Everyday AI Podcast – An AI and ChatGPT Podcast - EP 221: What the Elon Musk vs. OpenAI lawsuit actually means

Episode Date: March 5, 2024

Awesome Stuff From Our Partner, NVIDIA -Register for the FREE virtual NVIDIA GTC Conference or buy tickets to the in-person event and fill out this form here: https://www.youreverydayai.com/nvidia-giveaway/Awesome Stuff From Our Partner, Taplio -We're giving away a free YEAR of Taplio, our favorite AI-powered tool to grow on LinkedIn. ENDS tomorrow!Sign-up info here:https://www.youreverydayai.com/our-secret-to-linkedin-success-taplio-for-growth/Elon Musk is suing OpenAI and accusing the company of abandoning its mission in putting the public before profit. Does Elon have a point? Or is this just some useless drama? We're diving in and taking a look. Newsletter: Sign up for our free daily newsletterMore on this Episode: Episode pageJoin the discussion: Ask Jordan questions on Elon Musk vs OpenAIRelated Episodes:Ep 181: New York Times vs. OpenAI – The huge AI implications no one is talking aboutUpcoming Episodes: Check out the upcoming Everyday AI Livestream lineupWebsite: YourEverydayAI.comEmail The Show: [e-mail] with Jordan on LinkedInTimestamps:02:35 Daily AI News03:41 Tech companies prioritize responsible AI development and use.08:49 Elon Musk raises valid points in lawsuit.11:36 OpenAI 2015 founding, Musk's 2018 departure.15:34 AI-powered suite discovers trending topics, creates content.17:24 OpenAI has multiple layers and investments.21:27 Elon Musk claims OpenAI breached founding agreements.25:08 NVIDIA's GTC AI conference, giveaway, new model.29:09 Elon Musk attacks Google and AI.30:31 Elon Musk's lawsuit seeks to hinder competition.34:34 OpenAI's public benefit argument is flawed.37:23 Investment in profit-making ventures requires secure agreements.Topics Covered in This Episode:1.  Elon Musk's Lawsuit Against OpenAI2. Background and Changes in OpenAI3. Implications of OpenAI's Shift in Focus4. Reactions and Predictions on the LawsuitKeywords:Elon Musk, OpenAI, lawsuit, for-profit, closed source, artificial general intelligence, profit over humanity, tech companies, responsible AI development, AI startup, Anthropic, Cloud 3 series, AI models, Opus, GPT technology, Microsoft, Google Gemini, Access GPT, non-profit, Jordan Wilson, PR stunt, donatation, corporate structure, 501c3 nonprofit, LLCs, LPs, subsidiaries, breach of contract, GPT-4, NVIDIASend Everyday AI and Jordan a text message. (We can't reply back unless you leave contact info) Start Here ▶️Not sure where to start when it comes to AI? Start with our Start Here Series. You can listen to the first drop -- Episode 691 -- or get free access to our Inner Cricle community and all episodes: StartHereSeries.com Also, here's a link to the entire series on a Spotify playlist. 

This is the Everyday AI Show, the everyday podcast where we simplify AI and bring its power to your fingertips. Listen daily for practical advice to boost your career, business, and everyday life. Meet Firefly AI Assistant, now live in Adobe Firefly, the All In One Creative AI Studio. Just describe what you want to create and the assistant handles the rest, orchestrating multi-step workflows across Photoshop, Premiere Express, and more in one conversational interface. You direct the outcome. The assistant accelerates execution. Elon Musk is suing open AI,

accusing the company of abandoning its open mission in putting profit before the public. Does Elon Musk have a point? Or is the lawsuit a joke? Or is it maybe a combination of those two things? All right, we're going to be going over that today and more on everyday AI. What's going on, y'all?

Welcome. Thanks for listening. Thanks for tuning in. This is Everyday AI. If you're brand new here, we do this every single day, every weekday at least, and this show is for you. It's a daily live stream podcast and free daily news that are helping everyday people like you and me, not just learn what's going on in the world of AI, but how we can all actually leverage all of this, how we can make sense of what's going on in the generative AI world around us and take that to grow our companies and to grow our careers. So if you're listening on the the podcast. Thank you for tuning in. As always, make sure to check out the show notes, some special things in there that you're not going to want to miss. But let's go ahead and

talk about real quick about this thing with Elon Musk. I'm extremely interested. And if you are joining us live, I want to hear from you. So thanks for joining us to some of our live crew, Tara from Nashville and Brian from Minnesota and Jay, what's going on? other, other Brian from from South Mississippi. I want to hear from you all, what do you make of Elon Musk suing open AI? All right. So before we get into that, I just got to let you know. You've got to go to your everyday AI.com. Sign up for the free daily newsletter. We're going to be recapping today's show, a lot that we can't even get to. Yeah, even in longer show. There's, there's a lot that we can't get to. As well as I tell people, it is like a free generative AI university on our website. More than 200,

