Elon Musk Sues OpenAI and Sam Altman

1. KSKara Swisher0:00

   Elon Musk is suing OpenAI and its CEO Sam Altman, saying they abandoned the company's original mission to develop AI for the benefit of humanity and not for profit. In the lawsuit, Musk accuses OpenAI and Altman of being in breach of contract and violating fiduciary duty, and asks that OpenAI be required to open up its technology to others. OpenAI is pushing back against Musk in a lawsuit in an internal memo to employees. Chief Strategy Officer Jason Kwon, who I happen to know, writing, "We believe the claims in this suit may stem from Elon's regrets at not being involved with the company today." And I think that essentially translates to, "What a loser." I think, I believe that's their attitude there at OpenAI. In fact, I know it is. Um, first of all, as I said on X, for those not a lawyer, my summary, "Tough toenails, AI Karen." Vinod Khosla, who's an investor in OpenAI, posted about the suit saying it feels like a bit of sour grapes. Um, most lawyers that have written about it says there's no merit, it's not a contract, this was not a contract, and, and it's just a lot of grievance by Elon Musk. Most contract lawyers think it's not. But Elon always, uh, you know, does a pitch over the, over the plate in an attempt... Lawsuits are his thing or his love language. Um, what do you think about, uh, the, the lawsuit, Scott?

2. SGScott Galloway1:09

   I had coffee with Ted Sarandos a few weeks ago.

3. KSKara Swisher1:12

   Yeah.

4. SGScott Galloway1:12

   By the way, a lovely guy. And about 12 years ago, I bought what was for me a lot of stock of Netflix at, I think, 12 bucks a share, and it fell to 10 in December, so I sold it to take the tax loss and I never bought back in. And now what is it? At 500? And I remember sitting there as I was talking to Ted, thinking, "As lovely as he is, if I owned a shit ton of shares right now, I would like him so much more."

5. KSKara Swisher1:39

   (laughs)

6. SGScott Galloway1:40

   And, but here's the thing. I'm not going to sue the company because I fucked up-

7. KSKara Swisher1:45

   Yeah.

8. SGScott Galloway1:45

   ... and made a bad decision and lost-

9. KSKara Swisher1:47

   Yeah.

10. SGScott Galloway1:47

    ... a lot of money and power.

11. KSKara Swisher1:48

    Yeah.

12. SGScott Galloway1:49

    And that's all this is. There is no agreement stating, between them and Elon Musk, stating how they would operate the company. He left the company. These were his decisions. And this is-

13. KSKara Swisher2:00

    He tried to take over and then was rebuffed and left. But go ahead.

14. SGScott Galloway2:03

    This is literally a, a, a child stamping his or her feet because they quit the team, and then the team goes on to the national finals. And so they get Daddy... They sue the team?

15. KSKara Swisher2:15

    Yeah.

16. SGScott Galloway2:15

    I mean, there's, this is legally laughable except for the part when you have a billionaire, when you have a billionaire with armies of lawyers, he will harass them and he will make their lives more difficult. This makes, this make, this slows down commerce, it slows down innovation, and it is, it is literally harassment by litigation. There is no legal merit here. There is no business principle here.

17. KSKara Swisher2:39

    Mm.

18. SGScott Galloway2:39

    It is, it is a guy going, "Wait, I control space. I sort of control EVs. I can't believe I fucked up and I don't control AI."

19. KSKara Swisher2:47

    Yeah.

20. SGScott Galloway2:47

    "I know I'll sue them."

21. KSKara Swisher2:48

    Yeah. Yeah. Is there anything bad about it? It's interesting. I've talked to people there, and they're, this is the, I mean, they, they wanted that memo out there obviously. Vinod's been very aggressive and very, like, "Fuck this guy," essentially. Um, and, you know, I think they're basically, he's just s- he's just feels like a loser and he's not the cool kid. He's not the cool kid in AI, and he was there early, that's for sure. For 100... I was, uh, he talked about it extensively 10 years ago. But he definitely got, made a power play as he is wont to do. This is one of his moves at every company he's been at. He always makes a power play and either gets rebuffed or he wins. Um, often gets rebuffed. His early companies he certainly did. And this is what he did here, and he didn't win. And he's trying to, you know, put light onto, he's backing the people who are against Sam Altman, and he's been backing them. A lot of people feel he was involved in the, in the attacks on Sam for sure. Um, I wouldn't, I wouldn't put it past him. Um, and, and that, uh, and that he's just mad about it, you know? He just wants to be in it, and his grok is not doing as well. Although he has tons of, he has tons of chants with Twitter, I guess. Um, but regrets, regrets is a nice way of saying you're a loser, um, I think in the, in the thing. But does it, does, is it bad for OpenAI even if it doesn't go to trial? I mean, he's being pushed back in his other trials. Um, uh, there could be some inner workings revealed in the discovery thing, and of course Microsoft partnership. Um, you know, there's proprietary technology here. Is there any risk at all?

22. SGScott Galloway4:19

    Sure. There's, it, uh, I mean, you have a company that's trying to move a million miles an hour that has a ton of different considerations while they think about effects on humanity, managing a high growth company, try... I mean, this is, Sam Altman has a difficult job, and all this does is it says, "Okay, I have no justification. I'm just going to distract you and make things harder for you." So, it absolutely damages OpenAI. And, and judges, if they do their job, will dismiss this type of lawsuit quickly to say, "You are getting in the way of commerce and there's no legal basis here."

23. KSKara Swisher4:55

    Yeah.

24. SGScott Galloway4:55

    I don't, you know, and generally what I find, generally what I find is that very wealthy people recognize their power, and if they have character, and I, I, I've never bought the trope, the, the Senator Warren-

25. KSKara Swisher5:09

    Mm-hmm.

26. SGScott Galloway5:09

    ... or the populist trope that rich people are inherently evil.

27. KSKara Swisher5:12

    I agree.

28. SGScott Galloway5:12

    I've actually found in general-

29. KSKara Swisher5:14

    I agree.

30. SGScott Galloway5:14

    ... very wealthy people get there because they have high character and they establish allies-

Episode duration: 10:11