, Big Tech here, compares the impact of AI to other significant innovations throughout history, stressing the need for thoughtful decision making in order to ensure the greatest benefits. Alright, last but not least in AI news, claud 3 is here and anthropic says it's more powerful than gpt4. Alright. So AI startup, Anthropic, launched its claud 3 series of AI models featuring Opus as the most capable AI system on it on the market according to its own internal benchmarking.

Jordan Wilson [00:04:55]:
So this new lineup, from the Cloud 3 family includes Opus, which is the most powerful, then Sonnet, which is kind of the middle, model, and then, Haiku, which is geared towards, you know, all of these are kind of geared towards different tasks. But think it's kind of like, you know, good, better, best, right, if if you wanna say with opus at the top of the line. So the models have advanced reasoning and visual capabilities, but the company acknowledges biases and the difficulty in achieving perfect neutrality. So all these models do support image input, enhancing capabilities for tech recognition and images and complex data extraction. In its own internal testing, like I just talked about, cloud's premium or the top model, Opus, from cloud 3, surpassed both OpenAI's GPT 4 model and Gemini's Ultra model for common benchmarking that we talk about on the show a lot, MMLU benchmarking, so got the highest score. So I actually did 2 separate reviews of this already. So we'll put those in the newsletter. Did an accidental, 30 minute review and then a quick little 10 minute review.

Jordan Wilson [00:06:02]:
So, if you want our takes on it, completely different looks, make sure to check that out in the newsletter. Alright. A lot of AI news today, so let's just get straight back to the point. It is hot take Tuesday. Let's talk about this. And if you are joining me live, it's hot take. How how hot should I go? How hot should I go? Let me know. But, here's here's the thing y'all.

Jordan Wilson [00:06:24]:
I know so many of you so many of you, adore Elon Musk. Right? If if if you follow, AI, if you're a tech enthusiast, you probably really like what Elon Musk, is is doing, right, with between Tesla and, you know, x or Twitter, whatever you wanna call it. Grok, it's new chatbot. Right? So many great things that Elon Musk is doing. So try to take that out of it. Alright? And we're just gonna be looking today at this Elon Musk suing OpenAI. And let me know. Alright.

Jordan Wilson [00:06:54]:
Brian Brian says, couple couple flame emojis. I want it he wants it hot. So let me know, because I don't wanna offend people. I don't wanna offend people because I know people love Elon Musk. Right? I'm I'm not like that. You you know, I'm not following any one tech leader and saying, oh, this this person's great. So I wanna get my own lack of biases or lack of preferences out of the way. I I have no horse in this race.

Jordan Wilson [00:07:17]:
You know, it's not like I'm a a fanboy of of Elon Musk or, you know, really against him. But, you just gotta get that out

Jordan Wilson [00:07:24]:
of the way. Alright. So, hey, Justin says inferno. Alright. Brock, what's going on? Brock says, I'm

Jordan Wilson [00:07:33]:
the guy that asked Elon Musk in a Twitter audio room a week ago about Neuralink updates. Alright. Well, hey, let us know what those were. So, alright, here we go. Let's start with what's actually going on here and I'm gonna cut straight to the chase. Alright? So here's the overview of what's going on. So Elon Musk has filed a lawsuit against OpenAI and its CEO, Sam Altman, accusing them of prioritizing profits over the benefit of humanity. Alright.

Jordan Wilson [00:07:59]:
So this lawsuit claims that OpenAI, which is technically still a nonprofit, but it was once a much more, kind of nonprofit focused on developing AI for the benefit of humanity. So now Elon Musk in the lawsuit is alleging that OpenAI has now become a closed source for profit company and more or less a subsidiary of Microsoft. Alright. So Musk is also a founding board member of OpenAI. And, you know, according to almost all reports was a very, important piece of OpenAI getting off the ground. And Musk in the lawsuit alleges that the organization is now developing AGI, artificial general intelligence, for profit and kind of keeping it secret, rather than using it for the benefit of humanity. Alright, so that's that's the overview. That's the overview.

