Elon Musk Sues OpenAI and Sam Altman

1. 0:00 – 0:30

   Musk sues OpenAI: claims, requested remedy, and OpenAI’s internal rebuttal

   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

2. 0:30 – 1:09

   Kara’s take: ‘sour grapes’ and litigation as Musk’s “love language”

   1. KSKara Swisher0:30

      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?

3. 1:09 – 1:49

   Scott’s analogy: you don’t sue because you missed out

   1. SGScott Galloway1:09

      I had coffee with Ted Sarandos a few weeks ago.

   2. KSKara Swisher1:12

      Yeah.

   3. 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."

   4. KSKara Swisher1:39

      (laughs)

   5. SGScott Galloway1:40

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

   6. KSKara Swisher1:45

      Yeah.

   7. SGScott Galloway1:45

      ... and made a bad decision and lost-

   8. KSKara Swisher1:47

      Yeah.

   9. SGScott Galloway1:47

      ... a lot of money and power.

   10. KSKara Swisher1:48

       Yeah.

4. 1:49 – 2:39

   “Harassment by litigation”: why Scott thinks the case is legally weak but still harmful

   1. 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-

   2. KSKara Swisher2:00

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

   3. 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?

   4. KSKara Swisher2:15

      Yeah.

   5. 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.

   6. KSKara Swisher2:39

      Mm.

5. 2:39 – 2:48

   Control, ego, and the AI throne: Musk’s real grievance

   1. 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."

   2. KSKara Swisher2:47

      Yeah.

   3. SGScott Galloway2:47

      "I know I'll sue them."

6. 2:48 – 3:49

   Kara’s inside-baseball: prior power play, Sam Altman attacks, and Grok as a lagging rival

   1. 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

7. 3:49 – 4:55

   Practical risk to OpenAI: discovery, partnerships, and operational drag

   1. KSKara Swisher3:49

      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?

   2. 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."

   3. KSKara Swisher4:55

      Yeah.

8. 4:55 – 6:47

   Wealth, character, and using courts to ‘true up the world’

   1. 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-

   2. KSKara Swisher5:09

      Mm-hmm.

   3. SGScott Galloway5:09

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

   4. KSKara Swisher5:12

      I agree.

   5. SGScott Galloway5:12

      I've actually found in general-

   6. KSKara Swisher5:14

      I agree.

   7. SGScott Galloway5:14

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

   8. KSKara Swisher5:18

      Some.

   9. SGScott Galloway5:18

      ... along the way.

   10. KSKara Swisher5:18

       Yeah, like regular people.

   11. SGScott Galloway5:19

       And they're measured-

   12. KSKara Swisher5:21

       Mm-hmm.

   13. SGScott Galloway5:21

       ... around litigation, or somewhat measured. They don't, they don't go out of their way to sue people because they realize they have more money. This guy sees litigation as a means of trying to true up the world to his standard.

   14. KSKara Swisher5:33

       Who does that sound like?

   15. SGScott Galloway5:34

       And his standard is-

   16. KSKara Swisher5:35

       Who does that sound like?

   17. SGScott Galloway5:36

       His standard is, "I should control the world." And let me, let's just ask a global question here. Are we better off... Uh, we're better off for Elon Musk. I still believe that. He's been a pioneer around EVs, what he's doing in space. I don't think you'd want to press a button and have him disappear or have him move to another country. But might it be a better idea to have him doing his thing, and a guy like Sam Altman, who thus far strikes me as very thoughtful...... controlling the, the most important company in AI, or would we want Elon Musk to control it?

   18. KSKara Swisher6:08

       Yeah. He's trying to fuck with them.

   19. SGScott Galloway6:10

       There's, there's an important-

   20. KSKara Swisher6:11

       That's all he's doing.

   21. SGScott Galloway6:11

       And, and it'll work. They already are. We're already talking about it.

   22. KSKara Swisher6:15

       Mm-hmm.

   23. SGScott Galloway6:15

       Some, some embarrassing things might come out. And not only that, he's pro- Sam Altman and key principals to this company and key funders are probably, A, going to have to spend time in court or give depositions, and also they're gonna have to be very careful about anything they do or say. It'll pull back their risk aggressiveness, which is, which is part of being an entrepreneur and growing a bus- a business. This is just, it's bad for the economy. It's, it's bad for business. It sets the wrong precedent for other people.

   24. KSKara Swisher6:45

       It does.

   25. SGScott Galloway6:45

       It, it, uh, uh, I mean, it's just, it really is-

9. 6:47 – 7:19

   The Trump parallel: aggrievement politics and lawsuit-as-weapon

   1. KSKara Swisher6:47

      This is what Trump does too.

   2. SGScott Galloway6:49

      ... tr-

   3. KSKara Swisher6:49

      The lawsuits, the grieved, the grieved lawsuits. It's, it's a-

   4. SGScott Galloway6:52

      Yeah.

   5. KSKara Swisher6:52

      ... it's a, it's a thing. He's moving s- There was a good article in the Times about how close, by David French, about how close Elon and Trump are to MAGA, like this idea of aggrievement and lawsuits and anger and this and that. It was interesting. I've, it's just, he's such a loser.

