Elon Musk Urges Startup to Raise $1 Billion Identifies Tesla as Cash Cow in Early Years

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  • Elon Musk, the CEO of SpaceX and Tesla, filed a lawsuit last week, to which OpenAI responded publicly on Tuesday.
  • OpenAI revealed in a rejoinder that Musk had previously stated that the company needed to raise at least $1 billion and that he and co-founder Ilya Sutskever agreed that the business should gradually “start being less open.”
  • In late 2018, Musk also expressed to the co-founders of OpenAI his belief that, “without a dramatic change in execution and resources,” the firm had little chance of beating Google’s DeepMind.

In a public response to a lawsuit filed by co-founder Elon Musk on Tuesday, OpenAI exposed what appears to be hypocrisy on the part of the now billionaire and early supporter of the business.

 

OpenAI responded by republishing previous emails from Musk, in which the CEO of SpaceX and Tesla urged the nascent company to secure at least $1 billion in funding and stipulated that it should gradually “become less open” and “not share” the company’s scientific findings with the general public.

 

The comments that have been copied mirror the very different viewpoint that Elon Musk provided when he sued OpenAI, CEO Sam Altman, and President Greg Brockman last week, claiming that they had violated contracts and engaged in unfair competition.

The inner workings of OpenAI’s GPT-4 AI model are “a complete secret except to OpenAI—and, on information and belief, Microsoft,” according to Musk’s attorneys in the lawsuit, and the secrecy is motivated by business goals rather than public safety. “We intend to move to dismiss all of Elon’s claims,” stated OpenAI.

 

At the DealBook conference hosted by The New York Times in November, Musk stated that he believed OpenAI had strayed from its initial purpose.

 

Musk declared on stage at the event that “OpenAI should be renamed’super closed source for maximum profit AI,’ because this is actually what it is.” From a “open source foundation,” he said, it has evolved into a multibillion-dollar “for-profit corporation with closed source.”

In contrast, emails from December 2018 that the business obtained show that Musk seemed to dissuade the co-founders of OpenAI from approaching financing in an overly cautious manner. He stated that unless OpenAI made a “dramatic change in execution and resources,” the startup had little hope of competing seriously with Google’s DeepMind.

 

“It is unlikely in my opinion that OpenAI will be useful to DeepMind or Google unless there is a significant shift in strategy and funding. Not even 1%. Musk sent an email to Sutskever, Brockman, and Altman, the other co-founders of OpenAI, saying, “I wish it were otherwise.” It won’t even be sufficient to raise a few hundred million. This requires billions annually right away or else forget it.

 

In addition to being the founder of Neuralink, a business that develops brain-computer interfaces, and xAI, a potential rival to OpenAI, Musk is currently the CEO of the automaker Tesla, the owner of X Corp., and the defense contractor SpaceX.

Elon Musk Urges Startup to Raise $1 Billion, Identifies Tesla as Cash Cow in Early Years

In response to his complaint, OpenAI stated that Elon “wanted majority equity, initial board control, and to be CEO” of the AI business before he departed the company. In a blog post, the startup revealed that Musk attempted to take over as CEO of OpenAI in 2017 while the company was restructuring.

 

Talent has occasionally been drawn to Musk’s businesses instead of OpenAI. Regarding xAI, Musk presents Grok, the company’s initial offering, as a rival to ChatGPT, a program developed by OpenAI.

In correspondence from January 2018, which OpenAI was able to retrieve, Musk concurs with an anonymous correspondent who urged the startup’s co-founders to depend on Tesla as their “cash cow.” Tesla reported a cash position of $3.4 billion as of the first quarter of 2018. This comes after the company posted a $2.24 billion net loss on $11.8 billion in revenue for the entire 2017 year.

 

The veracity of the emails revealed in OpenAI’s response on Tuesday, some of which had partial redactions, has not been independently confirmed by CNBC.

 

Musk’s latest lawsuit against OpenAI is centered around a “contract” that isn’t a genuine written agreement signed by all parties engaged in founding the firm.

Rather, Musk, through his lawyers, contends that the first OpenAI team had agreements to research artificial general intelligence, or AGI, as a nonprofit organization “for the benefit of humanity.” But the idea developed into a business with a convoluted organizational structure, which includes a for-profit organization that Musk claims Microsoft controls a significant portion of.

 

Musk made extensive use of his lawsuit to remind everyone of his pivotal role in founding OpenAI, which has grown to be one of the most popular firms globally as a result of ChatGPT and picture generator DALL-E becoming viral.

 

Tuesday night’s public reaction from OpenAI echoed memoranda that business officials had sent out to staff members the previous week.

Musk’s complaint and OpenAI’s reaction come after a turbulent few months for the business that included conflict in the boardroom, a new board composition, and an examination by financial authorities.

 

Following the publication of OpenAI’s answer on Tuesday night, Elon Musk’s solicitors were unavailable for comment.