Jordan Wilson [00:08:49]:
Alright. Well, hey. Since since, Mike 4 g says he wants to see the flames, I'll just I'll just come out and say it. Alright? So 2 things can be true here with this lawsuit. Alright? So Elon Musk, he has valid points. Right? His overall sentiments and his overall thoughts, on this OpenAI lawsuit and saying how they, you know, are are no longer, you know, a non profit and going against its original mission and, you know, maybe keeping some, you know, AGI, you know, close to the vest in the, in the lawsuit talks about Q Star kind of, you know, what, this reported, breakthrough in artificial general intelligence from OpenAI. So that can be true. Right? That the the the basis of the lawsuit can be true.

Jordan Wilson [00:09:37]:
But it is also an absolute joke. This lawsuit is a joke. It is a, I think, nothing more than a PR stunt. Alright? And both of those things can be true, y'all. I'm gonna I'm gonna dive into it, right, and we're gonna look at it, kind of break down the lawsuit and and go over some of the history of OpenAI, but both of those things can be true. And I don't think anyone's talking about this. People are either saying, oh, you know, Elon's gonna burn, you know, OpenAI and, you know, shut them down. No.

Jordan Wilson [00:10:07]:
That's that's, like, if if that's what you think, I I I don't think you have a a firm understanding of what's going on here. We're gonna be going over that. But he can make points. But you can also see that this is an absolute joke, joke of a lawsuit. I am not a I am not a a legal scholar. I'm not a lawyer. I did not talk to my lawyer before going on this show and being like, hey, what do you think of this? No. I've read plenty of legal opinions on this already.

Jordan Wilson [00:10:34]:
People are already know, giving their take in. You you don't have to even read that to understand that this lawsuit is an absolute joke. It is meritless. Alright? From a legal perspective, alright, again, I wanted to start by saying this, just give you give you what we're gonna be talking about. Both things can be true. Elon Musk can be making good points, but it

Jordan Wilson [00:10:55]:
can also be completely without merit. Alright? So,

Jordan Wilson [00:11:01]:
hey, I agree with with, with what Jonathan said here. Right? This is at the heart of it. So they have to, talking about OpenAI, they have to, at some point, make money. Yes. Absolutely. Alright. So let's get some facts y'all. Alright.

Jordan Wilson [00:11:15]:
I got I got a little bit of the hot take out of the way. I'm probably gonna, you know, muster up another flame emoji or 2, but let's let's get the timeline here. Alright. So this is very important. Alright. And if you are listening on the podcast, I have some slides up on the screen, but, I don't think you need to come back and watch the video. We're gonna be going over these slides mostly. Alright.

Jordan Wilson [00:11:36]:
So, in 2015, OpenAI was founded with a founding agreement. That said, OpenAI was meant to be public. Alright? Pretty simple. And then in 2018, I mean we're skipping a lot here, there's a lot going on, but we're going high level. Alright. In 2018, Musk leave his post as the cofounder, of OpenAI and reportedly donated more than a 100,000,000, or maybe it was 50,000,000. So originally, you know, hey, it's OpenAI was a nonprofit. You know, Musk is a cofounder and early kind of quote unquote investor, but when you're investing in a nonprofit, and we're gonna get to this in a minute here, right, it it was a 501c3.

Jordan Wilson [00:12:21]:
So when you are giving money to a 501c3, from a legal perspective, you are doing it without expecting anything in return, especially a financial gain. Alright. So early on, when Musk was investing, this money, OpenAI was a non profit, and that was all. They had no other, corporate structure which we're gonna get to, here in a minute. Alright. But here's why I have a couple different numbers. Did he put in a $100,000,000? Did he put in 50,000,000? Well, even his own story has changed over the years. So originally, he said a 100,000,000, and then in a later interview, he said, oh, it's 50,000,000.

Jordan Wilson [00:12:57]:
But, you know, recent reports said it might have been like 15,000,000. You always gotta follow the money. The money is usually the heart of where these disagreements lie. Right? This isn't some altruistic, you know, lawsuit by Elon Musk. Absolutely not. If you think that that's what this is about. If you think the lawsuit is about, oh, OpenAI is putting, private over the public. No.

Jordan Wilson [00:13:22]:
That's not what this is about. This is about money. It's always about money. It's always about money. But, alright, so 2015 OpenAI founding agreement. Alright. Said OpenAI was meant to be for

Jordan Wilson [00:13:33]:
the good of humanity in public. Right. Also, 2018, Elon Musk leaves, but after reportedly investing a

Jordan Wilson [00:13:42]:
lot of money. Alright, and then from 2019 to 2023, OpenAI changed its corporate operating structure a lot. And y'all, this is a super confusing, super confusing operating structure. Right? For a company that is doing the amount of revenue that OpenAI is doing right now. But, technically, the the parent arm is a nonprofit. Right? So it's extremely confusing, and we're gonna be going over that. But, I mean, you have to keep in mind, OpenAI already has annualized revenue of, you know, nearly $2,000,000,000 was the last report from, like, 2 months ago. So, yes, they're making money.

