1 00:00:00,020 --> 00:00:02,860 Josh: Two people sat across from each other at a federal courtroom in Oakland yesterday. 2 00:00:03,100 --> 00:00:05,100 Josh: One is the most valuable person in the world. 3 00:00:05,300 --> 00:00:08,760 Josh: The other runs the most valuable startup in history. They built it together 4 00:00:08,760 --> 00:00:11,220 Josh: decades ago. Now one is trying to take it from the other. 5 00:00:11,380 --> 00:00:16,500 Josh: Those people involved Elon Musk and Sam Altman. And the numbers attached are pretty hard to believe. 6 00:00:16,700 --> 00:00:22,800 Josh: It's an $850 billion company, $134 billion in damages, and a potential $1 trillion 7 00:00:22,800 --> 00:00:28,300 Josh: IPO that might not go through in the case this trial goes in an unfavorable way for OpenAI. 8 00:00:28,300 --> 00:00:32,480 Josh: Whatever the verdict is, the rules of how AI gets built in America is about to change. 9 00:00:32,760 --> 00:00:34,980 Josh: And this is probably the trial of the decade. 10 00:00:35,220 --> 00:00:41,180 Ejaaz: Yeah, this is the culmination of a decade-long grudge between Sam Altman and Elon Musk. 11 00:00:41,420 --> 00:00:45,200 Ejaaz: And in order to talk about what happened yesterday and what's happening today 12 00:00:45,200 --> 00:00:47,760 Ejaaz: with the trial, I think it's important to set some context. 13 00:00:47,780 --> 00:00:52,580 Ejaaz: So we created this timeline of the experience, right? Thank you, Claude. 14 00:00:53,140 --> 00:00:55,940 Ejaaz: So we used a neutral party, by the way. No chat GPT, no XAI. 15 00:00:56,160 --> 00:00:59,620 Ejaaz: It's just Claude. Okay, so exactly 11 years ago. 16 00:01:00,190 --> 00:01:05,170 Ejaaz: Elon Musk and Sam Warmer got together and had this idea to create an AI startup 17 00:01:05,170 --> 00:01:11,570 Ejaaz: called OpenAI, specifically a non-profit foundation that would create AI, 18 00:01:11,810 --> 00:01:14,750 Ejaaz: superintelligence, and then use it for the benefit of humanity. 19 00:01:14,930 --> 00:01:18,750 Ejaaz: So the key point here is that they wouldn't request to turn a profit, 20 00:01:18,750 --> 00:01:24,970 Ejaaz: but it was only just over two years later in 2017 that there was a power struggle. 21 00:01:25,150 --> 00:01:30,270 Ejaaz: And the struggle was specifically over wanting to turn OpenAI into a for-profit. 22 00:01:30,550 --> 00:01:33,790 Ejaaz: Now, if you looked at the trial today, you would assume that was Sam Altman 23 00:01:33,790 --> 00:01:36,810 Ejaaz: calling for it, but it was actually Elon Musk himself. 24 00:01:37,050 --> 00:01:41,630 Ejaaz: He said he wanted to convert OpenAI into a for-profit and merge it into Tesla. 25 00:01:41,630 --> 00:01:44,630 Ejaaz: He thought he had the chops and power to be able to do that. 26 00:01:44,770 --> 00:01:48,950 Ejaaz: And the reason why he thought that was he had agreed to fund the entire endeavor 27 00:01:48,950 --> 00:01:51,450 Ejaaz: up to the tune of a billion dollars. 28 00:01:51,750 --> 00:01:55,410 Ejaaz: Sam Altman and Greg Brockman, who were key co-founders of OpenAI at the time, 29 00:01:55,830 --> 00:01:59,510 Ejaaz: rejected that proposal, but wanted to figure out another way to work with him. 30 00:01:59,610 --> 00:02:04,570 Ejaaz: But Musk couldn't get agreeance on both sides. And in 2018, he decided to leave. 31 00:02:04,690 --> 00:02:08,890 Ejaaz: But it was only a year later that Sam Altman and Greg Brockman thought, you know what? 32 00:02:09,410 --> 00:02:14,070 Ejaaz: We will turn this into a for-profit and we will own major stakes in this ourselves. 33 00:02:14,350 --> 00:02:17,110 Ejaaz: So obviously, Elon Musk was a bit salty about this, 34 00:02:17,190 --> 00:02:20,090 Ejaaz: but he didn't believe they had the chops to create a 35 00:02:20,090 --> 00:02:24,790 Ejaaz: winning ai startup but of course as we know the story goes three years later 36 00:02:24,790 --> 00:02:29,810 Ejaaz: chat gpt launches it goes completely viral and open ai becomes one of the most 37 00:02:29,810 --> 00:02:34,170 Ejaaz: valuable privately held startups in the entire world and of course at this point 38 00:02:34,170 --> 00:02:39,150 Ejaaz: they are shifting more towards a for-profit so elon musk looks at the success and he's like, 39 00:02:39,600 --> 00:02:45,700 Ejaaz: ha, I'm owed reparations from this. I co-founded OpenAI. He changes his tune. 40 00:02:45,880 --> 00:02:50,700 Ejaaz: Now he wants a piece of the pie. And what he's seeking in today's culmination 41 00:02:50,700 --> 00:02:55,600 Ejaaz: of a trial is exactly $134 billion. So he's not really asking for much. 42 00:02:55,860 --> 00:03:00,240 Ejaaz: And for the polite removal of Sam Altman and Greg Brockman from the board of 43 00:03:00,240 --> 00:03:03,320 Ejaaz: OpenAI. So that is the context that brought us here today. 