Vanity Fair New Establishment Summit - Day 1

Elon Musk and Sam Altman in 2015. (Michael Kovac/Getty Images)

MUSK BEEF

OpenAI: Elon literally wanted us to be for-profit!

OpenAI brings receipts showing Musk wanted them to be for-profit before he sued them for doing just that.

12/13/24 4:30PM

“You can’t sue your way to AGI.”

That is the pointed message from OpenAI to cofounder Elon Musk that appears in a lengthy blog post today on the company’s website, the second such post to publicly push back on Musk’s legal attacks on the company.

In a post titled “Elon Musk wanted an OpenAI for-profit” the company makes the case that Musk, who has filed multiple lawsuits to stop OpenAI from altering its core structure to a for-profit business, actually wanted that structure in the first place and even filed the paperwork to do that.

Currently, the company is structured as primary nonprofit entity, with a smaller for-profit arm.

OpenAI lays out a timeline to the key events in the feud since OpenAI’s founding in 2015. The post showed the receipts in the form of text-message threads detailing Musk meetings as well as redacted emails to and from Musk that all appear to show that Musk was indeed in favor of the for-profit approach to raise the huge amounts of capital needed to build the computing infrastructure and produce the first tangible results of their efforts.

According to a reading of OpenAI’s version of events, Musk seemed to be supportive and on-board until September 2017, when the founders were discussing the equity allocation for the for-profit arm. According to the post, Musk wanted 50% to 60% ownership of the company and to be CEO.

“On one call, Elon told us he didn’t care about equity personally but just needed to accumulate $80B for a city on Mars.”

After detailing his preferred terms for the new for-profit entity, Musk told founders Ilya Sutskever and Greg Brockman in an email:

“I’ve been really impressed with the quality of discussion with you guys on the equity and board stuff. I have a really good feeling about this. “

Two days later, Musk’s agents registered a public-benefit corporation named “Open Artificial Intelligence Technologies, Inc.” in Delaware.

Sutskever responded with the OpenAI team’s concerns in an email to Musk titled “Honest Thoughts,” which did not land well with Musk. Sutskever wrote:

“The goal of OpenAI is to make the future good and to avoid an AGI dictatorship. You are concerned that Demis [presumably Nobel Prize recipient and Google DeepMind CEO Demis Hassabis] could create an AGI dictatorship. So do we. So it is a bad idea to create a structure where you could become a dictator if you chose to, especially given that we can create some other structure that avoids this possibility.”

That appeared to trigger the famously mercurial Musk, as evidenced by his curt reply:

“Guys, I’ve had enough. This is the final straw.
Either go do something on your own or continue with OpenAI as a nonprofit. I will no longer fund OpenAI until you have made a firm commitment to stay or I’m just being a fool who is essentially providing free funding for you to create a startup.
Discussions are over.”

The post goes on to detail more examples of Musk supporting the for-profit model and urging the company to raise vast sums of capital as quickly as possible. In January 2018, Musk suggested rolling OpenAI into publicly traded Tesla, offering the company a $1 billion budget, which Altman and the others were opposed to.

While things appeared chilly heading into 2018, Musk still communicated with Sam Altman and the others, casting doubt on their chosen path forward. Musk wrote to the OpenAI team:

“My probability assessment of OpenAI being relevant to DeepMind/Google without a dramatic change in execution and resources is 0%. Not 1%. I wish it were otherwise.
Even raising several hundred million won’t be enough. This needs billions per year immediately or forget it.”

After Musk saw OpenAI’s fundraising achieve a valuation of $20 billion, Musk was angry. In a text to Altman, Musk said that he provided the bulk of the seed funding for OpenAI and was left without any equity (which OpenAI says he declined).

“This is a bait and switch,” Musk wrote.

A few months later, Musk founded his OpenAI competitor, xAI, and cosigned a letter calling for an industry-wide pause on AI development.

More Tech

See all Tech

Rani Molla5h

Apple to pay Google $1 billion a year for access to AI model for Siri

Apple plans to pay Google about $1 billion a year to use the search giant’s AI model for Siri, Bloomberg reports. Google’s model — at 1.2 trillion parameters — is way bigger than Apple’s current models.

The deal aims to help the iPhone maker improve its lagging AI efforts, powering a new Siri slated to come out this spring.

Apple had previously been considering using OpenAI’s ChatGPT and Anthropic’s Claude, but decided in the end to go with Google as it works toward improving its own internal models. Google, which makes a much less widely sold phone, the Pixel, has succeeded in bringing consumer AI to smartphone users where Apple has failed.

Google’s antitrust ruling in September helped safeguard the two companies’ partnerships — including the more than $20 billion Google pays Apple each year to be the default search engine on its devices — as long as they aren’t exclusive.

Apple Plans to Use 1.2 Trillion Parameter Google Gemini Model to Run New Siri

Rani Molla5h

Netflix creates new made-up metric for advertisers

It’s not quite WeWork’s community-adjusted EBITDA, but it’s also not quite a real number: Netflix announced today that it has 190 million “monthly active viewers” for its lower-cost ad-supported tiers. The company came up with the metric by measuring the number of subscribers who’ve watched “at least 1 minute of ads on Netflix per month” and multiplying that by what its research assumes is the number of people in that household.