Jordan Wilson [00:14:27]:
Can a nonprofit make money? Absolutely. Should it be doing it in the way that maybe Open Eye was originally set up? I don't know, But more on that in a second. Alright. So there's there's our, timeline in terms of Elon Musk's involvement. So early on, founding member. Alright. Then a couple years later, leaves his post after, you know, reportedly donating a lot of money. And then we have a lot of changes in the legal structure.

Jordan Wilson [00:14:50]:
And then as of, you know, this week, 2024, he's suing OpenAI.

Now let's look at this corporate structure. Alright. So this one is a little tricky, alright, and we're gonna go quick. So essentially, when OpenAI was founded in 2015, it was a 501c3 nonprofit, and it still technically is. And again, Musk was a cofounder. Alright.

Jordan Wilson [00:16:40]:
And then, like I said, from 2019 to 2023, there's a lot of updates in the corporate structure. Alright? I'm gonna try to read some of these, and this is not all of them. Alright? I do not have time, literally, even in a long podcast to read this, but this is mainly what's happening here. Alright? So openai added a separate LLC and a holding company as a capped profit subsidiary. So, it controls a separate LLC, so the nonprofit OpenAI, the 501c3, controls a separate LLC called OpenAI GP LLC, and that's the capped profit subsidiary. Alright? Then there's another l p which is called open a I l p. Also, underneath it is a holding company that it's the majority owner in. Alright.

Jordan Wilson [00:17:24]:
So there's already multiple layers, and then you also have underneath that as well OpenAI Global LLC, and that is reportedly the entity that Microsoft has invested at least between $11,013,000,000,000 into that entity. Alright. So, essentially, to oversimplify this, and again, I'm not a lawyer. I'm not a, you know, corporate, you know, corporate finance, you know, hierarchy structure, you know, but here's here's what's happening. You still have OpenAI at its core is a 501c3 nonprofit. They essentially set up all these kind of companies underneath, that have different mission, different missions, different governance as well. And a lot of these are for profit, right? So they are for profit LLCs, and essentially OpenAI, has, ownership, or different ownership control of these different entities that they technically own under the umbrella of the open AI, which is the 501c3. Extremely confusing.

Jordan Wilson [00:18:24]:
I don't know of any other nonprofit that is set up to this extent. Are there other nonprofits that have multiple subsidiaries? Absolutely. Are there ones with this kind of complexity as OpenAI has? I don't know. You know? But it is, it is extremely it is extremely, difficult to understand unless you are a, you know, corporate structure, attorney. But what's what's important to see here is let's look at current date. Microsoft has invested somewhere between 11,000,000,000 and, $13,000,000,000. The difference is they reportedly made this investment into OpenAI Global LLC, which is not a nonprofit. Originally, when Elon Musk was investing money anywhere between 15,000,000 and a $100,000,000, it was when OpenAI was a didn't have all these other, subsidiary, subsidiaries.

Jordan Wilson [00:19:16]:
It was just a 501c3 nonprofit. And when you give or quote, unquote invest, donate, whatever you wanna say, when you give money to something that is just a nonprofit, a 501c3, you don't have any ownership stake, and you also, in theory, do not or should not expect anything in return.

Jordan Wilson [00:19:37]:
Alright? So there's a

Jordan Wilson [00:19:38]:
little bit on the corporate structure. Now yeah. Hey, Brian. Thanks for this comment. So Brian's saying non profit orgs can have a social enterprise arm, so that isn't at all surprising. Absolutely, yes. And it's it's very actually, I I won't say normal. You know, I I worked, in a nonprofit for 10 years, so I am familiar with that.