   6. SGScott Galloway7:05

      I, unfortunately, I think this type of, this type of aggressive litigation is effective-

   7. KSKara Swisher7:11

      Mm-hmm.

   8. SGScott Galloway7:11

      ... in the sense that it just places a chill over society and business.

   9. KSKara Swisher7:14

      Yeah, he likes to do it.

   10. SGScott Galloway7:15

       You know, like, you know, I'd rather, I mean, it's just everybody, right?

   11. KSKara Swisher7:19

       Mm-hmm.

10. 7:19 – 8:07

    Chilling effects and the Peter Thiel/Gawker precedent: power vs. speech and risk-taking

    1. SGScott Galloway7:19

       And when billion- it started with Peter Thiel deciding to put a media company out of business because he had a ton of money. This kind of stuff puts a chill on journalists. It puts a chill on investors. It puts a chill on CEOs. I mean, it, it, it, it's just not, it's, it's not the way, I, I don't know how you-

    2. KSKara Swisher7:39

       Although I have noticed-

    3. SGScott Galloway7:40

       I don't, I don't know legally-

    4. KSKara Swisher7:40

       ... more people pushing back.

    5. SGScott Galloway7:42

       Yup.

    6. KSKara Swisher7:42

       OpenAI pushed back really hard. I, I, Alex Stamos was doing one of my interviews in San Fr- in Seattle.

    7. SGScott Galloway7:49

       Mm-hmm.

    8. KSKara Swisher7:49

       And he wasn't talk- he wasn't talking publicly before. You know what I mean? 'Cause he, they have the lawsuit by Elon. Elon goes around suing everybody, like to try to shut them up. And I think people are like, "Fuck you," like essentially. But still it causes money. It's expensive. It, it, uh, it creates all kinds of like-

    9. SGScott Galloway8:06

       But two th-

    10. KSKara Swisher8:06

        ... tissues.

11. 8:07 – 8:55

    How nuisance suits crush small companies: recruiting, fundraising, and survival

    1. SGScott Galloway8:07

       Two th- two-thirds of jobs are created by small and medium-sized businesses.

    2. KSKara Swisher8:11

       Mm-hmm.

    3. SGScott Galloway8:12

       If you're, say he just starts, and I think he's already done this.

    4. KSKara Swisher8:15

       Mm-hmm.

    5. SGScott Galloway8:16

       Say he just, any competitor... First off, he called for an AI pause publicly because-

    6. KSKara Swisher8:20

       Yeah.

    7. SGScott Galloway8:20

       ... because he's concerned about the fate of the world and it comes out-

    8. KSKara Swisher8:22

       Mm-hmm.

    9. SGScott Galloway8:22

       ... he was trying to catch up, that he was going full force with his own AI efforts and had no interest in pausing. But if, if big companies just start suing, and to be clear, Big Tech is guilty of this.

    10. KSKara Swisher8:35

        Mm-hmm.

    11. SGScott Galloway8:35

        They just start suing small companies left and right. They can put them out of business.

    12. KSKara Swisher8:40

        It's really repulsive.

    13. SGScott Galloway8:41

        E- the, the small company can't... It's difficult for the small company to wait around for the judgment.

    14. KSKara Swisher8:46

        Mm-hmm.

    15. SGScott Galloway8:46

        It's difficult for them to recruit employees.

    16. KSKara Swisher8:48

        Mm-hmm.

    17. SGScott Galloway8:48

        Do you know what it's like to raise money under the auspice of a-

    18. KSKara Swisher8:52

        You don't.

    19. SGScott Galloway8:52

        ... of a, of a lawsuit filed by-

    20. KSKara Swisher8:54

        You do not.

    21. SGScott Galloway8:54

        ... Elon Musk?

    22. KSKara Swisher8:55

        You do not.

12. 8:55 – 10:11

    Scott’s personal example: cease-and-desist threats—and why wealth determines who can fight back

    1. SGScott Galloway8:55

       Or quite frankly, a lot of these companies, including some of our favorites, Apple, Amazon, are very quick to send cease and desist letters. When I left my last company, I wanted to start another company. They immediately started sending me letters. And I'm like, "Okay, I want to work. I'm not going to compete with you, but I'd like to work." And in their view, it was, "Unless you sit around and do nothing for the rest of your life, in our view, you're competing with us." That's how it came across to me. And we're going to hire this really angry, mean law firm. And the only reason they backed down is because I'm rich.

    2. KSKara Swisher9:36

       Yeah.

    3. SGScott Galloway9:37

       And they know I can defend myself.

    4. KSKara Swisher9:39

       Yeah.

    5. SGScott Galloway9:39

       But what if it was tw- 10 years ago or 20 years ago when I didn't have the money and I was trying to start companies?

    6. KSKara Swisher9:44

       Mm-hmm.

    7. SGScott Galloway9:44

       I would have, I wouldn't have been able to raise money. I would, I would have just backed down from this big bad corporation who had absolutely no legal merit. None whatsoever. Every lawyer I talked to said, "Yeah, you're gonna win this, but it's gonna cost you a bunch of money." What if I didn't have a bunch of money?

    8. KSKara Swisher10:01

       Yeah. It's a, it's a nuisance. It's a nuisance lawsuit. Anyway, Elon, get some therapy.

Episode duration: 10:11