It builds on Netflix’s previous attempt at measuring ad viewership with monthly active users, which is the number of profiles that have watched ads (94 million as of May). The MAV measurement, of course, is a lot bigger, and bigger numbers are more attractive to advertisers, who are spending more and more on streaming platforms.

“After speaking to our partners, we know that what they want most is an accurate, clear, and transparent representation of who their ads are reaching,” Netflix President of Advertising Amy Reinhard explained in a press release. “Our move to viewers means we can give a more comprehensive count of how many people are actually on the couch, enjoying our can’t-miss series, films, games, and live events with friends and family.”

Netflix last reported its long-followed and more easily understood paid membership numbers at the beginning of the year, when it crossed 300 million.

Netflix’s Third Season of Ads and a Look Ahead at What's Next - About Netflix

Netflix last reported its long-followed and more easily understood paid membership numbers at the beginning of the year, when it crossed 300 million.

Rani Molla7h

Ahead of Musk’s pay package vote, Tesla’s board says they can’t make him work there full time

Ahead of Tesla’s CEO compensation vote at its annual shareholder meeting tomorrow, The Wall Street Journal did a deep dive into how Elon Musk, who stands to gain $1 trillion if he stays at Tesla and hits a number of milestones, spends his time.

Like a similar piece from The New York Times in September, this one has a lot of fun details. Read it all, but here are some to tide you over:

Musk spent so much time at xAI this summer that he held meetings there with Tesla employees.
He personally oversaw the design of a sexy chatbot named Ani, who sports pigtails and skimpy clothes and for whom “employees were compelled to turn over their biometric data” to train.
The chatbot, which users can ask to “change into lingerie or fantasize about a romantic encounter with them,” has helped boost user numbers, which are still way lower than ChatGPT’s.
Executives and board members have told top investors in the past few weeks that they can’t make Musk work at Tesla full time. Board Chair Robyn Denholm explained that in his free time, Musk “likes to create companies, and they’re not necessarily Tesla companies.”

Tesla Is Obsessed With Musk’s Pay Package. Musk Is Obsessed With AI.

Like a similar piece from The New York Times in September, this one has a lot of fun details. Read it all, but here are some to tide you over:

Musk spent so much time at xAI this summer that he held meetings there with Tesla employees.
He personally oversaw the design of a sexy chatbot named Ani, who sports pigtails and skimpy clothes and for whom “employees were compelled to turn over their biometric data” to train.
The chatbot, which users can ask to “change into lingerie or fantasize about a romantic encounter with them,” has helped boost user numbers, which are still way lower than ChatGPT’s.
Executives and board members have told top investors in the past few weeks that they can’t make Musk work at Tesla full time. Board Chair Robyn Denholm explained that in his free time, Musk “likes to create companies, and they’re not necessarily Tesla companies.”

Jon Keegan8h

Motion Picture Association to Meta: Stop saying Instagram teen content is “PG-13”

In October, Meta announced that its updated Instagram Teen Accounts would by default limit content to the “PG-13” rating.

The Motion Picture Association, which created the film rating standard, was not happy about Meta’s use of the rating, and sent the company a cease and desist letter, according to a report from The Wall Street Journal.

The letter from MPA’s law firm reportedly said the organization worked for decades to earn the public’s trust in the rating system, and it does not want Meta’s AI-powered content moderation failures to blow back on its work:

“Any dissatisfaction with Meta’s automated classification will inevitably cause the public to question the integrity of the MPA’s rating system.”

Meta told the WSJ that it never claimed or implied the content on Instagram Teen Accounts would be certified by the MPA.

Exclusive | Motion Picture Trade Group Pans Instagram’s Use of ‘PG-13’ With Cease and Desist

“Any dissatisfaction with Meta’s automated classification will inevitably cause the public to question the integrity of the MPA’s rating system.”

Meta told the WSJ that it never claimed or implied the content on Instagram Teen Accounts would be certified by the MPA.

Rani Molla9h

Dan Ives expects “overwhelming shareholder approval” of Tesla CEO pay package

Wedbush Securities analyst Dan Ives, like prediction markets, thinks Tesla CEO Elon Musk’s $1 trillion pay package will receive “overwhelming shareholder approval” at the company’s annual shareholder meeting Thursday afternoon. The Tesla bull, like the Tesla board, has maintained that approval of the performance-based pay package is integral to keeping Musk at the helm of the company, which in turn is integral to the success of the company. Ives is also confident that investors will back the proposal allowing Tesla to invest in another of Musk’s companies, xAI.

“We expect shareholders to show overwhelming support tomorrow for Musk and the xAI stake further turning Tesla into an AI juggernaut with the autonomous and robotics future on the horizon,” Ives wrote in a note this morning.

The compensation package has received pushback, including from Tesla’s sixth-biggest institutional investor, Norway’s Norges Bank Investment Management, and from proxy adviser Institutional Shareholder Services.

Latest Stories

Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, or Robinhood Money, LLC.