Jordan Wilson [00:19:57]:
A lot of nonprofits have social enterprise arms, you know, and they might have one kind of, you know, for profit subsidiary. Very rarely do you have a handful of, separate LLCs or LPs underneath a 501c3 nonprofit. It it's it's pretty rare. But, yes, a a lot of times nonprofits do have the social enterprise arm to help drive profit or drive revenue. Alright, so now let's get to the heart. Let's get to the heart of Elon Musk's arguments. Alright, and again, get your questions in if you do have questions. I'm going to try to get them as I see them or or

Jordan Wilson [00:20:28]:
take some at the end. Alright, so here's what is at the heart

Jordan Wilson [00:20:32]:
of Elon Musk's arguments. So number 1, it gets to the founding agreement. Alright, so, the lawyers claim that Musk, Altman, and Brockman agreed to form a nonprofit AI lab that would develop AGI, artificial general intelligence, for the benefit of humanity, not for a for profit company, and that would be open sourced balancing, balancing only safety requirements or safety considerations. So they also cite, this certificate of incorporation and other written communications as evidence of this agreement. Alright. So long story short, the lawyers, lawyers are saying, hey, they they made this as a nonprofit, that if they built AGI, artificial general intelligence, that's essentially when, you know, these, AI systems become smarter than the average human at general tasks, and they don't necessarily need humans anymore. Right? And they become smarter than us. That's kind of where we're close to.

Jordan Wilson [00:21:27]:
Right? So, Elon Musk makes a lot of arguments here about he says, hey, with GPT 4, we're already kind of seeing that. You know, the the the lawyers reference Q star, which is this, kind of, you know, reported, you know, or alleged, you know, project or entity that OpenAI has. This this QStar, it was never public, you know, just a lot of internal reporting, but saying that, this q star, whether that is, you know, the current code name of gpt 5, whatever you wanna say, but, you know, Elon Musk and lawyers are saying that, hey, OpenAI has AGI already. And, hey, when we, you know, started in this founding agreement, that that that isn't what this was about. Alright. So that's argument number 1. Argument argument number 2, so the breach of con breach of founding agreements. Alright.

Jordan Wilson [00:22:18]:
So the lawyers allege so Musk Musk and his team alleged that Altman, Brockman, and OpenAI violated the founding agreement by keeping g p d four's design secret, licensing exclusively to Microsoft, and allowing Microsoft to exert undue influence and control over OpenAI's nonprofit activities and AGI development. So also, what, like I just mentioned there, it alleges that we already have AGI in, GPT 4 and Qstar, but OpenAI is keeping it closed and for profit. So, Musk and legal team also accuse, OpenAI of staging a board coup to reinstate Altman as CEO after, he was fired for lack of candor reportedly. Alright. So that's number 2. Number 3, the other kind of big main arguments in this lawsuit. And again, I I haven't read the whole, lawsuit. It's fairly long.

Jordan Wilson [00:23:10]:
I've I've read through a good chunk of of it, but we will be linking it in the newsletter if you wanna read it for yourself. Alright. So the third third main point here. Alright. So the damages and remedies sought by Musk. Alright. So the lawyers assert that Musk has suffered damages as a result of the breaches of the founding agreement and that he is entitled to specific performance of the conch of of the contractual obligations as well as declaratory and injunctive release accounting and attorney fees. They also demand a jury trial.

Jordan Wilson [00:23:38]:
Alright. So essentially they're saying, hey, OpenAI is only at this point because of Elon Musk and he suffered damages. That means money. Right? So they're saying, hey. OpenAI was a nonprofit and early on was not, focused on generating revenue, and now they are running as a for profit company, and they are generating a lot of revenue, and our client, Elon Musk, deserves a big piece of that pie. Alright. And here's why that is more or less a joke. Well, alright.

Jordan Wilson [00:24:09]:
After after some free stuff from our partners. Look at this, guys. We're we're getting we're getting these inbuilt, partner partner ads here for you. Alright. So as a reminder, we're gonna get back to why this is a joke here in a second. But, it is the last day. Today is the last day that you can sign up for Taplyo and win a free year of Taplyo. Alright? So, they sponsored our newsletter, last week, but I wanted to remind you it is the last day.

Jordan Wilson [00:24:34]:
So if you use my code to sign up every day, so everyday, all one word, you can get a month of Tapio for a dollar. Alright. Then, I'll put this in the newsletter. You can just reach out, send me a screenshot that you signed up using my code, and we're gonna be giving away a free year. Yes, a free year of Taplyo, a tool that I absolutely love to grow my presence on LinkedIn. So make sure you check that out in the show notes. Alright. And then, hey, we're gonna be at the NVIDIA San Jose conference.