44 00:03:03,640 --> 00:03:06,680 Josh: It's funny because now they're actually on the stand. So as of this week, 45 00:03:06,880 --> 00:03:08,640 Josh: people are on the stand there beginning testifying. 46 00:03:08,820 --> 00:03:12,000 Josh: Elon just went up yesterday for the opening remarks. Now, these are the softball 47 00:03:12,000 --> 00:03:14,100 Josh: questions that his own lawyer asked him. 48 00:03:14,180 --> 00:03:18,500 Josh: But on the stand, I mean, he had a pretty compelling case. He said he came up with the idea. 49 00:03:18,680 --> 00:03:22,980 Josh: He came up with the name. He recruited the key people. He taught them everything that he knew. 50 00:03:23,140 --> 00:03:27,620 Josh: And then he provided all of the initial funding. So he essentially did everything 51 00:03:27,620 --> 00:03:32,460 Josh: in the early stages of OpenAI, including the recruitment of the single most 52 00:03:32,460 --> 00:03:35,060 Josh: important person to OpenAI, a lot will argue, which is Ilya Sitzkever. 53 00:03:35,060 --> 00:03:38,680 Josh: Now, Ilya is the reason why Larry Page will no longer talk to Elon, 54 00:03:38,860 --> 00:03:41,420 Josh: because Larry Page deemed him as his best employee. 55 00:03:41,600 --> 00:03:46,200 Josh: Elon was able to convince him to come to OpenAI and to start something powerful with Greg and Sam. 56 00:03:46,420 --> 00:03:51,060 Josh: Now, he's also responsible for recruiting Microsoft Cloud and NVIDIA Compute. 57 00:03:51,240 --> 00:03:54,660 Josh: I mean, I remember listening to a conversation with Jensen where one of the 58 00:03:54,660 --> 00:03:58,440 Josh: first people to ever believe in these chips was Elon, who was buying them and 59 00:03:58,440 --> 00:04:04,100 Josh: recruiting NVIDIA's help on behalf of OpenAI, not Tesla, not SpaceX, for OpenAI. 60 00:04:04,100 --> 00:04:07,860 Josh: So it's clear that he did a lot and he wanted it to be known as he got started 61 00:04:07,860 --> 00:04:08,920 Josh: with the court briefing yesterday. 62 00:04:09,480 --> 00:04:12,740 Ejaaz: So let's now dive into what exactly happened yesterday. 63 00:04:13,180 --> 00:04:16,600 Ejaaz: This is a closed trial in the sense that it isn't public. 64 00:04:16,760 --> 00:04:20,800 Ejaaz: There's 15 reporters, probably totally 30 people in the room, 65 00:04:20,920 --> 00:04:23,700 Ejaaz: but the stars of the show are in the courtroom themselves. 66 00:04:24,080 --> 00:04:27,220 Ejaaz: Sam Altman, Greg Brockman, and Elon Musk. 67 00:04:27,680 --> 00:04:32,180 Ejaaz: And for the first day, Elon Musk decides to put his first witness up to the stand. 68 00:04:32,780 --> 00:04:37,440 Ejaaz: And that's himself, of course, Elon Musk, who is testifying for himself on behalf of his case. 69 00:04:37,620 --> 00:04:41,400 Ejaaz: And the side that Elon Musk and his lawyer is basically making is, 70 00:04:41,780 --> 00:04:45,340 Ejaaz: and this is a direct quote, ladies and gentlemen, we are here today because 71 00:04:45,340 --> 00:04:48,840 Ejaaz: the defendants in this case, OpenAI, stole a charity. 72 00:04:49,060 --> 00:04:52,620 Ejaaz: And they go on to make the point that Elon Musk is an immigrant into the US. 73 00:04:52,620 --> 00:04:54,700 Ejaaz: He worked hard. He busked tables. 74 00:04:55,060 --> 00:04:58,700 Ejaaz: And he put in his own hard-earned money up to the tune of $44 million, 75 00:04:58,920 --> 00:05:04,300 Ejaaz: so not that $1 billion that I mentioned earlier into OpenAI to make it its success that it is today. 76 00:05:04,400 --> 00:05:07,160 Ejaaz: And therefore, he is owed some form of payment. 77 00:05:07,300 --> 00:05:12,980 Ejaaz: Now, he's asking for a large chunk, $134 billion, but that money doesn't actually go to Elon Musk. 78 00:05:13,100 --> 00:05:16,780 Ejaaz: He's going to send that to a non-profit as was originally attended in OpenAI. 79 00:05:16,900 --> 00:05:22,540 Ejaaz: But the main point here is it's a philosophical and brand-related dunk on his 80 00:05:22,540 --> 00:05:24,920 Ejaaz: biggest competitor versus XAI, for example. 81 00:05:25,080 --> 00:05:30,440 Ejaaz: Now, OpenAI's lawyer himself says, we are here because Mr. Musk didn't get his way at OpenAI. 82 00:05:30,740 --> 00:05:34,160 Ejaaz: That's what happened. He quit saying that they would fail for sure. 83 00:05:34,280 --> 00:05:37,320 Ejaaz: But my clients had the nerve to go on and succeed without him. 84 00:05:37,440 --> 00:05:40,960 Ejaaz: So the point that OpenAI is making is basically Elon Musk had his opportunity. 85 00:05:40,980 --> 00:05:43,060 Ejaaz: He actually wanted to take it for profit as well. 86 00:05:43,160 --> 00:05:46,440 Ejaaz: But just because we did it ourselves and became successful after he left. 87 00:05:46,880 --> 00:05:51,980 Ejaaz: He's now coming back for undue payments, which is also a very valuable argument on their side. 88 00:05:52,120 --> 00:05:54,740 Ejaaz: So that's currently two settings of the argument. 