I think we're at like 220 episodes now. So you can go back and listen to every single podcast, watch every single live stream, read every single newsletter. No matter what you care about, we have it on our website. If you want to learn about AI in sales or AI in entrepreneurship, AI in writing, it's all on our website categorized, waiting for you to grow. All right. So before we get into this topic of Elon Musk, and I do want to hear from our live stream audience, but let's go ahead and talk about what's going on in the world of AI news. All right. So first, Wix is bringing AI websites to its users.

All right. So Wix's new AI website builder allows users to create web pages for free with the option to upgrade for advanced features like accepting payments. So prices for Wix premium plans range from $17 a month for the light plan to $159 for the business elite plan. So this new AI website builder uses models like Dahl Lee and OpenAIs chat GPT for the image and. text creation. So users can create a new website simply by clicking on the Create with AI button answering a few questions posed by the chatbot and then boom, you get a website. Is it any good? I don't know. I think these vary, but the AI does generate this website within seconds and then it can be further customized in conventional ways. So yeah, just because you use an AI, the generator from Wix doesn't mean you can't go in and change spellings or, you know, update images.

etc. All right, our next piece of AI news is more responsible AI development on the way. So tech companies, including Open AI, hugging face, Salesforce, etc., have signed an open letter emphasizing the need for responsible development and use of AI to maximize its benefits and mitigate potential risk to society. Interesting timing on this one from OpenAI being one of the main leaders in this letter right after this lawsuit from Elon Musk. We're going to get back to it. second, but the development of AI has been a, obviously a hot topic of both excitement and concern in the tech industry, with leaders recognizing its potential for improving human life, but also acknowledging its potential dangers. So this letter from big tech here compares the impact of AI

to other significant innovations throughout history, stressing the need for thoughtful decision-making in order to ensure the greatest benefits. All right, last but not least in AI news, Claude 3 is here in Anthropic. says it's more powerful than GPT4. All right, so AI startup Anthropic launched its Claude III series of AI models, featuring Opus as the most capable AI system on it on the market, according to its own internal benchmarking. So this new lineup from the Claude 3 family includes Opus,

which is the most powerful, then Sonnet, which is kind of the middle model, and then Haiku, which is geared towards, you know, all that these are kind of geared towards different tasks, but think it's kind of like, you know, good, better, best, right, if you want to say with Opus at the top of the line. So the models have advanced reasoning and visual capabilities, but the company acknowledges biases and the difficulty in achieving perfect neutrality. So all these models do support image input, enhancing capabilities for tech recognition and images and complex data extraction. In its own internal testing, like I just talked about Cloud's premium or the top model, Opus, from Claude 3, surpass both OpenAI's GBT4 model

and Gemini's Ultra model for common benchmarking that we talk about on the show a lot, MMLU benchmarking, so I got the highest score. So I actually did two separate reviews of this already. So we'll put those in the newsletter, did an accidental 30-minute review and then a quick little 10-minute review. So if you want our takes on it, completely different looks. make sure to check that out in the newsletter. All right, a lot of AI news today. So let's just get straight back to the point. It is Hot Take Tuesday. Let's talk about this. And if you are joining me live, it's Hot Take. How hot should I go? How hot should I go? Let me know. But here's the thing, y'all. I know so many of you. So many of you adore Elon Musk, right? If you follow AI, if you're a tech

enthusiast, you probably really like what Elon Musk is doing, right, between Tesla and, you know, X or Twitter, whatever you want to call it, Grock, its new chatbot, right? So, so many great things that Elon Musk is doing. So try to take that out of it, all right? And we're just going to be looking today at this Elon Musk suing open AI. And let me know. All right, Brian says a couple flame emojis. He wants it hot.

So let me know, I guess I don't want to offend people. I don't want to offend people because I know people love Elon Musk, right? I'm not like that. You know, I'm not following any one tech leader and saying, oh, this person's great. So I want to get my own lack of biases or lack of preferences out of the way. I have no horse in this race. You know, it's not like I'm a fanboy of Elon Musk or, you know, really against him. But you just got to get that out of the way.