Jordan Wilson [00:25:08]:
So NVIDIA has their g t c a I conference coming up March 18th to March 21st. So we're partnering with NVIDIA. Yes. That NVIDIA, the 3rd largest company in the United States by market cap, and we are also giving away an NVIDIA GeForce GPU. Yesterday, I showed it up here on the show. So, if if you wanna use as an example that new, NVIDIA local model chat with RTX, right, which I am very excited to use. I can't even use it right now because I don't have one of these chips. But, if you have a windows machine, now you can put this chip in there and run this new NVIDIA model that I think, early reviews are coming in, that it's extremely powerful.

Jordan Wilson [00:25:48]:
So, for that, all you gotta do is check out the show notes or the newsletter. We're gonna have, all you gotta do is just even register for the free virtual conference. Alright? Fill out a little form on our website. I think only a hand handful of people did it yesterday. So if you do it now, you've got a great chance. Alright? So make sure you check that out in the newsletter as well. And also sign up for the free virtual conference. Right? NVIDIA is really powering the future of generative AI.

Jordan Wilson [00:26:12]:
You can sign up for the free conference and see what all these executives, not just from NVIDIA, but from other big companies like Meta, you know, companies from all over the spectrum, are gonna be at this conference, and you can watch it all live for free

Jordan Wilson [00:26:24]:
and enter to win a GPU. Alright. Now back to

Jordan Wilson [00:26:28]:
the good stuff. Here's why this lawsuit is more or less a joke. Alright. So Elon is doing this for personal reasons, y'all. Here's the thing, and and hey, who someone someone said a lot of flame emojis. Alright? So here's here's here's some of you, delivering on the flame emojis a little a little later. This is not a real lawsuit. No one is taking this seriously.

Jordan Wilson [00:26:54]:
If you've read this or have read about it or, you know, are a lawyer again, I'm not a lawyer. I have no legal background, but no one is taking this lawsuit seriously. Alright? This is more about Elon's personal ambitions and competing products. Alright? So so here's here's what we have to get to. It gets down to 2 things. This donation, right, this money that Elon Musk initially, quote, unquote invested into a nonprofit. Right? You can't invest money into a nonprofit. When you give money to a 501c3, you shouldn't have an expectation of getting anything out of it.

Jordan Wilson [00:27:35]:
Alright? And, hey, guess what else? And we're gonna get to that. There was no contract.

Jordan Wilson [00:27:41]:
There was literally no signed agreement. Alright? So this is now after the fact.

Jordan Wilson [00:27:50]:
You know, there's there's probably probably should have been, some some better paperwork, going on back in 2015 on, hey, what would happen if this nonprofit, if this 501c3 nonprofit becomes one of the biggest companies in the world? Right? What happens if this company is doing 1,000,000,000 in revenue and is no longer operating really like a nonprofit? Alright. So you gotta go back to the money. This is what this is ultimately about, and competition. Y'all, people aren't talking about this. But look what Elon Musk has been doing the last week. Actually, longer than the last week, but he's really ramped it up the last week or 2. He is attacking any competitor. So, right, so obviously, Elon Musk owns, the company formerly called Twitter.

Jordan Wilson [00:28:38]:
I still call it Twitter or Axe. Right? And what does Axe have? Its own, chat g b t competitor in Grok, right, which I told everyone all along was gonna amount to absolutely nothing. Right? And I think that Elon Musk is probably seeing the writing on the wall that Grok is not bringing in all this extra revenue. I'm sure he might tell you otherwise. But it's about the competition. So Elon Musk, this is what he's he's been doing. Google recently. Elon Musk has been attacking Google.

Jordan Wilson [00:29:09]:
Right? We saw with the the AI images coming out of the imagine, you know, kind of platform inside Google Gemini, Musk attacked them. Right? Musk was attacking Google search results, you know, saying that they were, you know, biased or or woke. Right? So that's what Elon Musk is is throwing out there all the time. So he is literally attacking any large company, Google, Microsoft, OpenAI, he is doing this relentlessly. Right? So he you know, if if you're asking me, Elon Musk wants these, you know, Google's, Gemini to shut down for a couple of days or a week. He wants there to be some sort of injunction with OpenAI and Microsoft because he stands to benefit. Alright? He stands to benefit. So we're not just talking about, Axe or, Grok, you know, Elon Musk, Chat gbt, competitor.

