The Journal. - How Sam Altman’s Bromance With Elon Musk Turned Toxic

Episode Date: March 7, 2024

Sam Altman once called Elon Musk, one of his OpenAI co-founders, his hero. Now Musk is suing Altman, accusing him of abandoning OpenAI’s founding mission in pursuit of profit, which OpenAI denies. WSJ’s Berber Jin reports on the highs and lows of a Silicon Valley’s bromance.  Further Reading: - How the Bromance Between Elon Musk and Sam Altman Turned Toxic  - Elon Musk Sues OpenAI, Sam Altman, Saying They Abandoned Founding Mission  Further Listening: - Artificial: The OpenAI Story  - Money, Drugs, Elon Musk and Tesla’s Board  Learn more about your ad choices. Visit megaphone.fm/adchoices

Years ago, long before Sam Altman was CEO of OpenAI, one of the hottest AI companies in the world, he was just a young entrepreneur with big dreams. And there was someone in the tech world who he really admired, someone he considered a hero. Elon Musk. In Elon, he immediately saw someone that he could look up to and also try and cultivate as a mentor over time.

That's our colleague Berber Jin. Altman and Musk would eventually become friends and go on to co-found OpenAI together. But over the years, their relationship became turbulent. And Altman's hero turned on him. And last week, their tense relationship got even worse. Elon Musk suing OpenAI and the company's CEO, Sam Altman, alleging they have breached the company's founding agreement by putting profit ahead of benefiting humanity. OpenAI denies the claims made in the lawsuit.

And how would you characterize Elon Musk's relationship with Sam Allman now? Yeah, I would say it's pretty toxic in some ways because he literally sued Sam. I mean, I guess it's one thing if he's trashing OpenAI as a business, but he's not really doing that. He's really going after Sam

and specifically Sam's ethics and his morality as a person, right? I mean, it's just a really dramatic unraveling of their relationship. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudson. It's Thursday, March 7th.

Coming up on the show, the story of how Sam Altman and Elon Musk's bromance turned into a brawl. access to pre-sale tickets so you don't miss it. Meeting with friends before the show? We can book your reservation. And when you get to the main event, skip to the good bit using the card member entrance. Let's go seize the night. That's the powerful backing of American Express. Visit amex.ca slash yamex. Benefits vary by card. Other conditions apply. IMEX. Benefits vary by car and other conditions apply. Sam Altman first met Elon Musk more than a decade ago,

when Altman showed up at SpaceX's headquarters in Southern California. At the time, Altman was in his 20s, and had just sold his first startup. It wasn't all that successful, and he was trying to figure out what to do next. Elon at the time was already running Tesla. He was already running SpaceX. He was already seen as a visionary entrepreneur that a lot of people looked up to. So in those early days, I think Sam was really struck by Elon and the companies he was building. You can sort of imagine Sam, he's kind of, at the time especially, he was this sort of skinny,

soft-spoken guy touring a massive factory that Elon had built, listening to Elon talk about how he wanted to send these rockets to Mars. What do you think made such an impression on Sam Altman? At the time, Sam was extremely ambitious. I mean, with his first startup, anyone you talk to at the time will tell you that Sam wanted to become a big shot entrepreneur. He wanted to develop a technology that would change people's lives. And I think he really saw that in Elon.

To get a picture of Altman's relationship with Musk and how it changed over time, Berber and a team of reporters spoke to dozens of people and reviewed court filings and internal OpenAI documents. They learned that after their initial encounter at the SpaceX factory, Altman and Musk kept in touch. They corresponded over their shared interest in artificial intelligence and how the technology had the potential to become extremely dangerous, especially if it

was controlled by a single giant tech company like Google, which at the time had a massive lead in developing AI. Then, one day, Altman wrote to Musk with a proposal. Sam, in 2015, had this idea of starting an AI lab that could rival Google, and he knew Musk would be interested. And so Sam emailed Elon, basically told him he wanted to build what he called a Manhattan Project for Solving AI, and asked if Elon would be interested. Musk said yes, and the pair co-founded OpenAI in 2015 with several other investors and scientists. It started out as a non-profit research lab with the goal of creating so-called Artificial General Intelligence, or a computer that's as smart or

smarter than humans. And the idea was that all of the company's breakthroughs would be shared openly, hence the name OpenAI. Altman and Musk were co-chairs. Musk provided much of the funding. Hope I don't forget asking this on camera, but how do you think OpenAI is going as a six-month-old company? That's Altman interviewing Musk in 2015 in a video posted online. It seems to go pretty well. I think we've got a really talented group at OpenAI. It seems like it. Yeah, a really talented team, and they're working hard.