All right. So, hey, Justin says, Inferno, all right? Brock, what's going on? Brock says, I'm the guy that asked Elon Musk in a Twitter audio room a week ago about neuralink updates. All right. Well, hey, let us know what those were. So, all right, here we go.

Let's start with what's actually going on here. And I'm going to cut straight to the chase. All right. So here's the overview of what's going on. So Elon Musk has filed a lawsuit against OpenAI and its CEO, Sam Altman, accusing them of prioritizing profits over the benefit of humanity. All right. So this lawsuit claims that Open AI, which is technically still a nonprofit, but it was once a much more kind of nonprofit focused on developing AI for the benefit of humanity.

So now Elon Musk in the lawsuit is alleging that Open AI has now become a closed source for profit company and more or less a subsidiary of Microsoft. All right. So Musk is also a founding board member of Open AI. And, you know, according to almost all reports, was a very important piece of Open. an AI getting off the ground. And Musk in the lawsuit alleges that the organization is now developing AGI artificial general intelligence for profit and kind of keeping it secret rather than using it for the benefit of humanity. All right. So that's that's the overview. That's the overview. All right. Well, hey, since, since Mike Forgey says he wants to see the flames,

I'll just come out and say it. All right. So two things can be true here with this lawsuit. All right. So Elon Musk, he has valid points, right? His overall sentiments and his overall thoughts on this Open AI lawsuit and saying how they, you know, are no longer, you know, a nonprofit and going against its original mission and, you know, maybe keeping some, you know, AGI, you know, close to the best in the, in the lawsuit talks about Q-star kind of, you know, what this reported, you know, breakthrough in artificial general intelligence from Open AI. So that can be true, right? That the basis of the lawsuit can be true.

But it is also an absolute joke. This lawsuit is a joke. It is a, I think, nothing more than a PR stunt. All right? And both of those things can be true, y'all. I'm going to dive into it, right? And we're going to look at it, kind of break down the lawsuit and go over some of the history of Open AI.

but both of those things can be true. And I don't think anyone's talking about this. People are either saying, oh, you know, Elon's going to burn, you know, open AI and, you know, shut them down. No. That's, like, if that's what you think, I don't think you have a firm understanding of what's going on here, we're going to be going over that. But he can make points. But you can also see that this is an absolute joke, joke of a lawsuit. I am not a, I'm not a legal scholar.

I'm not a lawyer. I did not talk to my lawyer before going on this show and being like, hey, what do you think of this? No, read plenty of legal opinions on this already. People are already, you know, giving their take. And you don't have to even read that to understand that this lawsuit is an absolute joke. It is meritless, all right? From a legal perspective, right? Again, I wanted to start by saying this.

Just give you what we're going to be talking about. Both things can be true. Elon Musk can be making good points, but it can be. and also be completely without merit. All right. So, hey, I agree with what Jonathan said here, right? This is at the heart of it. So they have to, talking about Open AI,

they have to at some point make money. Yes, absolutely. All right. So let's get some facts, y'all. All right. I got a little bit of the hot take out of the way. I'm probably going to, you know, muster up another flame emoji or two. But let's get the timeline here.

All right, so this is very important. All right. And if you are listening on the podcast, I have some slides up on the screen, but I don't think you need to come back and watch the video. We're going to be going over these slides mostly. All right. So in 2015, Open AI was founded with a founding agreement that said Open AI was meant to be public.

All right? Pretty simple. And then in 2018, I mean, we're skipping a lot here. There's a lot going on, but we're going high level. All right. In 2018, Musk leave his post as the co-founder of OpenAI and reportedly donated more than a hundred million. Or maybe it was 50 million.

So originally, you know, hey, it's Open AI was a nonprofit. You know, Musk is a co-founder and early kind of quote unquote investor. But when you're investing in a nonprofit, and we're going to get to this in a minute here, right, it was a 501c3. So when you are giving money to a 501c3, from a legal perspective, you are doing it without expecting anything in return, especially a financial gain. All right. So early on when Musk was investing this money, opening I was a nonprofit. And that was all.

They had no other corporate structure, which we're going to get to here in a minute. All right. But here's why I have a couple different numbers. Did he put in $100 million? Did he put in $50 million? Well, even his own story has changed over the years. So originally he said 100 million. And then in a later interview, he said, oh, it's 50 million.

But, you know, recent reports said it might have been like 15 million. You always got to follow the money. The money is usually the heart of where these disagreements lie, right? This isn't some altruistic, you know, lawsuit by Elon Musk. Absolutely not. If you think that that's what this is about. If you think the lawsuit is about, oh, Open AI is putting private over the public. No, that's not what this is about.