Jordan Wilson [00:30:00]:
Right? But he has axe AI. He's starting an entire AI company, and he wants to be in this space. Right? And then look what else. You have the Tesla bot. Right? Tesla has their Tesla bot, the Optimus, which is, you know, one of the top 3 competitors in the space. Guess what else? One of the biggest competitors in that space is Figur. Guess who the biggest investors in Figur are? Microsoft and OpenAI. They're 2 of the biggest investors.

Jordan Wilson [00:30:31]:
Right? So is this lawsuit real? I don't think so. There's literally no contract. There's no contract, and and we're gonna get to that. We're gonna dive into the specifics here. Right? There is zero contract. This is about money, and it is about competition. Right? And by dragging down the competition and, you know, filing, lawsuits, this is not the first lawsuit Elon Musk has filed, But by filing all these lawsuits, he hopes to slow down the progress or he hopes, right, that somehow the there will be some pause in development. Right? Or or or by attacking, you know, Google and and other companies that are, you know, building Gen AI products.

Jordan Wilson [00:31:11]:
He hopes that this is just a way to say, hey, look at look at Grok, or hey, look at, Tesla, Optimus. Right? Don't look at these other competitors. We didn't talk about Bezos. Right? Bezos is a big investor, in Figur as well. So essentially, all of his, you know, kind of, these friends, you know, that used to, you know, used to be friends and now they're foes. Right? So he is building he's building a a narrative. It is it is us. It is x.

Jordan Wilson [00:31:39]:
It is Twitter. It is grok. It is Tesla Optimus against everyone else. And I'm gonna be suing everyone else, and and I'm gonna be using my platform, which is fine. He can do this. Right? But I'm gonna be using my platform on on x to just, you know, just burn all these other companies down and to say how they're doing these illegal things, I'm gonna be launching lawsuits, but it is meritless. This lawsuit is meritless. Alright.

Jordan Wilson [00:31:59]:
So let's let's break this down even a little bit more. Number 1. So here we go. Yeah. Now we're getting straight opinion mode. Alright. So, this is Elon's main arguments debunked going back to those original arguments. So, like I said, there is not a contract.

Jordan Wilson [00:32:17]:
Alright. There is not a contract. So Musk is not on the articles of incorporation. The lawsuit even talks about this. Right? Guess what's not in the lawsuit. So in any lawsuit, you always submit exhibits. Right? Guess what's not in there as an exhibit? Any contract. There's not an articles of incorporation.

Jordan Wilson [00:32:38]:
So the lawsuit talks about a quote unquote founding agreement. That was just kind of like an unofficial agreement. It was not a formal contract, right? So even the the the wording that they use is that it was memorialized. Right? So that's that's lawyer speak. Right? That's lawyer speak. If you don't submit a contract in an exhibit for a lawsuit against multiple $1,000,000,000 companies, that probably means you don't got the receipts. Right? You don't got the receipts. There was no, contract submitted.

Jordan Wilson [00:33:17]:
There was no agreement submitted in the exhibit, in the lawsuits, because they're saying it was memorialized. Essentially, what that means is, oh, between emails and conversations and, you know, it was just known. It was just known. Right? No. His his name is not. Elon Musk's name is not on a contract. You know? He he is not on the articles of incorporation. You know? So if you don't have the receipts, you don't have a contract.

Jordan Wilson [00:33:48]:
And that's where, you know, we could go apart and pick this lawsuit piece by piece. But number 1, there's no receipt. There's no contract. It is not in the lawsuit. Right? Who knows? Maybe maybe there is some receipt that's going to come later. But as of now, his lawyers are just talking about this agreement was memorialized, which means, yeah. People talked about it. There's some emails back and forth.

Jordan Wilson [00:34:10]:
You know, maybe there's nothing officially signed, but, you know, it it it was assumed. Right? It's it's on it's on a website. It's on an email. Well, there's no contract. No contract. Alright? 2nd big point. And you know what? We technically don't even need to go past that because if you don't have the receipt, none of the rest matters. Alright? If you don't have a first level, it doesn't matter if you build up to the 30th floor, the whole thing crumbles.