89 00:05:55,000 --> 00:05:56,900 Ejaaz: The tension was pretty palpable. 90 00:05:57,320 --> 00:06:02,060 Ejaaz: Sam Altman, apparently, according to reports, sat there the entire time with his arms crossed. 91 00:06:02,440 --> 00:06:05,680 Ejaaz: He didn't stay for Elon Musk's specific testament. 92 00:06:06,060 --> 00:06:09,680 Ejaaz: Instead, leaving behind a recorded video of him making excuses saying, 93 00:06:09,740 --> 00:06:11,620 Ejaaz: I've got to go work and do A, B, and C. 94 00:06:12,040 --> 00:06:16,900 Ejaaz: But the president of OpenAI, Greg Brockman, did stay for the entire thing and hear Elon Musk out. 95 00:06:17,260 --> 00:06:20,760 Ejaaz: The spiciest news is probably going to come later today when Elon Musk himself 96 00:06:20,760 --> 00:06:22,860 Ejaaz: is going to get grilled by OpenAI's lawyer. 97 00:06:23,490 --> 00:06:26,450 Josh: Yeah, it's a shame that this isn't being televised or that's not recorded. 98 00:06:26,450 --> 00:06:29,790 Josh: You have to read these accounts of people who are actually there in order to 99 00:06:29,790 --> 00:06:31,490 Josh: kind of get a peek into what's going on. 100 00:06:31,570 --> 00:06:35,930 Josh: But before we get into that peek of what happened, maybe we talk about the smoking 101 00:06:35,930 --> 00:06:39,510 Josh: gun, which is the piece of evidence that actually turned this lawsuit into a trial. 102 00:06:40,110 --> 00:06:43,690 Josh: And that's Greg Brockman's diary entry, which I thought was really funny. 103 00:06:43,690 --> 00:06:47,350 Josh: So Greg Bachman, president and co-founder of OpenAI. 104 00:06:47,610 --> 00:06:52,930 Josh: And in November of 2017, when he was publicly and privately telling Elon that 105 00:06:52,930 --> 00:06:55,930 Josh: the team remained enthusiastic about the nonprofit structure, 106 00:06:56,130 --> 00:06:59,190 Josh: he was writing in his personal journal something totally different. 107 00:06:59,210 --> 00:07:01,650 Josh: And we actually have the personal journal diary entries. 108 00:07:01,790 --> 00:07:06,910 Josh: In November 6th, 2017, it says, cannot say that we are committed to the nonprofit. 109 00:07:07,210 --> 00:07:10,970 Josh: Don't want to say that we're committed. If three months later, 110 00:07:10,970 --> 00:07:14,850 Josh: we're doing B Corp, then it was a lie. So he's kind of confessing to the idea 111 00:07:14,850 --> 00:07:17,790 Josh: that he's aware that it is a lie. 112 00:07:17,970 --> 00:07:21,550 Josh: And then a few days later, under the heading called Our Plan, 113 00:07:22,110 --> 00:07:25,190 Josh: Greg Brockman wrote, it would be nice to be making billions of dollars, 114 00:07:25,190 --> 00:07:30,790 Josh: but we can't see us turning into a for-profit without a very nasty fight. And then there's more. 115 00:07:31,090 --> 00:07:35,710 Josh: This is the only chance we have to get out from Elon. What will it take me to do this? $1 billion? 116 00:07:36,250 --> 00:07:40,030 Josh: So there's this lot of contemplation that's happening in his redacted diary 117 00:07:40,030 --> 00:07:46,050 Josh: entries that we see here that leads the court to believe that they were aware of what was going on. 118 00:07:46,170 --> 00:07:48,530 Josh: They were trying to scheme and plot against Elon. 119 00:07:48,750 --> 00:07:52,750 Josh: And no side is right in this court case. And I think that's why 120 00:07:53,370 --> 00:07:56,730 Josh: It's so compelling is because both sides really do have compelling arguments, right? 121 00:07:56,790 --> 00:08:00,790 Josh: It's like Elon says, this is a corrupt structure that sets a poor precedent 122 00:08:00,790 --> 00:08:02,690 Josh: for what a charitable organization looks like. 123 00:08:02,890 --> 00:08:06,330 Josh: And OpenAI is saying, well, we basically couldn't exist unless we pivoted. 124 00:08:06,410 --> 00:08:07,390 Josh: We did everything we could. 125 00:08:07,630 --> 00:08:11,270 Josh: And now we have this new company that exists. That's kind of been a disaster 126 00:08:11,270 --> 00:08:13,370 Josh: and a mess, but it works. It gets the job done. 127 00:08:13,510 --> 00:08:18,030 Josh: It's been a chaotic disaster. So I think Polymarket currently has it at about 128 00:08:18,030 --> 00:08:22,790 Josh: 60% chance in Elon's favor, but this is very much an even battle as it stands 129 00:08:22,790 --> 00:08:24,790 Josh: right now in who we expect to win. 130 00:08:25,370 --> 00:08:31,210 Ejaaz: Yeah, there is no clear winner, as you said. And that's because both sides are 131 00:08:31,210 --> 00:08:33,190 Ejaaz: kind of shooting themselves in the foot, right? 