Sam Altman takes the stand in trial that could determine OpenAI’s future

By Hadas Gold, Samantha Delouya, CNN

Oakland, Calif. (CNN) — OpenAI’s cofounders once asked Elon Musk, who helped create and fund the company, an important question: If he were to control OpenAI, what would happen to the company on his death? Musk responded that he hadn’t thought about it much and that he might pass it on to his children.

Musk’s reply was a “hair-raising moment” in the early days of OpenAI, CEO Sam Altman said in testimony on Tuesday, in a trial that could determine the future of his company and potentially the AI industry.

“I didn’t feel comfortable with that,” Altman said

Musk is suing the company and its leaders over allegations that OpenAI, Altman and president Greg Brockman breached their charitable trust when OpenAI shifted from its nonprofit mission to include a profit-oriented structure. Microsoft, an early investor in OpenAI, is named as a co-defendant.

Musk wants the judge to order OpenAI to revert to a nonprofit and for Altman and Brockman to lose their board positions. He’s also asking that more than $130 billion to go back into OpenAI’s nonprofit arm. A ruling in Musk’s favor could scramble OpenAI’s plans for an initial public offering later this year.

OpenAI has denied Musk’s claims, saying Musk wanted a for-profit structure and only brought the case after he failed to gain control of OpenAI. OpenAI has claimed Musk, who started his own AI company after leaving OpenAI in 2018, is now attempting to harm a competitor.

Control over artificial general intelligence, a hypothetical stage of AI in which its cognitive abilities match that of a human across any subject, was an important factor in OpenAI’s founding, Altman said. The company was founded in part because Altman and the other cofounders believed one person should not be in charge of AGI if it were achieved, he said.

“My belief is he wanted to have long term control, and that he would have had that had we agreed to the structure he wanted,” Altman said, referring to Musk.

Before resigning from OpenAI’s board in 2018, Musk “demotivated” some key researchers by ranking their accomplishments, Altman testified, which damaged the company culture. Musk’s resignation boosted morale, Altman added.

Musk’s attorneys earlier in the trial tried to paint Altman as deceptive and have brought up his brief ousting in 2023, when the company’s board temporarily pushed him out as CEO over concerns about his leadership.

OpenAI board members and executives testified about their qualms with Altman, including his resistance to the board’s oversight and alleged dishonesty with senior leadership, including former Chief Technology Officer Mira Murati.

OpenAI cofounder Ilya Sutskever, who played a major role in Altman’s removal, testified on Monday that he spent months gathering evidence showing what he said was Altman’s pattern of deception and poor management. Sutskever later voted to have Altman return, saying he regretted the decision. Altman returned to his role just days after his removal and a new board was instated.

Altman’s own words have also been used as evidence. “I remain enthusiastic about the non profit structure!” he wrote in a 2017 email to Musk during discussions about OpenAI’s structure, including the development of a for-profit entity.

When reports surfaced in 2022 indicating Microsoft was considering further investment into OpenAI, already valued at $20 billion at the time, Musk texted Altman that he felt like the situation was “a bait and switch” after saying he “provided almost all the funding.”

“I agree this feels bad,” Altman responded, adding that OpenAI had offered Musk equity in its capped for-profit entity which Musk declined at the time.

Microsoft’s relationship with OpenAI, its motivation for investing in the company and its access to OpenAI’s technology and intellectual property were a major focus during CEO Satya Nadella’s testimony on Monday.

Altman’s testimony is expected to continue into Wednesday, with closing arguments beginning on Thursday before jury deliberations.

The-CNN-Wire
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