Jordan Wilson [00:34:34]:
So this whole thing crumbles off the bat. Don't even need to go into up points, but we're still gonna do it. Alright. So the second one, that they're kind of tearing apart is the whole concept that open AI benefiting the public. Alright? But guess what? Even in the contract or even in the, kind of original incorporation, which Musk is not listed on, that's up for interpretation. The language there is intentionally super vague. So benefiting the public, that can mean anything. Because guess what? Can a can a for profit, multibillion dollar company that keeps AGI closed source, can it still benefit the public? Yeah.

Jordan Wilson [00:35:15]:
It can. It doesn't say how it will specifically benefit the public or when. When you put a vague statement out like that, like for the benefit of the public, right, to build AGI open, for benefit of the public, you could say that they're technically doing it right now. Right? Can you, agree with what Musk is saying? Yeah. Of course. Can you agree with this statement that a for profit $1,000,000,000 company can keep AGI somewhat closed source and still, develop it and release it to benefit the public, even if it's for profit? Yeah. Right? I'm paying $20 a month. That GBD benefits me.

Jordan Wilson [00:35:52]:
Right? You know, it never said. And even in the original agreement, it never said we're gonna remain a nonprofit forever, and and and we're gonna hold, kumbaya sessions and, you know, get all the humans together and, you know, get their opinion. No. Even nonprofits are companies. They are businesses. They have to make money. So the whole concept of benefiting the public, that is just the world's vaguest, statement. Alright.

Jordan Wilson [00:36:19]:
The other one, which we're gonna pick apart, is there was a word in there that said when applicable to benefit the public and to release certain details when applicable. Right? Guess what? This is also up to OpenAI's interpretation. Alright. To say when applicable, it doesn't mean that it needs to, oh, you know, be by a certain year. They can just say, hey, when applicable to OpenAI means that, hey. We can benefit the public, quote, unquote, in the year 2030. And we're gonna do that by selling it to the highest bidder if they want to. Right? Which is what Musk is ultimately alleging.

Jordan Wilson [00:36:56]:
They he said, well, hey. Here we go. For profit company is just becoming, an arm of, you you know, big tech. Right? And this is against the, know, the founding principles of what open AI was originally for. Okay. Well, companies can change, companies can pivot. Right? And that's why when you have, even in the founding agreements, which Musk is not a part of contractually, right, that's why you have this general language. Because companies, their their mission changes.

Jordan Wilson [00:37:23]:
Profit makes you pivot. And it's it's not a bad thing. Right? Is it completely different? Would would I be upset if I if I, you know, donated between 10,000,000 to a $100,000,000? Yeah. I probably would be. But guess what? I would have made sure that my name was on a contract. Right? I would have made sure that even in that or in that original funding agreement that you specifically lay out, hey. If this 501c3 becomes, you know, starts to, develop future LLC's underneath and essentially becomes a for profit company operating under a nonprofit umbrella, how are you gonna invest 10,000,000, 50,000,000, a $100,000,000 and not see that in the future? Right? Like, if you see the potential and you're investing tens of 1,000,000 of dollars or $100,000,000 like Elon Musk is, why would you not get it in a contract? Why would you not make sure your name is on it? Why would you not play out the different scenarios that says, hey. If OpenAI happens to, you know, open up separate, LLCs, separate companies, this is what happens with this investment.

Jordan Wilson [00:38:25]:
Does it convert to equity? Maybe. You know?

Jordan Wilson [00:38:28]:
Again, I'm not a lawyer. But this thing, this argument is as flimsy as a wet paper towel in the wind. It holds no weight. It is a joke. It is PR. But, again, we're gonna wrap up here, y'all. We're gonna wrap up here by saying it can be both things. Right? Elon Musk in this lawsuit can both make very relevant statements.

Jordan Wilson [00:38:57]:
He can make things that we agree with. Right?

Jordan Wilson [00:39:00]:
Again, I'm not I'm not trying to side one way or the other. I'm I'm looking at the facts. I'm looking at the receipts, as I always do. Where are the receipts? Well, here's both things can be true. You can agree with the overall sentiment of what Elon Musk is saying. Hey, this company, OpenAI, started as a nonprofit with a very altruistic mission. Right? So I I donated money to them as a nonprofit, and now look, now they are essentially a for profit subsidiary of Microsoft, You are not on their on their, you know, original documents, you know, contractually. You have zero say.

