Elon Musk Urges OpenAI to Secure $1 Billion Funding, Views Tesla as Early Cash Generator

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OpenAI CEO Sam Altman speaks at the World Economic Forum in Davos, Switzerland, on Jan. 18, 2024. © Provided by CNBC

Key Takeaways:

OpenAI issued a public response on Tuesday to a lawsuit initiated by co-founder Elon Musk, highlighting what it perceives as inconsistency on the part of Musk, who was an early supporter and investor in the company.

In its response, OpenAI shared old emails from Musk, in which the Tesla and SpaceX CEO advocated for the startup to secure significant funding, suggesting a target of at least $1 billion. Additionally, Musk agreed that OpenAI should gradually become “less open” over time and refrain from sharing its scientific advancements publicly.

These reproduced messages present a contrasting viewpoint to the one Musk presented last week when he filed the lawsuit against OpenAI, CEO Sam Altman, and President Greg Brockman, alleging breach of contract and unfair competition.

Musk’s legal team asserted that OpenAI’s GPT-4 AI model’s inner workings are shrouded in secrecy, accessible only to OpenAI and, allegedly, Microsoft. They argued that this secrecy is driven by commercial motives rather than concerns for safety. In response, OpenAI stated its intention to move to dismiss all of Musk’s claims.

In November, Musk criticized OpenAI during a talk at The New York Times’ DealBook conference, asserting that the organization had strayed from its original mission. He suggested renaming it “super closed source for maximum profit AI,” characterizing its transformation from an “open source foundation” to a for-profit corporation with closed-source practices.

Musk’s emails from December 2018, reproduced by OpenAI in their response to the lawsuit, suggest a different perspective than what he presented in the legal action. In these emails, Musk appeared to discourage a lean approach to fundraising, asserting that OpenAI had a minimal chance of competing with Google’s DeepMind without a substantial increase in resources and execution.

He expressed skepticism about OpenAI’s potential to rival DeepMind without a significant infusion of funds, stating that even raising several hundred million dollars would not be sufficient and that the company would require billions per year immediately to have any chance of success.

Despite his earlier involvement with OpenAI, Musk now heads several ventures, including Tesla, SpaceX, and Neuralink, positioning himself as a competitor to OpenAI with his xAI venture.

Before departing OpenAI, Musk reportedly sought majority equity, initial board control, and the CEO position within the company. OpenAI also revealed that Musk had expressed interest in becoming CEO in 2017 during a period of structural changes within the organization.

Musk’s enterprises have attracted talent away from OpenAI, with xAI’s product Grok being positioned as a competitor to OpenAI’s ChatGPT software.

In January 2018 emails reproduced by OpenAI, Musk agreed with the suggestion to rely on Tesla as a “cash cow” for the startup’s financial needs. At that time, Tesla reported a cash balance of $3.4 billion, despite reporting a significant net loss for the preceding year.

The “contract” referenced in Musk’s lawsuit against OpenAI is not a formal written agreement but rather an understanding among the early team members to develop artificial general intelligence (AGI) for the benefit of humanity as a nonprofit. However, Musk contends that the project evolved into a for-profit entity controlled largely by Microsoft.

OpenAI’s response echoes internal communications sent to its employees last week, following the legal action initiated by Musk. This development follows a tumultuous period for the company, marked by boardroom conflicts, changes in leadership, and regulatory scrutiny.

As of Tuesday night, Elon Musk’s legal representatives had not issued any comments following OpenAI’s publication of its response.

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