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Elon Musk to go ahead with lawsuit against OpenAI · Elon Musk Podcast

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  Welcome back to the Elon Musk Podcast.
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  I'm your host Will Walden. Today we're digging into the
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  latest twist in the Elon Musk versus open AI legal drama.
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  Musk is moving forward with his lawsuit even after Open AI
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  announced it would keep non profit control over its for
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  profit business. Your ultimate authority for
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  daily Elon Musk news. Exploring the world's biggest
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  ideas with your host Will Walden.
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  There's something new everyday. And to unpack what this really
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  means and whether Musk has a point at all, I'm joined by tech
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  business analyst and investor Jordan Kessler, who's worked
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  with and advised several major players in AI and venture back
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  companies. Jordan, thanks for.
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  Being here. Always good to be on Will.
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  So Open AI says it's nonprofit parent is still in charge, but
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  Elon Musk says that's just optics and nothing changes is.
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  This a. Meaningful reversal or all of
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  this is corporate theatre. So it's theatre with
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  consequences. The nonprofit is technically
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  still in control. But what Musk is highlighting,
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  and he's not wrong, is that the structure hasn't solved the
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  fundamental conflict. Open AI is still building closed
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  source AI under a business model designed to serve investors like
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  Microsoft. The nonprofit's control looks
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  thin when you dig into who's on the board and how aligned they
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  are with Sam Altman's goals. That's the dilemma.
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  So let's talk about those goals. Altman wants to push the
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  frontier of AGI, and that takes money, billions and billions of
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  it. Does this structure let him
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  raise that kind of money? Open AI wants to eat from both
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  plates. It wants public trust by being a
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  nonprofit controlled entity, but it also wants mega scale funding
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  from investors who expect serious returns.
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  The December plan to restructure into a more traditional for
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  profit model reflected that tension.
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  Investors were telling them we'll fund you, but we need
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  conventional equity and more control.
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  That pressure hasn't gone away. This walk back doesn't resolve
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  it. It just delays the reckoning.
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  Now, Elon's lawsuit claims Open AI betrayed its founding
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  mission. Do you think that's legal
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  strategy or like a personal feud between Elon and Sam Altman?
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  Musk helped start Open AI as a nonprofit to balance what he saw
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  as dangerous, unregulated AI development.
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  He left when the vision shifted toward private control.
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  Now that Open AI is worth $300 billion and partnered with
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  Microsoft, he sees that shift as a betrayal.
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  But let's be real, he's also running a competitor, XAI, so
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  he's not just acting out of principle.
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  He wants to slow Open AI down. That doesn't mean his legal
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  argument has no merit, but it's not pure.
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  Open AI says his lawsuit is baseless and meant to block
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  their progression. Could this actually hurt Open AI
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  long term? Yes, not because of the lawsuits
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  outcome, Who knows how that'll go in court, but because of the
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  uncertainty it creates. Investors hate ambiguity and
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  this hybrid nonprofit for profit model is hard to price and even
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  harder to trust. If you're managing billions in
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  capital, are you going to back a company whose controlling board
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  doesn't have to act in your interest?
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  Musk's lawsuit amplifies that doubt for now.
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  Open AI said Softbank's $30 billion is still on the table,
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  and also Microsoft hasn't even flinched.
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  Does that give them sort of like a lifeline going forward?
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  Microsoft's relationship is strong because it's already
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  deeply integrated Open AI's models into its products.
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  SoftBank is more opportunistic. They'll go where the growth is,
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  but the more governance uncertainty you have, the more
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  risk those funds carry. If this lawsuit drags out and
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  regulators keep probing, some of that money could evaporate.
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  Now regulators California and Delaware are both reviewing Open
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  a is business structure. Could those reviews force
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  another change in the future? Absolutely.
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  This isn't just about Musk anymore.
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  If either state's attorney general decides Open AI isn't
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  complying with nonprofit rules, they could demand changes,
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  possibly structural ones. That's a legal risk hammer
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  hanging over every board decision Open AI makes from now
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  until that review ends. So big picture here, what does
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  this fight say about how we build and govern companies
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  working on AGI going forward? It says we don't have a working
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  model yet. Everyone's trying to square a
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  circle. How do you build trillion dollar
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  tech on nonprofit principles? Open AIS model is messy because
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  they're trying to be the first. Musk's lawsuit is one way to
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  test if this model holds up under pressure.
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  If it doesn't, future labs may have to choose nonprofit for
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  real or for profit, with transparency and regulation.
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  You can't hide behind a hybrid governance forever.
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  Jordan Kessler, thanks for breaking that down.
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  Always sharp, buddy. Appreciate it Will.
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  Hey, thank you so much for listening today.
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  And please take care of yourselves and each other, and
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  I'll see you tomorrow.