This is about money. It's always about money. It's always about money. But, all right, so 2015, OpenAI founding agreement. All right. It said Open AI was meant to be for the good of humanity in public, right? Also, 2018, Elon Musk leaves, but after reportedly investing a lot of money. All right.

And then from 2019 to 2023, Open AI changed its corporate operating structure a lot. And y'all, this is a super confusing, super confusing operating structure, right? For a company that is doing the amount of revenue that Open AI is doing right now, but technically the parent arm is a nonprofit, right? So it's extremely confusing and we're going to be going over that. But, I mean, you have to keep in mind. Open AI already has annualized revenue of nearly $2 billion was the last report from like two months ago.

So yes, they're making money. Can a nonprofit make money? Absolutely. Should it be doing it in the way that maybe Open Eye was originally set up? I don't know. But more on that in a second. All right. So there's our timeline in terms of Elon Moss's involvement.

So early on, founding member, all right. Then a couple of years later, leaves his post after, you know, reportedly donating a lot of money. And then we have a lot of changes in the legal structure. And then as of, you know, this week, 2024, he's suing Open AI. All right. So, Adobe just introduced an entirely new way to create, bringing the power and precision of its creative suite into one conversational experience.

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All right. So this one is a little tricky. All right. And we're going to go quick. So essentially, when Open AI was founded in 2012, 2015, it was a 501 C3 nonprofit, and it still technically is. And again, Musk was a co-founder. All right. And then, like I said, from 2019 to 2023, there's a lot of updates in the corporate structure. I'm going to try to read some of these. And this is not all of them. All right.

I do not have time literally, even in a long podcast, to read this. But this is mainly what's happening here. All right. So Open AI added a separate LLC and a holding company as a capped profit subsidiary. So it can control. controls a separate LLC. So the nonprofit, OpenAI, the 501C3, controls a separate LLC called OpenAI GP LLC. And that's the capped profit subsidiary. All right. Then there's another LP, which is called OpenAILP. Also underneath it is a holding company that it's the majority owner in. All right? So there's already multiple layers. And then you also have underneath that as well, OpenAI Global LLC. And that is reportedly the entity that Microsoft has invested at least between $11 and $13 billion into that entity.

All right. So essentially to oversimplify this, and again, I'm not a lawyer. I'm not a, you know, corporate, you know, corporate, you know, hierarchy, structure, you know, but here's what's happening. You still have Open AI at a score is a 501c3 nonprofit. But they essentially set up all these kind of companies underneath that have different missions, different missions, different governance as well. And a lot of these are for-profit, right? So they are for-profit LLCs. And essentially, Open AI has ownership or different ownership control of these

different entities that they technically own under the umbrella of the Open AI, which is the 501c3. Extremely confusing. I don't know of any other nonprofit that is set up to this extent. Are there other nonprofits that have multiple subsidiaries? Absolutely. Are there ones with this kind of complexity as Open AI has? I don't know. But it is extremely, it is extremely difficult to understand unless you are a corporate structure attorney. But what's important to see here is let's look at current day. Microsoft has invested somewhere between $11 billion and $13 billion. The difference is they reportedly made this investment into OpenAI Global LLC, which is not a nonprofit. Originally, when Elon Musk was investing money anywhere between $15 million and $100 million,

it was when Open AI didn't have all these other subsidiaries. It was just a 501c3 nonprofit. And when you give or quote unquote, invest, donate, whatever you want to say, when you give money to something that is just a nonprofit, a 501c3, you don't have any ownership stake, and you also, in theory, from a legal perspective, do not or should not expect anything in return. All right? So there's a little bit on the corporate structure. Now, yeah, hey, Brian, thanks for this comment. So Brian saying nonprofit orgs can have a social enterprise arm. So that isn't at all surprising. Absolutely. Yes. And it's very, actually, I won't say normal.

You know, I worked in a nonprofit for 10 years, so I am familiar with that. A lot of nonprofit. have social enterprise arms, you know, and they might have one kind of, you know, for-profit subsidiary, very rarely do you have a handful of separate LLCs or LPs underneath a 501 C3 nonprofit? It's pretty rare. But yes, a lot of times nonprofits do have a social enterprise arm to help drive profit or drive revenue. All right. So now let's get to the heart. Let's get to the heart of Elon Musk's arguments. All right. And again, get your questions in. If you do have questions, I'm going to try to get them as I see them or takes them at the end. All right.

