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.

Rani Molla40m

Elon Musk’s SpaceX reportedly in talks to merge with xAI

Tesla CEO Elon Musk is reportedly exploring a merger between SpaceX and his artificial intelligence startup xAI, a move that would bundle rockets, satellites, the social media site X, and AI under one company ahead of SpaceX’s long-anticipated IPO.

According to Reuters reporting, the deal would swap xAI shares for SpaceX stock, potentially valuing the combined operation north of $1 trillion.

Reuters reports:

Two entities have been set up in Nevada to facilitate the transaction, the person said.

Reuters could not determine the value of the deal, its ‌primary rationale, or its potential timing.

Corporate filings in Nevada show that those entities were set up on January 21. One of them, a limited liability company, lists SpaceX and Bret Johnsen, the company's chief financial officer, as managing members, while the other lists Johnsen as the company's only officer, the filings show.

The combined companies could also set the narrative groundwork for putting data centers in space — an idea that Musk and a number of other tech billionaires have been floating lately but that may not get off the ground.

In its earnings filings yesterday, Tesla disclosed that it recently made a $2 billion investment in xAI. Last year Musk’s xAI bought Musk’s X in an all-stock deal.

Exclusive: Musk's SpaceX in merger talks with xAI ahead of planned IPO, source says

Reuters reports:

Two entities have been set up in Nevada to facilitate the transaction, the person said.

Reuters could not determine the value of the deal, its ‌primary rationale, or its potential timing.

Corporate filings in Nevada show that those entities were set up on January 21. One of them, a limited liability company, lists SpaceX and Bret Johnsen, the company's chief financial officer, as managing members, while the other lists Johnsen as the company's only officer, the filings show.

In its earnings filings yesterday, Tesla disclosed that it recently made a $2 billion investment in xAI. Last year Musk’s xAI bought Musk’s X in an all-stock deal.

Translating Microsoft’s CEO Satya Nadella

Translating Nadella’s jargon to understand his strategy for meeting intense demand for AI computing.

Jon Keegan60m

Rani Molla2h

Driverless Waymo struck a child near school in California

A Google Waymo struck a child near a Santa Monica elementary school during morning drop-off last week, as self-driving cars by Waymo, Tesla, and others continue their expansion across the country. In a blog post, Waymo said the fully driverless car detected the child as they emerged from behind a parked SUV, braked sharply, and reduced speed from approximately 17 mph to under 6 mph before striking the child. The child suffered minor injuries and walked away.

The company reported the incident to the National Highway Traffic Safety Administration, which is currently investigating, adding fresh scrutiny to how robotaxis perform in the wild.

Jon Keegan4h

Digging into Microsoft’s cloud backlog

Microsoft’s Azure cloud computing unit is seeing huge demand. In yesterday’s second-quarter earnings call, Microsoft CFO Amy Hood said the company’s commercial bookings increased 230% thanks to large commitments from OpenAI and Anthropic and healthy demand for its Azure cloud computing platform.

Hood said that the company’s “remaining performance obligations” (RPO) ballooned to a staggering $625 billion, up 110% from the same period last year. How long will it take for Microsoft to fulfill these booked services? Hood said the weighted average duration was “approximately two and a half years,” but a quarter of that will be recognized in revenue in the next 12 months.

Shares of Microsoft tanked today, down over 11%, despite the strong beat on revenue and earnings. The drop puts the stock on track to have its worst single-day drop since March of 2020.

Investors may be concerned that while huge, that extra demand was coming only from OpenAI, an issue that Oracle recently experienced.

But Hood said the non-OpenAI RPO still grew 28% year on year, which reflects “ongoing broad customer demand across the portfolio.”

Meta and Tesla are funding the future with their core businesses — but only one of them is still growing

The two tech giants, on back-to-back earnings calls, made it sound like they’re selling the same AI-powered future. But the picture of the underlying businesses, and how they’re using AI to furnish current sales, couldn’t be more different.

Rani Molla4h