132 00:08:33,330 --> 00:08:36,710 Ejaaz: Like there's three main cracks that I see, right? Okay, so crack number one 133 00:08:36,710 --> 00:08:37,430 Ejaaz: is what you just mentioned. 134 00:08:37,590 --> 00:08:41,850 Ejaaz: So Greg Brockman's diary, there's some implicative evidence that states that 135 00:08:41,850 --> 00:08:46,150 Ejaaz: they're trying to go behind Elon's back to not only turn it into a for-profit 136 00:08:46,150 --> 00:08:50,410 Ejaaz: against the original vision of the company, but also turn a profit for Sam Olman 137 00:08:50,410 --> 00:08:51,450 Ejaaz: and Greg Rockman themselves, 138 00:08:51,770 --> 00:08:53,830 Ejaaz: whilst ousting Elon Musk, the guy that funded them. 139 00:08:54,090 --> 00:08:58,850 Ejaaz: That sounds very convincing enough, except there is an email and tweet from 140 00:08:58,850 --> 00:09:02,970 Ejaaz: Elon Musk three years later, where he basically admits to him saying. 141 00:09:03,490 --> 00:09:05,610 Ejaaz: Yeah, I wanted to turn it into a for-profit first. 142 00:09:05,890 --> 00:09:09,870 Ejaaz: And the idea was to put it under Tesla's ownership, therefore defeating the 143 00:09:09,870 --> 00:09:14,530 Ejaaz: whole intentional purpose that he was aligned with this non-profit vision. 144 00:09:14,750 --> 00:09:19,570 Ejaaz: So that's crack number one. Crack number two is the Statue of Limitations tweet, 145 00:09:19,770 --> 00:09:24,450 Ejaaz: where he basically goes, OpenAI is essentially captured by Microsoft, right? 146 00:09:24,690 --> 00:09:28,570 Ejaaz: So the legal significance of this is this was tweeted in 2020. 147 00:09:28,670 --> 00:09:35,810 Ejaaz: And it wasn't until four years later that Elon filed this lawsuit against Sam Altman and OpenAI, 148 00:09:36,030 --> 00:09:40,630 Ejaaz: which suggests that there was a time delta where he had a reason to sue them 149 00:09:40,630 --> 00:09:43,050 Ejaaz: early on because they were going very much for a for profit, 150 00:09:43,170 --> 00:09:45,710 Ejaaz: hence Microsoft investing $13 billion in them. 151 00:09:46,030 --> 00:09:48,930 Ejaaz: But decided to wait until three years later when OpenAI was much, 152 00:09:49,050 --> 00:09:52,230 Ejaaz: much, much more successful, profitable, and the number one leading AI startup 153 00:09:52,230 --> 00:09:55,350 Ejaaz: to then be like, hmm, I'm going to seek reparations now. 154 00:09:55,570 --> 00:09:59,970 Ejaaz: It kind of defeats his whole argument. And crack number three is the 2017 Tesla 155 00:09:59,970 --> 00:10:03,870 Ejaaz: merger email that I mentioned earlier that he tweeted about in 2021, 156 00:10:03,870 --> 00:10:08,930 Ejaaz: but also the email came out in evidence through this court proceedings in 2017. 157 00:10:09,850 --> 00:10:13,790 Ejaaz: Proving that he wanted to merge it within Tesla, indicating the same kind of 158 00:10:13,790 --> 00:10:16,050 Ejaaz: for-profit nature That's Sam Altman and Greg Rockman they're going after. 159 00:10:16,170 --> 00:10:21,330 Ejaaz: So Elon Musk is kind of fighting himself here, especially as he takes the stand 160 00:10:21,330 --> 00:10:24,450 Ejaaz: and starts providing all these different bits of evidence, which can just be 161 00:10:24,450 --> 00:10:27,950 Ejaaz: refuted by emails and posts that he made himself. 162 00:10:28,410 --> 00:10:31,710 Josh: Well, it was funny. I mean, the judge threatened a gag order yesterday because 163 00:10:31,710 --> 00:10:36,090 Josh: he had to sit both of them down and say, you guys cannot be insulting each other 164 00:10:36,090 --> 00:10:37,750 Josh: publicly while this court is going on. 165 00:10:37,890 --> 00:10:40,670 Josh: And it's really funny because they can't help themselves. 166 00:10:40,890 --> 00:10:44,450 Josh: Like the arena in which they play in is where they troll each other. 167 00:10:44,610 --> 00:10:48,050 Josh: And the judge made it very clear that unless you guys stop bullying each other, 168 00:10:48,210 --> 00:10:53,250 Josh: Elon calling Sam Scam Altman and things of that nature, I'm going to forcibly make you stop tweeting. 169 00:10:53,490 --> 00:10:55,810 Ejaaz: So please stop. It's such a good name though. Oh, that's so good. 170 00:10:56,010 --> 00:10:59,370 Josh: Scam Altman is pretty good. But we have some updates from inside the court. 171 00:10:59,550 --> 00:11:02,790 Josh: I mean, unfortunately, again, there's no cameras, but there are a few reporters that were in there. 172 00:11:03,010 --> 00:11:06,030 Josh: They were kind of live posting as we were going throughout the course of the 173 00:11:06,030 --> 00:11:08,370 Josh: day. A few highlights from Elon being on the stand. 174 00:11:08,530 --> 00:11:11,290 Josh: He did say, and I quote, AI could kill us. 175 00:11:11,730 --> 00:11:16,990 Josh: Looting a charity will destroy charitable giving along with some other pretty strong wording. 