(Bloomberg) — OpenAI’s Sam Altman testified that he was “extremely uncomfortable” with Elon Musk’s insistence on having full control over a proposed for-profit subsidiary of the startup in 2017.
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Altman told jurors Tuesday that Musk said he only wanted control of the entity in its early days, but that the billionaire was unwilling to sign a contract to that effect, frustrating his fellow co-founders of the artificial intelligence company.
“A particularly creepy moment was when my co-founders asked Mr. Musk, ‘If you have control, what will happen when you die?’” Altman said. “He said something like, ‘I haven’t thought about it much, but maybe I should pass it on to my kids.’”
“I didn’t feel comfortable with that,” Altman added.
The CEO of OpenAI took the stand as a witness in the final days of the high-profile trial. Musk has accused Altman and the company’s president, Greg Brockman, of seeking to enrich themselves by abandoning the nonprofit’s altruistic mission and turning it into a for-profit commercial company with billions of dollars in investments from Microsoft Corp.
Musk previously testified that he began to lose trust in Altman and Brockman during 2017 negotiations over the future of OpenAI. He was OpenAI’s largest financial backer at the time and thought his equity in his for-profit company should reflect that.
Musk testified that he gave OpenAI approximately $38 million in the form of quarterly donations and rental payments for its office space, far less than the $1 billion he initially promised.
Altman told jurors Tuesday that he contributed $3.75 million to the nonprofit when it started, and then gave “a multiple of that” in equity stakes he held to employees at its inception.
Altman has repeatedly said that he currently has no direct ownership stake in OpenAI. He confirmed in court that he has an indirect interest in OpenAI through Y Combinator, which is a startup incubator he ran when he co-founded OpenAI.
Altman said he and the other co-founders put a lot of time and effort into launching OpenAI, and he was frustrated that those efforts were not reflected in Musk’s proposals for splitting equity in the for-profit company.
“It was absolutely true that Elon was proposing to invest a lot of money and Elon knew a lot about the value of the brand,” Altman said. “But I really wanted to defend Greg and Ilya,” referring to OpenAI co-founder Ilya Sutskever, who became its chief scientist for several years.
“One of the most special things about OpenAI is that we have incredible team spirit and teamwork,” Altman told the jurors. “And I remember in these conversations feeling like Elon didn’t really understand that and didn’t value it.”
Musk left OpenAI’s board of directors in 2018 and stopped paying rent on its office space in 2020. Altman said Musk’s departure affected OpenAI “from top to bottom” and raised questions about its fundraising capabilities without him on board.
“There were questions about what this would mean for our funding and what would happen to Mr. Musk’s competitive effort,” Altman said. “Mr. Musk is a very well-known figure and is known to be quite volatile and people were wondering if he was going to get revenge on us or something.”
Altman said he remains “grateful” to Musk for his contributions and guidance during the early days of OpenAI, acknowledging that he was a “critical contributor.”
“He was someone I respected tremendously,” Altman said. “I also wanted him to stop what he was doing here, which in my opinion was jealousy, as we were going to become more and more successful, and try to defeat us while he started a competitor.”
Musk’s lawyer, Steven Molo, focused the question on Altman’s integrity and whether he has a history of being “deceptive” in business.
Musk’s team has spent a lot of time reviewing Altman’s brief ouster as OpenAI CEO in 2023 with other witnesses, including former board members who testified that he was removed from his position due to a “pattern of behavior related to his honesty, candor, and resistance to board oversight.”
“Are you completely trustworthy?” Molo asked Altman in his first question during cross-examination.
“I think so,” Altman responded.
Molo then asked if the jury should believe him.
“People you’ve done business with have called you deceitful and a liar, right?” Molo said.
“I’ve heard people say that,” Altman said.
Altman versus Musk: How the biggest dispute in technology went to court
There is a lot at stake in the test for OpenAI and Altman. Musk is seeking tens of billions of dollars in damages and the reversal of the ChatGPT maker’s for-profit conversion that was completed in October. He is also pushing for Altman and Brockman to be removed from their leadership roles.
OpenAI has argued that Musk’s lawsuit is primarily an attempt to undermine a major competitor of his own artificial intelligence company, xAI.
Throughout the trial, witness testimony has repeatedly focused on the management styles and reliability of Musk and Altman, and both were criticized.
In a video testimony, former OpenAI CTO Mira Murati recalled that Musk “created chaos” among the company’s senior executives. She also said Altman “undermined” her and didn’t always tell the truth.
Sutskever said he was thinking about concerns with Altman’s leadership for about a year before he and other board members removed Altman as CEO in 2023. Altman returned five days later after employees protested.
Altman’s testimony also caps years of growing animosity between two tech billionaires who came together over a shared vision for the development of AI before falling out over the direction of the company.
Musk has been relentless in his criticism of Altman, attacking not only his leadership of the company but also his character. Musk has called Altman a “liar” and a “con artist.”
After Musk made an unsolicited $97 billion bid to control OpenAI last year, Altman’s rhetoric became less measured. OpenAI’s CEO suggested Musk was simply trying to slow down a competitor and said he didn’t think Musk was “a happy person.” Altman added: “He probably spends his whole life from a position of insecurity; I feel for that guy.”
(Updates with additional details from Sam Altman’s testimony)
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