Jordan Wilson [00:39:42]:
It can be a nonprofit today and, still a nonprofit with 24 profits underneath it tomorrow, doing whatever they want. Selling AGI to the highest bidder. They can keep it close. Right? I think just because people have the name, people because it's OpenAI and because it did originally start much more as a nonprofit versus a for profit company, people think, oh, okay. Well, that's not fair. No. That's not how nonprofits work. Many nonprofits actually, are huge revenue generating machines.

Jordan Wilson [00:40:14]:
Alright? So you have to look. Yes. Elon Musk's points can be true, but, also, this lawsuit, you can look at it as a joke. You can agree with the points. Let's say the lawsuit is nothing more than a PR stunt. It is to say, look. All this money, I deserve this money, and, hey, you all are bad. You know? Microsoft is bad.

Jordan Wilson [00:40:36]:
OpenAI is bad, ChatGPT is bad, you're developing AGI, that's bad, but oh, look at me. Look at look at Grok, you know. Look at look at our our Tesla optimists. Right? So, to me, all this is, it is about the money, it is a PR, it is not an actual, real lawsuit. It's not. Is there gonna be a a jury trial?

Jordan Wilson [00:40:58]:
I don't think so. How is

Jordan Wilson [00:41:00]:
this gonna get how is this gonna play out? I don't know. Again, I'm not a lawyer. This thing doesn't have teeth. It doesn't take a a a trained lawyer to see this thing does not have teeth. There is no receipts. Elon's name

Jordan Wilson [00:41:12]:
is not on the original founding agreement. There's no written contract. Sorry, y'all. Doesn't.

Jordan Wilson [00:41:21]:
So, yes, Tanya brings up a good point. Yeah. Taxes, you know, I'm not sure of their tax structure. I'm sure that, you know, they have great lawyers that, you know, as most corporations here in the US try to pay, as little taxes as possible. I I honestly don't know, Tanya, what, their their taxation structure is because they do have these, you know, for profit entities, that are not nonprofits, but they're sheltered, quote unquote, or they are umbrellaed under, a 501c3. Here we go. Alright. Cecilia said the problem with these meritless lawsuits is that they raise issues with the with that, prompt government oversees the Department of Justice, SEC investigations.

Jordan Wilson [00:42:01]:
Yeah. So who knows who knows what this actually

Jordan Wilson [00:42:04]:
what this actually entails? Alright. And then, Tanya is

Jordan Wilson [00:42:09]:
saying, don't we want competition to ultimately ultimately create products? Yes. I think this is exactly what OpenAI

Jordan Wilson [00:42:14]:
has done. Right?

Jordan Wilson [00:42:17]:
Hey. OpenAI was years ahead of everyone else. If they went forward with this very altruistic nonprofit 501c3 mentality that we're not gonna be, you know, partner with tech giants and we're not gonna be generating 1,000,000,000 of dollars, I don't think we would be where we're at today. Right? It was largely due to the popularity of the GPT technology that you saw Microsoft invest 1,000,000,000 of dollars. They didn't do this in 2015. Right? They did it over the last couple of years. Right? You wouldn't have, I don't think. I don't think you would have something like Google Gemini.

Jordan Wilson [00:42:51]:
I don't think you would have, access grok. I don't think you would have these things. So even by OpenAI shifting its focus, which it is free to do, and operating more like a for profit $1,000,000,000 company, I think it leads to healthy competition, it leads to where we're at today. And, hey, where we're at today is wrapping up this show. I hope this was helpful. If so, please consider sharing this. Right? People are always like, oh, Jordan. I love listening to the show, or I love, you know, being on the live stream.

Jordan Wilson [00:43:19]:
How can I help? Click that repost button. You know, some of these shows, we spend many hours researching, producing. It would help if you just shared this with your friends, repost this, tag someone that that needs to hear it, or if you might leave us a review on Apple or Spotify, that would be great. And more importantly, go to your everydayai.com. Sign up for the free daily newsletter. We're gonna have even more. We're gonna have some some more screenshots of of this, you know, this, quote, unquote, founding agreement. We're gonna, you know, be breaking down the lawsuit in even more depth.

Jordan Wilson [00:43:50]:
So please make sure to go to your everyday ai.com. Join us for that, and we'll also see you tomorrow to talk about why the dispersion of AI jobs across the US is actually good news and and what it means. We're gonna be talking about what it means. Alright. So thanks for joining us. We'll see you tomorrow and every day for more everyday AI. Thanks, y'all.

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