176 00:11:17,190 --> 00:11:20,450 Josh: No one should be allowed to steal a charity. And it's, it makes sense. 177 00:11:20,650 --> 00:11:24,870 Josh: I think we're really in for fireworks because we got the witness list also. 178 00:11:25,600 --> 00:11:28,500 Josh: And the witness list is pretty good. So we have Elon and Sam, 179 00:11:28,640 --> 00:11:31,720 Josh: of course. We have Greg Brockman. And then we have Satya Nadella. 180 00:11:32,480 --> 00:11:36,240 Josh: Because for those that don't know, Satya Nadella is CEO of Microsoft. 181 00:11:36,360 --> 00:11:38,500 Josh: And Microsoft is involved in this. 182 00:11:38,880 --> 00:11:44,320 Josh: Microsoft CTO sent an email to Satya saying something to the likes that they 183 00:11:44,320 --> 00:11:51,120 Josh: are aware of OpenAI and Elon's private holdings not being happy about the changes that were happening. 184 00:11:51,220 --> 00:11:53,560 Josh: And that singular email got him dragged into this court case. 185 00:11:53,680 --> 00:11:57,020 Josh: So we're going to be seeing Satya Nadella. we are going to be seeing ilia setzkever 186 00:11:57,020 --> 00:12:00,040 Josh: ilia as everyone knows he is the founder of 187 00:12:00,040 --> 00:12:02,780 Josh: safe super intelligence now he is also one of the co-founders of open 188 00:12:02,780 --> 00:12:05,600 Josh: ai and the person who elon most fought 189 00:12:05,600 --> 00:12:11,300 Josh: over to join mira marati is listed here she is the co-founder of thinking machines 190 00:12:11,300 --> 00:12:15,640 Josh: and she is another co-founder from open ai and then we have siobhan zilis who 191 00:12:15,640 --> 00:12:19,820 Josh: is a funny one siobhan i think has four children with elon currently works at 192 00:12:19,820 --> 00:12:24,060 Josh: neural link but she was on I believe some sort of board of directors for open AI. 193 00:12:24,320 --> 00:12:27,560 Josh: And I assume there's some conflict of interest there. So it is a all-star cast. 194 00:12:27,760 --> 00:12:29,580 Josh: We will be hearing all of these as we go. 195 00:12:29,880 --> 00:12:33,320 Josh: It's going to be really exciting as we go along this court case to see how these things unfold. 196 00:12:33,820 --> 00:12:37,900 Ejaaz: I think the precedent that Elon is fighting for is interesting. 197 00:12:38,080 --> 00:12:40,880 Ejaaz: We were talking about this before we started recording, which is, 198 00:12:41,060 --> 00:12:45,420 Ejaaz: is this trial as major as it's being made out to be? 199 00:12:45,660 --> 00:12:51,040 Ejaaz: And the point is, this doesn't or won't have any recurring effect on AI as an 200 00:12:51,040 --> 00:12:55,880 Ejaaz: industry, but it will affect the philanthropic nature of America as a whole, 201 00:12:55,980 --> 00:12:57,820 Ejaaz: which is the argument that Elon is making. 202 00:12:58,000 --> 00:13:02,020 Ejaaz: He's saying, basically, if you allow companies to go from a non-profit into 203 00:13:02,020 --> 00:13:05,620 Ejaaz: a for-profit and then become the most valuable private startup in the entire 204 00:13:05,620 --> 00:13:11,900 Ejaaz: world, valued currently, the secondaries of OpenAI shares are trading for over a trillion dollars, 205 00:13:12,440 --> 00:13:17,020 Ejaaz: then you're kind of cheating the system because there are various tax benefits. 206 00:13:18,260 --> 00:13:22,880 Ejaaz: Sam Altman technically doesn't own any of OpenAI, but he is getting access via 207 00:13:22,880 --> 00:13:25,900 Ejaaz: side venture funds, which he set up earlier on, which he completely owns, 208 00:13:26,000 --> 00:13:27,240 Ejaaz: but doesn't really admit or speak to. 209 00:13:27,440 --> 00:13:30,240 Ejaaz: So there's a lot of evasion going on here. 210 00:13:30,440 --> 00:13:34,240 Ejaaz: Elon's making the point that if you allow this to happen, then it's the end 211 00:13:34,240 --> 00:13:36,300 Ejaaz: of philanthropy in America. 212 00:13:36,480 --> 00:13:39,420 Ejaaz: But to me, it also sounds like it's an ego-driven thing, right? 213 00:13:39,460 --> 00:13:44,220 Ejaaz: He doesn't like the fact that he started the company that is now way ahead of 214 00:13:44,220 --> 00:13:47,860 Ejaaz: XAI and is arguably the number one AI lab in the entire world. 215 00:13:48,020 --> 00:13:52,020 Ejaaz: And he wants some kind of benefit from that for his ego. 216 00:13:52,200 --> 00:13:57,000 Ejaaz: So I don't really know whether Elon and Sam should be fighting over this. 217 00:13:57,100 --> 00:14:01,920 Ejaaz: I think once this is done, it should just be settled. open air was always meant to be a full profit. 218 00:14:02,040 --> 00:14:05,080 Ejaaz: And I think if there wasn't such a rivalry between these two key figures, 219 00:14:05,180 --> 00:14:07,120 Ejaaz: this wouldn't even be a new story in itself. 