So here's what is at the heart of Elon Musk's arguments. So number one, it gets to the founding agreement. All right. So the lawyers claim that Musk Altman and Brockman agreed to form a nonprofit AI lab that would develop AGI artificial general intelligence for the benefit of humanity, not for a for-profit company. And that would be open-sourced balancing only safety requirements. or safety considerations.

So they also cite this certificate of incorporation and other written communications as evidence of this agreement. All right. So long story short, the lawyers are saying, hey, they made this as a nonprofit that if they built AGI, artificial general intelligence, that's essentially when these AI systems become smarter than the average human at general tasks.

And they don't necessarily need humans anymore, right? And they become smarter than us. That's kind of where we're close to, right? So Elon Musk makes a lot of arguments here about he says, hey, with GPT4, we're already kind of seeing that. You know, the lawyers reference QSTAR, which is this kind of reported, you know, or alleged, you know, project or entity that Open AI has. This QSTAR, it was never public, you know, just a lot of internal reporting. But saying that this QSTAR, whether that is, you know, the current code, name of GPT5, whatever you want to say. But, you know, Elon Musk and lawyers are saying that,

hey, Open AI has AGI already. And hey, when we, you know, started in this founding agreement, that that isn't what this was about. All right. So that's argument number one. Argument number two. So the breach of, a breach of founding agreement. All right. So the lawyers allege, so Musk and his team allege that Altman, Brockman, and Open AI violated the founding agreement by keeping GPD4's design secret licensing exclusively to Microsoft in allowing Microsoft to exert undue influence and control over OpenAI's nonprofit activities and AGI development. So also, like I just mentioned there, it alleges that we already have AGI in GPD4 and QSTAR, but Open AI is keeping it closed and for-profit.

So Musk and legal team also accuse Open AI of staging a board coup to reinsest. State Altman as CEO after he was fired for lack of kind of candid reportedly. All right. So that's number two. Number three, the other kind of big main arguments in this lawsuit. And again, I haven't read the whole lawsuit. It's fairly long. I've read through a good chunk of it, but we will be linking it in the newsletter if you want to read it for yourself. All right. So the third main point here. All right. So the damages and remedies sought by Musk. So the lawyers assert that

Musk has suffered damages as a result of the breaches of the founding agreement and that he is entitled to specific performance of the contractual obligations as well as declaratory and injunctive release accounting and attorney feats. They also demand a jury trial. All right. So essentially they're saying, hey, open AI is only at this point because of Elon Musk and he suffered damages. That means money. Right. So they're saying, hey, Open AI was a nonprofit and early on was not focused on generating revenue. And now they are running as a for-profit company. And they are generating a lot of revenue. And our client, Elon Musk, deserves a big piece of that pie. All right. And here's why that is more or less a joke. Well, all right. After, after some free stuff

from our partners. We're getting these inbuilt partner, partner ads here for you. All right. So as a reminder, we're going to get back to why this is a joke here in a second. But it is the last day. Today is the last day that you can sign up for Tapleo and win a free year of Tapleo. All right. So they sponsored our newsletter last week, but I wanted to remind you, it is the last day. So if you use my code to sign up every day, so E-V-E-R-Y-D-A-Y, all one word, you can get a month of Tapleo for a dollar. All right.

Then I'll put this in the newsletter. You can just reach out. send me a screenshot that you signed up using my code. And we're going to be giving away a free year. Yes, a free year of Tapleo, a tool that I absolutely love to grow my presence on LinkedIn. So make sure you check that out in the show notes. All right. And then, hey, we're going to be at the Nvidia San Jose conference.

So, Nvidia has their GTCAI conference coming up March 18th to March 21st. So we're partnering with Nvidia. Yes, that Nvidia, the third. largest company in the United States by market cap. And we're also giving away an Nvidia G-Force GPU. Yesterday, I showed it up here on the show. So if you want to use as an example, that new Nvidia local model, chat with RTX, which I am very excited to use.

I can't even use it right now because I don't have one of these chips. But if you have a Windows machine, now you can put this chip in there and run this new Nvidia model that I think early reviews are coming in. that it's extremely powerful. So for that, all you got to do is check out the show notes or the newsletter. We're going to have, all you got to do is just even register for the free virtual conference. All right, fill out a little form on our website. I think only a handful of people did it yesterday.

So if you do it now, you've got a great chance. So make sure you check that out in the newsletter as well. And also sign up for the free virtual conference, right? Invidia is really powering the future of generative AI. You can sign up for the free conference and see what all these executives, not just from Nvidia, but from other big companies like meta, you know, companies from all over the spectrum are going to be at this conference and you can watch it all live for free and enter to win a GPU. All right. Now, back to the good stuff. Here's why this lawsuit is more or less a joke.