And in the beginning, after they started this company, how did things go? In the beginning, I think they were both optimistic. It was really Elon who had more of an influence over the organization. They actually did an offsite to SpaceX's headquarters. And it was the same thing where a lot of early employees would talk about being really wowed by these massive rockets that Elon was building and so excited that they were working on a project that Elon had agreed to fund and was leading. Musk donated more than $44 million to OpenAI, according to court filings.

He also paid the company's rent. But in 2017, Musk started to get frustrated. He thought OpenAI wasn't developing its technology fast enough, and he wanted to do something about it. AI wasn't developing its technology fast enough, and he wanted to do something about it. He had an idea that this lab, perhaps unrealistically, would be able to catch up with Google right away. He wanted more control over the organization. He kind of felt like he had a right to swoop in and fix things on his own, and that didn't

go very well with the company. At the same time, Altman and other OpenAI leaders started to believe that the company would need a lot more money if it was ever going to make serious progress toward developing AI. They needed the funding to pay for things like computing power. So, they toyed with the idea of creating a for-profit subsidiary that could sell OpenAI's technology and allow it to raise more money from investors. In his lawsuit, Musk said he resisted the for-profit idea

and said he would no longer fund OpenAI if it did that. But OpenAI says Musk was actually okay with the for-profit arm, just as long as he had majority control over it. This was the beginning of the end of Musk and Altman's partnership. The two couldn't see eye to eye, and Musk soon left the company. So he formally left in early 2018. A few things happened. The first is that his attempt to basically take over the organization failed. A lot of the executives were not in favor of it, particularly Greg Brockman, who is the CTO now.

He was very close to Sam. He felt very pressured and uncomfortable with the idea. And I think ultimately his authority with an opening act kind of fizzled out, right? Like he wasn't, he didn't command a lot of strong loyalty from employees who kind of felt it was uncomfortable to work for him. They didn't like how erratic he was. He didn't curry favor with a lot of the executives who also felt it was unfair for him to just demand control over this organization. After Musk

left, Altman became CEO and OpenAI went forward with Altman's plan to create a for-profit subsidiary. Soon, it entered into a partnership with Microsoft which injected billions of dollars of funding. So after Elon Musk left OpenAI,

what was the relationship like between him and Sam Allman? Yeah, I think they remained friendly because he continued to actually, funnily enough, pay rent for OpenAI and donate money to OpenAI. Like, I guess small amounts by his standards, but still like a few million dollars. And Sam would ask him for advice from time to time. And I think they would remain friendly with each other. If they saw each other at parties, they would say hi.

So I think they had a decent relationship. But mostly Elon, Elon didn't feel like OpenAI would go anywhere. I think when Elon left OpenAI, he thought that the company was kind of lost in the wilderness. And so I don't think it occupied that much headspace for him until 2022, when ChatGPT was released. That's after the break.

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He proceeded to attack Sam very repeatedly on X, formerly known as Twitter. And he would basically say, you know, Sam turned this nonprofit that I created and, you know, made it into a for-profit that only cares about money and is controlled by Microsoft. And I'm really concerned about the future of AI and how ChatGPT is accelerating a really dangerous race amongst different companies to develop more powerful versions of this technology. So he was really caught off guard by its success.

As OpenAI continued to grow last year, so did Musk's attacks, especially over that decision to partner with Microsoft. Here's Musk in an interview last spring. When push comes to shove, let's say they do create some digital superintelligence, almost godlike intelligence, well, who's in control? And what exactly is the relationship between OpenAI and Microsoft? And I do worry that Microsoft actually may be more in control than, say, the leadership team at OpenAI realizes. Altman also spoke out about their souring relationship.

Here he is on a podcast around the same time. I definitely grew up with Elon as a hero of mine. You know, despite him being a jerk on Twitter or whatever, I'm happy he exists in the world. But I wish he would do more to look at the hard work we're doing to get this stuff right. Is it possible that some of this is fueled a little bit by Musk's jealousy? I think that's what people close to Sam would say. I think, I think that's what people close to Sam would say.