220 00:14:07,640 --> 00:14:10,640 Josh: Yeah, that's probably right. I think because of the rivalry, 221 00:14:10,780 --> 00:14:11,980 Josh: this becomes a new story. 222 00:14:12,200 --> 00:14:17,000 Josh: And the smoking gun that Elon is using is these diary entries and the fact that it's a poor precedent. 223 00:14:17,240 --> 00:14:21,200 Josh: I don't think people will be rushing to emulate this precedent of how to set 224 00:14:21,200 --> 00:14:24,260 Josh: up a company just because of how much pain and suffering it's caused OpenAI. 225 00:14:24,600 --> 00:14:28,060 Josh: I mean, if you remember, Sam Allman got ousted temporarily. There was a lot 226 00:14:28,060 --> 00:14:31,740 Josh: of contention around his pay packages and how he gets actual equity. 227 00:14:31,940 --> 00:14:34,880 Josh: He famously claimed that he has a 0% equity stake in OpenAI. 228 00:14:35,080 --> 00:14:37,660 Josh: It seems like it's only caused them headaches and nightmares. 229 00:14:38,200 --> 00:14:41,200 Josh: And had they choose to do it again, or if any other company were to try to do 230 00:14:41,200 --> 00:14:43,420 Josh: this, they certainly would not take this route. 231 00:14:44,000 --> 00:14:48,860 Josh: But maybe we could talk about what Elon actually stands to win if he does get 232 00:14:48,860 --> 00:14:52,280 Josh: the win or what happens if he wins versus what happens if Sam wins. 233 00:14:52,420 --> 00:14:55,940 Josh: So in the worst case scenario, it's kind of, I guess in the worst case scenario 234 00:14:55,940 --> 00:14:57,660 Josh: for OpenAI, it's pretty bleak. 235 00:14:57,900 --> 00:15:04,020 Josh: Elon is looking for $134 billion, which is quite a bit. 236 00:15:04,690 --> 00:15:11,370 Josh: He would also want the conversion to be unwound. So OpenAI would turn into a nonprofit again. 237 00:15:11,690 --> 00:15:16,750 Josh: Sam Altman and Greg Brockman both would be out. The IPO that is rumored to happen 238 00:15:16,750 --> 00:15:19,430 Josh: later this year, early next year, that's off the table. 239 00:15:19,610 --> 00:15:24,730 Josh: That's not coming until at least 2028 or later. If it does, Microsoft's $13 240 00:15:24,730 --> 00:15:26,970 Josh: billion in equity is in play. 241 00:15:27,330 --> 00:15:31,090 Josh: That can mess up Microsoft and it could cause a lot of really messed up downstream 242 00:15:31,090 --> 00:15:37,090 Josh: effects that might actually stand to benefit xai spacex that whole spacex xai 243 00:15:37,090 --> 00:15:41,810 Josh: meta conglomerate thing because now one of their largest competitors is kind 244 00:15:41,810 --> 00:15:43,030 Josh: of out of the game it would be 245 00:15:43,650 --> 00:15:47,650 Josh: really detrimental to the state of ai as it relates to open ai so that's kind 246 00:15:47,650 --> 00:15:50,910 Josh: of a the bleak outlook the reality is we're not going to get that worst case 247 00:15:50,910 --> 00:15:52,210 Josh: scenario it's going to be something 248 00:15:52,210 --> 00:15:57,510 Josh: much better if he does win um but there is a lot at stake here on 249 00:15:57,510 --> 00:16:01,310 Ejaaz: On the minute chance of that happens, it's not just the end of AI, 250 00:16:01,470 --> 00:16:08,890 Ejaaz: it's the end of the entire economy of stock market that is propped up by the leading AI lab, OpenAI. 251 00:16:09,230 --> 00:16:11,990 Ejaaz: And that kind of like blew, if you want to call it a bubble, 252 00:16:12,270 --> 00:16:14,230 Ejaaz: this bubble up in the first place. 253 00:16:15,130 --> 00:16:19,970 Ejaaz: When I look at this, right, the biggest smoking gun, 254 00:16:20,970 --> 00:16:25,010 Ejaaz: for Elon, at least, is that there is no smoking gun. 255 00:16:25,250 --> 00:16:28,550 Ejaaz: His argument is kind of like, okay, you have a few good points, 256 00:16:28,670 --> 00:16:31,850 Ejaaz: but there isn't like a zinger that shuts Sam Altman down. 257 00:16:32,010 --> 00:16:35,870 Ejaaz: And therefore, the probability of all of this being unwound is minute. 258 00:16:36,390 --> 00:16:41,610 Ejaaz: Elon Musk might at best get the minimum amount of money that he put into open 259 00:16:41,610 --> 00:16:43,710 Ejaaz: air at the start, which was $44 million. 260 00:16:44,070 --> 00:16:47,690 Ejaaz: He promised up to a billion dollars, but only ended up investing $44 million. 261 00:16:47,990 --> 00:16:52,810 Ejaaz: But he was lauding that as a reason why OpenAI should pay him $134 billion. 262 00:16:53,110 --> 00:16:56,650 Ejaaz: And obviously there's a major equity stake differential between that. 263 00:16:56,750 --> 00:16:59,750 Ejaaz: So I think Elon Musk probably won't come out winning from this, 264 00:16:59,830 --> 00:17:03,910 Ejaaz: but we'll see from the trials proceeding today and over the next couple of weeks. 