All right. So Elon is doing this for personal reasons, y'all. Here's a thing. And, hey, someone said a lot of flame emojis. All right. So here's, here's some of the, delivering on the flame emojis a little later. This is not a real lawsuit. No one is taking this seriously. If you've read this or have read about it or, you know, are a lawyer, again, I'm not a lawyer. I have no legal background, but no one is taking this lawsuit seriously. All right.

This is more about Elon's personal ambitions and competing products. All right. So, so here's here's what we have to. get to. It gets down to two things. This donation, right, this money that Elon Musk initially, quote unquote, invested into a nonprofit, right? You can't invest money into a nonprofit. When you give money to a 501c3, you shouldn't have an expectation of getting anything out of it. All right. And hey, guess what else? And we're going to get to that. There was no contract. There was literally no signed agreement, right? So this is now after the fact, you know, there's probably probably should

have been some better paperwork going on back in 2015 on, hey, what would happen if this nonprofit, if this 501C3 nonprofit becomes one of the biggest companies in the world, right? What happens if this company is doing billions in revenue and is no longer operating really like a nonprofit? All right. So you got to go back to the money. This is what this is ultimately about. And competition. Y'all, people aren't talking about this. But look what Elon Musk has been doing the last week.

Actually, longer than the last week, but he's really ramped it up the last week or two. He is attacking any competitor. So, right? So obviously Elon Musk owns the company formerly called Twitter. I still call it Twitter or Axe, right? And what does Axe have? its own chat GPT competitor in GROC, right, which I told everyone all along was going to amount to absolutely nothing, right? And I think that Elon Musk is probably seeing the writing on the

wall that Brock is not bringing in all this extra revenue. I'm sure he might tell you otherwise, but it's about the competition. So Elon Musk, this is what he's been doing. Google recently, Elon Musk has been attacking Google, right? We saw with the AI images coming out of the imagine, you know, kind of platform inside Google Gemini, Musk attack them, right? Musk was attacking Google search results, you know, saying that they were, you know, biased or woke, right? So that's what Elon Musk is throwing out there all the time. So he is literally attacking any large company, Google, Microsoft, Open AI, he is doing

this relentlessly, right? So he, you know, if you're asking me, Elon Musk wants these, you know, Google's Gemini to shut down for a couple of days or a week. He wants there to be some sort of injunction with OpenAI and Microsoft because he stands to benefit. All right. He stands to benefit. So we're not just talking about X or GROC, you know, Elon Musk, chat, GBT, competitor, right?

But he has X AI. He's starting an entire AI company. And he wants to be in this space, right? And then look what else. You have the Tesla bot, right? Tesla has their Tesla bot, the optimist. which is, you know, one of the top three competitors in the space. Guess what else?

One of the biggest competitors in that space is Figure. Guess who the biggest investors in Figure are? Microsoft and OpenAI. They're two of the biggest investors, right? So is this lawsuit real? I don't think so. There's literally no contract. There's no contract.

And we're going to get to that. We're going to dive into this. specifics here, right? There is zero contract. This is about money and it is about competition, right? And by dragging down the competition and, you know, filing lawsuits, this is not the first lawsuit. Elon Musk has filed. But by filing all these lawsuits, he hopes to slow down the progress or he hopes, right, that somehow there will be some pause in development, right? Or by attacking, you know, Google and other companies that are, you know, building Gen. A.I. products. He hopes that this is is a way to say, hey, look at, look at Grock or hey, look at Tesla optimists, right?

Don't look at these other competitors. We need to talk about Bezos, right? Bezos is a big investor in figure as well. So essentially all of his, you know, kind of these friends, you know, that used to, you know, used to be friends and now they're foes, right? So he is building, he's building a narrative. It is us, it is X, it is Twitter, it is Grock, it is Tesla Optimus against everyone else. And I'm going to be suing everyone else and I'm going to be using my platform, which is fine. He can do this, right?

But I'm going to be using my platform on X to just, you know, just burn all these other companies down and to say how they're doing these illegal things. I'm going to be launching lawsuits, but it is meritless. This lawsuit is meritless. All right. So let's break this down even a little bit more. Number one. So here we go. Yeah, now we're getting straight opinion mode.

