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December 13, 2024

Company

Elon Musk wanted an OpenAI for-profit

Elon Musk’s latest legal filing against OpenAI marks his fourth attempt in less than a year to reframe his claims. However, his own words and actions speak for themselves—in 2017, Elon not only wanted, but actually created, a for-profit as OpenAI’s proposed new structure. When he didn’t get majority equity and full control, he walked away and told us we would fail. Now that OpenAI is the leading AI research lab and Elon runs a competing AI company, he’s asking the court to stop us from effectively pursuing our mission.

Open Artificial Technologies entity registration

The public benefit corporation created by Elon Musk on September 15, 2017, as the proposed future structure of OpenAI.

You can’t sue your way to AGI. We have great respect for Elon’s accomplishments and gratitude for his early contributions to OpenAI, but he should be competing in the marketplace rather than the courtroom. It is critical for the U.S. to remain the global leader in AI. Our mission is to ensure AGI benefits all of humanity, and we have been and will remain a mission-driven organization. We hope Elon shares that goal, and will uphold the values of innovation and free market competition that have driven his own success.

November 2015: OpenAI started as a nonprofit, which Elon questioned

On November 20, 2015, Elon said: “Also, the structure doesn't seem optimal…. Probably better to have a standard C corp with a parallel nonprofit.” We felt a nonprofit was the right path at the time, but later came to realize that our structure would have to evolve to attract the capital necessary for the mission.

December 2015: OpenAI publicly announced

OpenAI was introduced to the world.

Early 2017: Our research progress led us to realize we would need billions of dollars for the compute to build AGI.

In 2017, we made progress on building an AI for the competitive video game, Dota. We discovered we would need far more compute than we initially imagined. 

On June 13, 2017, Elon responded to an email, saying, “Ok. Let’s figure out the least expensive way to ensure compute power is not a constraint…”

Ilya reiterated on July 12, 2017, “Each year, we'll need to exponentially increase our hardware spend, but we have reason to believe AGI can ultimately be built with less than $10B in hardware.”

Summer 2017: We and Elon agreed that a for-profit was the next step for OpenAI to advance the mission

On July 13th, 2017, Greg sent Shivon Zilis, who was operating as a liaison between Elon and OpenAI, recap notes from a meeting with Elon that day where we proposed an idea to merge with a hardware startup, saying it “turned into talking about structure (he said non-profit was def the right one early on, may not be the right one now — ilya and I agree with this for a number of reasons).”

On July 21st, 2017, Elon forwarded an article about China’s plan to match the U.S. in AI research facilities by 2020 and become the world leader in AI by 2030 in order to support agriculture and manufacturing as well as homeland security and surveillance efforts. Elon said, “They will do whatever it takes to obtain what we develop. Maybe another reason to change course.”

Greg agreed, saying that starting 2018 the path would need to be a “AI research + hardware for-profit”. Elon responded, “Let's talk Sat or Sun. I have a tentative game plan that I'd like to run by you.”

On August 11, 2017, our AI beat the world’s best players at Dota 1v1. That night, Elon told us “Time to make the next step for OpenAI. This is the triggering event.”

Fall 2017: Elon demanded majority equity, absolute control, and to be CEO of the for-profit.

Over the next six weeks, we negotiated terms for the for-profit.

Elon demanded majority equity. On September 4, 2017, Shivon wrote in a message to Greg, “And he sounded fairly non-negotiable on his equity being between 50-60 so moot point on having majority”. On one call, Elon told us he didn’t care about equity personally but just needed to accumulate $80B for a city on Mars.

On September 12, 2017, Elon laid out a board structure where he would “unequivocally have initial control of the company”.

Elon also told us he would need to be CEO.

September 2017: Elon created the public benefit corporation called “Open Artificial Intelligence Technologies, Inc.”

Elon directed Jared Birchall, his wealth manager, to create the public benefit corporation “Open Artificial Intelligence Technologies, Inc” (akin to SpaceX’s official name of “Space Exploration Technologies Corporation”). It was registered on on September 15, 2017:

Open Artificial Technologies entity registration

The public benefit corporation created by Elon Musk on September 15, 2017, as the proposed future structure of OpenAI.

Franchise Tax Report

September 2017: We rejected Elon's terms because giving him unilateral control of OpenAI and its technology would be contrary to the mission.

We came close to accepting Elon’s terms. As we told him, “We really want to work with you. We believe that if we join forces, our chance of success in the mission is the greatest.”

However, we felt his proposal was not compatible with the mission, saying: “The current structure provides you with a path where you end up with unilateral absolute control over the AGI. You stated that you don't want to control the final AGI, but during this negotiation, you've shown to us that absolute control is extremely important to you.” As we told Elon, “The goal of OpenAI is to make the future good and to avoid an AGI dictatorship.”

We concluded, “Thus we are concerned that as the company makes genuine progress towards AGI, you will choose to retain your absolute control of the company despite current intent to the contrary.”

Elon replied, “Discussions are over” and “To be clear, this is not an ultimatum to accept what was discussed before. That is no longer on the table.”

January 2018: Elon said OpenAI was on a path for certain failure unless we merged into Tesla.

After negotiations broke down, Elon proposed that we spin into Tesla. We would have a billion dollar budget right away and it would increase exponentially from there.

However, our team did not want to work at Tesla. We spent the next months trying to find another way to raise the capital required to achieve the mission.

On January 31, 2018, Elon told us “OpenAI is on a path of certain failure relative to Google. There obviously needs to be immediate and dramatic action or everyone except for Google will be consigned to irrelevance.”

Greg told him that, “My view is that the best future will come from a major expansion of OpenAI. Our goal and mission are fundamentally correct, and that will increasingly be a superpower as AGI grows near.”

Elon soon decided to resign from OpenAI.

February 2018: Elon resigned as co-chair of OpenAI

On February 20, 2018, Elon hosted a goodbye all-hands with the team. He said we should pursue the path we saw to raising billions per year. He said he would pursue advanced AI research at Tesla, which was the only vehicle he believed could obtain this level of funding.

December 2018: Elon told us to raise “billions per year immediately or forget it”

On December 17, 2018, we sent Elon an update on our progress and told him about “a deal to move our computing from Google to Microsoft (in addition to our own data centers).” We also offered to talk about longer-term fundraising plans . He responded, “Sounds good”.

On December 26, 2018, Elon sent an email saying “Even raising several hundred million won’t be enough. This needs billions per year immediately or forget it.”

March 2019: Public announcement of the capped-profit OpenAI LP, which is governed by the non-profit

We sent Elon an advance copy of our OpenAI LP announcement blog post. Elon’s only feedback was: “Please be explicit that I have no financial interest in the for-profit arm of OpenAI.”

Multiple times over the years, we’ve offered Elon equity in OpenAI LP which he declined.

March 2023: Elon started his OpenAI competitor, xAI

On March 9, 2023, Elon formed xAI—a public benefit corporation which is a direct competitor to OpenAI.

xAI Nevada Registration

On March 22, 2023, Elon co-signed an open letter(opens in a new window) calling for a pause in training systems more powerful than GPT-4. Since only OpenAI had a GPT-4-level system at that time, this was a call for only OpenAI to stop development.