265 00:17:03,950 --> 00:17:05,250 Ejaaz: And we will keep you up to date on that. 266 00:17:05,510 --> 00:17:09,450 Ejaaz: You had a fun example that you wanted to share, Josh, which was this clip from 267 00:17:09,450 --> 00:17:13,950 Ejaaz: Peter Thiel commenting on the entire thing, where he basically makes the point 268 00:17:13,950 --> 00:17:17,790 Ejaaz: that whichever person I talked to last, I find the most convincing. 269 00:17:17,910 --> 00:17:19,130 Ejaaz: Can you unpack this for us? 270 00:17:19,130 --> 00:17:23,530 Josh: Yeah, he said it so well where, I mean, he's personally friends with Elon and 271 00:17:23,530 --> 00:17:25,510 Josh: Sam Alman, or at least in communications with them. 272 00:17:25,610 --> 00:17:28,950 Josh: And he was describing what it's like to talk to them about this court case. 273 00:17:29,090 --> 00:17:32,490 Josh: And when he speaks to Elon, it becomes very clear, Elon's case, 274 00:17:32,630 --> 00:17:36,550 Josh: and it makes a lot of sense where if a company is able to start as a nonprofit 275 00:17:36,550 --> 00:17:41,690 Josh: and then roll all of that into a for-profit entity, it breaks what a charitable model looks like. 276 00:17:41,790 --> 00:17:46,350 Josh: And it kind of destroys and crumbles the charitable infrastructure that we have in America. 277 00:17:46,350 --> 00:17:49,150 Josh: And then he was describing leaving that 278 00:17:49,150 --> 00:17:51,750 Josh: and feeling like okay yeah this is a pretty sound argument this makes sense and then 279 00:17:51,750 --> 00:17:54,870 Josh: going over to sam altman having a conversation with him and 280 00:17:54,870 --> 00:17:57,730 Josh: sam saying well there's actually no way we ever could have made this work 281 00:17:57,730 --> 00:18:00,450 Josh: if we stayed a non-profit we had no choice but 282 00:18:00,450 --> 00:18:03,710 Josh: to switch over to a for-profit and we did everything in our power to make it 283 00:18:03,710 --> 00:18:07,970 Josh: as i guess egalitarian as possible both of those are pretty compelling arguments 284 00:18:07,970 --> 00:18:11,510 Josh: and i think that's why everyone's kind of split on where this is going to end 285 00:18:11,510 --> 00:18:15,630 Josh: up and why you're kind of left supporting whoever you last spoke to because 286 00:18:15,630 --> 00:18:18,730 Josh: both arguments are incredibly strong and both of these things really do matter 287 00:18:18,730 --> 00:18:20,350 Josh: right like we want open act to exist 288 00:18:20,840 --> 00:18:23,960 Josh: And had they never pivoted, they wouldn't have existed. And that's probably 289 00:18:23,960 --> 00:18:28,360 Josh: a worse off future. But we also don't want them to be able to take advantage 290 00:18:28,360 --> 00:18:32,540 Josh: and create a precedence for a loophole that now a lot of other AI companies 291 00:18:32,540 --> 00:18:34,380 Josh: could possibly come in and do. 292 00:18:34,560 --> 00:18:38,600 Josh: So I just found to be a really interesting take from someone whose ideas I kind 293 00:18:38,600 --> 00:18:40,180 Josh: of trust and respect in Peter Thiel. 294 00:18:40,540 --> 00:18:44,940 Josh: And just to the point that no one really knows. And I think the judge has a 295 00:18:44,940 --> 00:18:46,620 Josh: really tough case cut out for him. 296 00:18:46,620 --> 00:18:52,080 Ejaaz: This is kind of an amazing PR campaign for Sam Ullman and OpenAI, right? 297 00:18:52,220 --> 00:18:57,180 Ejaaz: Like, I think Sam himself has been branded as this kind of like evil villainous 298 00:18:57,180 --> 00:18:59,320 Ejaaz: character for a long, long time now. 299 00:18:59,500 --> 00:19:03,100 Ejaaz: And that has been boosted by Elon Musk in large part. 300 00:19:03,360 --> 00:19:06,660 Ejaaz: And to have a court proceeding come out and basically say, hey, 301 00:19:06,940 --> 00:19:13,060 Ejaaz: Elon basically asked for the same thing back in 2017, kind of like portray Sam 302 00:19:13,060 --> 00:19:17,860 Ejaaz: as like a better faith actor. So it's really good PR for him. 303 00:19:18,060 --> 00:19:22,880 Ejaaz: The other thing I was thinking about is the strongest argument that OpenAI has, 304 00:19:23,700 --> 00:19:28,140 Ejaaz: for becoming or having become a for-profit was made by Elon Musk himself, 305 00:19:28,240 --> 00:19:29,840 Ejaaz: the guy that is fighting against it. 306 00:19:29,920 --> 00:19:32,780 Ejaaz: So like he would have to effectively, I don't know, sue himself if he wants 307 00:19:32,780 --> 00:19:35,880 Ejaaz: to make the exact argument. This is why I think this entire thing is ridiculous. 308 00:19:36,120 --> 00:19:39,620 Ejaaz: So I just think this is a hot mess. I think the brothers need to stop fighting 309 00:19:39,620 --> 00:19:41,480 Ejaaz: and band together and just get on with this. 310 00:19:41,560 --> 00:19:45,380 Ejaaz: This is a positive sum game. You see kind of like a similar rivalry between 311 00:19:45,380 --> 00:19:48,740 Ejaaz: OpenAI and Anthropic in the fact that they're each putting out models that are 312 00:19:48,740 --> 00:19:51,840 Ejaaz: leapfrogging each other every couple of weeks now at this point. 