All right. So this is Elon's main arguments debunked going back to those original arguments. So like I said, there is not a contract. All right, there is not a contract. So Musk is not on the articles of incorporation. The lawsuit even talks about this, right? Guess what's not in the lawsuit? So in any lawsuit, you always submit exhibits, right?

Guess what's not in there as an exhibit? Any contract? There's not in articles of incorporation. So the lawsuit talks about a quote unquote founding agreement. That was just kind of like an unofficial agreement. It was not a formal contract, right? So even the wording that they use is that it was memorialized, right? So that's lawyer speak, right?

That's lawyer speak. If you don't submit a contract in an exhibit for a lawsuit against multiple billion dollars companies, that probably means you don't got the receipts, right? You don't got the receipts. There was no contract submitted. There was no agreement submitted in the exhibit in the lawsuit because they're saying it was memorialized. Essentially what that means is, oh, between emails and conversations and, you know, it was

just known. It was just known, right? No. His name is not, Elon Musk's name is not on a contract. You know, he is not on the articles of incorporation. You know, so if you don't have the receipts, you don't have a contract. And that's where, you know, we could go apart and pick this lawsuit piece by piece. But number one, there's no receipt.

There's no contract. It is not in the lawsuit, right? Who knows? Maybe maybe there is some receipt that's going to come later. But as of now, his lawyers are just talking about this agreement was memorialized, which means, yeah, people talked about it. You know, there's some emails back and forth. You know, maybe there's nothing officially signed.

but, you know, it was assumed, right? It's on a website. It's on an email. Well, there's no contract. No contract. All right. Second big point. And you know what?

We technically don't even need to go past that. Because if you don't have the receipt, none of the rest matters. All right? If you don't have a first level, it doesn't matter if you build up to the 30th floor. The whole thing crumbles. So this whole thing crumbles off the back. Don't even need to go into other points, but we're still going to do it. Right.

So the second one. that they're kind of tearing apart is the whole concept that Open AI benefiting the public. All right. But guess what? Even in the contract or even in the kind of original incorporation, which Musk is not listed on, that's up for interpretation. The language there is intentionally super vague. So benefiting the public, that can mean anything.

Because guess what? can a for-profit multi-billion dollar company that keeps AGI closed source, can it still benefit the public? Yeah, it can't. It doesn't say how it will specifically benefit the public or when. When you put a vague statement out like that, like for the benefit of the public, right, to build AGI open for benefit of the public, you could say that they're technically doing it right now, right?

Can you agree with what Musk is saying? Yeah, of course. Can you agree with this statement that a for-profit billion-dollar company can keep AGI somewhat closed source and still develop it and release it to benefit the public, even if it's for-profit? Yeah, right? I'm paying $20 a month. Chad GPD benefits me, right?

You know, it never said. And even in the original agreement, it never said we're going to remain a nonprofit forever. And we're going to hold kumbaya sessions and get all the humans together and, you know, get their opinion. No. Even nonprofits are companies, they are businesses, they have to make money. So the whole concept of benefiting the public, that is just the world's vaguest statement. All right. The other one, which we're going to pick apart, is there was a word in there that said when applicable to benefit the public and to release certain details when applicable, right? But guess what?

This is also up to Open AIs interpretation. All right. To say when applicable, it doesn't mean that it needs to, oh, you know, be by a certain year. They can just say, hey, when applicable to Open AI means that, hey, we can benefit the public, quote, unquote, in the year 2030. And we're going to do that by selling it to the highest bidder if they want to, right, which is what Musk is ultimately alleging. He said, well, hey, here we go, for profit company. is just becoming an arm of, you know, big tech, right? And this is against the, you know, the founding principles of what Open AI was originally

for. Okay, well, companies can change. Companies can pivot, right? And that's why when you have, even in the founding agreements, which Musk is not a part of contractually, right, that's why you have this general language because companies, their mission changes. Profit makes you pivot. And it's not a bad thing, right?

Is it completely different? would I be upset if I, you know, donated between $10 million to $100 million? Yeah, I probably would be. But guess what? I would have made sure that my name was on a contract, right? I would have made sure that even in that contract or in that original founding agreement that you specifically lay out, hey, if this 501C3 becomes, you know, starts to develop future LLCs underneath and essentially becomes a for-profit company operating under

a nonprofit umbrella, how are you going to invest $10,000, $50 million, $100 million, and not see that in the future, right? Like if you see the potential and you're investing tens of millions of dollars or $100 million like Elon Musk is, why would you not get it in a contract? Why would you not make sure your name is on it? Why would you not play out the different scenarios that says, hey, if Open AI happens to, you know, open up separate LLCs, separate companies, this is what happens with this investment. Does it convert to equity? Maybe.