313 00:19:52,020 --> 00:19:56,220 Ejaaz: I think Elon Musk just needs to put this down, put the money and his focus on 314 00:19:56,220 --> 00:20:00,220 Ejaaz: XAI and put out a better Grok model because I want Grok to get back into the race at this point. 315 00:20:00,790 --> 00:20:04,050 Josh: Yeah, me too. I hope it's not too distracting, but I do love the fact that we 316 00:20:04,050 --> 00:20:05,430 Josh: will have entertainment guaranteed. 317 00:20:05,770 --> 00:20:09,370 Josh: And I guess we could also entertain what happens if Sam Altman wins in the best 318 00:20:09,370 --> 00:20:13,470 Josh: case scenario for OpenAI, which is, I mean, that IPO is a certainty and that 319 00:20:13,470 --> 00:20:15,910 Josh: IPO is going to be at over a trillion dollars, right? 320 00:20:15,990 --> 00:20:19,870 Josh: You were just telling me before recording that OpenAI has kind of postponed 321 00:20:19,870 --> 00:20:24,630 Josh: their current fundraising round to increase the valuation prior to raising more money. 322 00:20:24,910 --> 00:20:29,570 Josh: So the company is growing incredibly quickly. There will be nothing that slows them down. 323 00:20:29,850 --> 00:20:34,350 Josh: Microsoft is going to be locked in with no legal overhead or ramifications. 324 00:20:34,890 --> 00:20:41,850 Josh: Altman is going to maintain his role as CEO of OpenAI and XAI is going to just 325 00:20:41,850 --> 00:20:44,410 Josh: kind of continue to compete and like try to catch up. 326 00:20:44,510 --> 00:20:51,070 Josh: But it seems like there's a lot more downside for Sam than there is upside. 327 00:20:51,070 --> 00:20:55,170 Josh: And there is a lot more upside for Elon than there is downside. 328 00:20:55,510 --> 00:20:58,430 Josh: So it's a little unbalanced when it comes to the outcomes here. 329 00:20:58,610 --> 00:21:03,650 Ejaaz: Yeah, totally. But that is everything that is happening over this multi-week 330 00:21:03,650 --> 00:21:05,430 Ejaaz: culmination of this trial. 331 00:21:05,670 --> 00:21:10,690 Ejaaz: Remember, this is like pretty much at this point a decade's worth in the making of this rivalry. 332 00:21:11,190 --> 00:21:16,090 Ejaaz: So it'll be good to finally tie a bow on this. We'll be covering all the exciting 333 00:21:16,090 --> 00:21:17,030 Ejaaz: news that comes out of this. 334 00:21:17,190 --> 00:21:23,370 Ejaaz: Again, there is a current Elon taking the witness as we speak, as you listen to this. 335 00:21:23,510 --> 00:21:27,210 Ejaaz: Actually, it probably would have already happened where OpenAI's lawyer is basically 336 00:21:27,210 --> 00:21:29,530 Ejaaz: grilling him on his entire argument. 337 00:21:29,690 --> 00:21:31,730 Ejaaz: And there's going to be some spicy tastes that come out from that. 338 00:21:31,950 --> 00:21:36,330 Ejaaz: But rest assured, we will be the first podcast to cover it in great detail and give our own insight. 339 00:21:36,370 --> 00:21:38,270 Josh: EJ has an important question. Yes. 340 00:21:38,270 --> 00:21:39,130 Ejaaz: Who you got? 341 00:21:39,430 --> 00:21:40,390 Josh: Who's winning this? 342 00:21:40,910 --> 00:21:44,930 Ejaaz: I am the biggest Elon fan, but Sam's got this. 343 00:21:45,390 --> 00:21:51,370 Ejaaz: Sam's going to win this. Yeah. At minimum, I think Elon's going to get his $44 344 00:21:51,370 --> 00:21:55,530 Ejaaz: million that he originally invested in OpenAI back with zero interest. 345 00:21:55,530 --> 00:21:57,470 Ejaaz: But Sam's got this. It's a win for him. 346 00:21:58,300 --> 00:22:04,800 Josh: That seems right. I can't imagine anything close to the worst case scenario for open AI happening. 347 00:22:05,020 --> 00:22:09,380 Josh: I assume it's probably, the entire thing probably fizzles out into a whole nothing 348 00:22:09,380 --> 00:22:13,980 Josh: burger where there's just like not much that changes and Elon just like gets 349 00:22:13,980 --> 00:22:17,840 Josh: his day in the spotlight. But I don't know. We'll be following it closely. 350 00:22:18,040 --> 00:22:21,840 Josh: We will keep you posted as this trial goes along. But now you're up to date on all things. 351 00:22:21,980 --> 00:22:24,740 Josh: If you are looking for current up-to-date status, you might want to tune in 352 00:22:24,740 --> 00:22:26,140 Josh: today because it's going to get a little spicy. 353 00:22:26,840 --> 00:22:29,760 Josh: But yeah, thank you guys so much for watching as always and we will see you 354 00:22:29,760 --> 00:22:30,420 Josh: guys in the next episode. 355 00:22:30,600 --> 00:22:31,120 Ejaaz: See you guys.