You know, again, I'm not a lawyer. But this thing, this argument is as flimsy as a wet paper towel in the wind. It holds no weight. It is a joke. It is PR. But again, we're going to wrap up here, y'all. We're going to wrap up here by saying it can be both things, right? Elon Musk in this lawsuit can both make very relevant statements.

He can make things that we agree with, right? Again, I'm not trying to side one way or the other. I'm looking at the facts. I'm looking at the receipts. As I always do, where are the receipts? Well, here's both things can be true. You can agree with the overall sentiment of what Elon Musk is saying, hey, this company, Open AI started as a nonprofit with a very altruistic mission, right?

So I donated money to them as a nonprofit. And now look, now they are essentially a for-profit subsidiary of Microsoft. And they're keeping all of this AGI close to the best and they're not telling us. Well, all right. That's fine. They have every right to do that, right? You are not on there, on their, you know, original documents, you know, contractually. You have zero say.

It can be a nonprofit today and still a nonprofit with 24 profits underneath it tomorrow. doing whatever they want, selling AGI to the highest bidder, they can keep it close, right? I think just because people have the name, people, because it's open AI, and because it did originally start much more as a nonprofit versus a for-profit company, people think, oh, okay, well, that's not fair. No, it's not how nonprofits work. Many nonprofits actually are huge revenue generating machines. All right.

So you have to look. Yes. Elon Musk's points can be true. But also, this lawsuit, you can look at it as a joke. You can agree with the points, but say the lawsuit is nothing more than a PR stunt. It is to say, look, all this money, I deserve this money. And hey, you all are bad, you know, Microsoft is bad. Open AI is bad.

ChatGPT is bad. You're developing AGI. That's bad. But oh, look at me. Look at, look at Grock. You know, look at our Tesla optimists, right? So to me, all this is, it is about the money. It is a PR.

It is not an actual real lawsuit. It's not. Is there going to be a jury trial? I don't think so. How is this going to play out? I don't know. Again, I'm not a lawyer. This thing doesn't have teeth.

It doesn't take a trained lawyer to see this thing does not have teeth. There is no receipts. The name is not on the original founding agreement. There's no written contract. Sorry, y'all. Doesn't. So, yes, Tanya brings up a good point. Yeah, taxes, you know, I'm not sure of their tax structure.

I'm sure that, you know, they have great lawyers that, you know, as most corporations here in the U.S. try to pay as little taxes as possible. I honestly don't know. Tanya, what their taxation structure is because they do have these, you know, for-profit entities that are not nonprofits, but they're sheltered, quote, unquote, or they are umbrellaed under a 501c3. Here we go. All right, Cecilia said the problem with these meritless lawsuits is that they raise issues

with that prompt government oversees the Department of Justice SEC investigations. Yes, so who knows, who knows what this actually entails. All right. And then, Tanya is saying, don't we want competition to ultimately create products? Yes. And I think this is exactly what Open AI has done, right? Hey, opening eye was years ahead of everyone else. If they went forward with this very altruistic nonprofit 501c3 mentality that we're not going to be, you know, partner with tech giants and we're not going to be generating billions of dollars, I don't think we would be where we're at today, right?

It was largely due to the popularity of the GPT technology that you saw Microsoft invest billions of dollars. They didn't do this in 2015, right? They did it over the last couple of years, right? You wouldn't have, I don't think. I don't think you would have something like Google Gemini. I don't think you would have X's GROC. I don't think you would have these things. So even by OpenAI shifting its focus, which it is free to do and operating more like a

for-profit billion-dollar company, I think it leads to healthy competition. It leads to where we're at today. And hey, where we're at today is wrapping up this show. I hope this was helpful. If so, please consider sharing this, right? People are always like, oh, Jordan, I love listening to the show or I love being on the live stream. How can I help? Click that repost button.

You know, some of these shows, we spend many hours researching, producing. It would help if you just shared this with your friends, repost this, tag someone that needs to hear it. Or if you might leave us a review on Apple or Spotify, that would be great. And more importantly, go to your everyday AI.com. Sign up for the free daily newsletter. We're going to have even more. We're going to have some more screenshots of this. you know, this quote unquote founding agreement.

We're going to, you know, be breaking down the lawsuit in even more depth. So please make sure to go to your everyday AI.com. Join us for that. And we'll also see it tomorrow to talk about why the dispersion of AI jobs across the U.S. is actually what it means. We're going to be talking about what it means. All right. So thanks for joining us.

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