I think, you know, Elon's the type of guy who is seen to be in control. He's not used to losing, right? I don't think he's lost many times in big ways in his life. And so I think, yeah, I mean, he kind of helped Sam get OpenAI off the ground, right? I think OpenAI was kind of Sam's brainchild. But, you know, it was Musk's name that made it credible. People close to Musk say his concerns about safety are genuine. After Musk bought Twitter,

he cut off OpenAI's access to the platform's data, which OpenAI had been considering using to train its AI models. Afterward, Berber says Altman invited Musk to OpenAI's headquarters so the two could talk. They had a very lengthy discussion, closed-door meeting about chat GPT, Twitter, and it was very intense from our understanding. And they also had another exchange where Elon was like, hey, I'm going to start a competitor to OpenAI.

And Sam was like, you shouldn't do that. But Musk did it anyway. In July of last year, he launched his own artificial intelligence company, XAI. It released a new chatbot called Grok, which Musk said was a less woke alternative to ChatGPT. chatbot called Grok, which Musk said was a less woke alternative to chat GPT. Then, last Friday, Musk filed that lawsuit. It accuses Altman of abandoning OpenAI's original mission, which was to create AI openly and for the benefit of humanity, not the shareholders of a giant tech company like Microsoft.

giant tech company like Microsoft. He's saying that Sam intentionally decided to turn a non-profit into a for-profit entity because he wanted to make money for the business and because he stopped caring about AI safety. Here's Musk at a conference last year talking about open AI. It's gone from an open source foundation of 5123 to suddenly it's like a $90 billion for-profit corporation with closed source. So I don't know how you go from there to there. That seems like a, I don't know how you get, I don't know, is this legal? He also talked about Altman.

What do you think of Sam Altman? I have mixed feelings about Sam. I do, you know, the ring of power, you know, can corrupt. And this is the ring of power. OpenAI says it hasn't abandoned its original mission and that raising money the way that it did was necessary to accomplish its goals. And another interesting part of the lawsuit is that Elon alleges that GPT-4,

the latest model that OpenAI released, is a form of AGI. It's a form of Artificial General Intelligence. That it's reached the Holy Grail, essentially. That it's reached the Holy Grail. And the legal argument here is that if GPT-4 is AGI, then Microsoft doesn't have a right to license that technology.

Because Microsoft only has a right to license technology that is not as powerful as AGI. Does Elon Musk or anyone else really believe that ChatGPT-4 is artificial general intelligence? That's what he alleges in the lawsuit. I mean, it provokes an interesting question as to what constitutes AGI. I mean, people don't really know. People don't have a definition for it, right? There's no real standard. And I think that's what Elon is poking at a bit in the lawsuit.

Open AI says GPT-4 is not AGI. In his lawsuit, Musk says he wants the court to order Open AI to adhere to its original mission and release its research and technology to the public. He's also asking the court to bar Microsoft and OpenAI's leaders from benefiting financially from the company's technology. Musk didn't respond to a request for comment.

Where do you think this lawsuit might go next? Does it have legs? I think the prevailing consensus now is that it doesn't have that many legs, primarily because the founding agreement that Musk says has been violated isn't like a binding contractual arrangement that him and Sam signed that's legally enforceable. But a nonprofit that created a for-profit subsidiary with provisions around this concept that's like more science fiction than anything

called artificial general intelligence, I guess there just aren't many legal precedents for a case like this. Do you think there's a point of the lawsuit beyond actually winning the things that Elon Musk outlines he wants? I mean, in terms of perception, right, where regardless of whether or not he wins, it's definitely another reputational hit for OpenAI, right? Last fall, there was a failed coup to oust Altman. And there have been lawsuits from authors and media companies that accuse OpenAI of using their licensed work to train its AI systems without permission.

And so the lawsuit is just like another thing that's tossed out that OpenAI has to deal with. I mean, they have to like go through the discovery process and, you know, file a response and potentially try and reach an out-of-court settlement. I mean, it's just like a headache for them, you know? After Musk sued OpenAI, Altman wrote a memo to the company's staff. In it, he said, quote, on a personal level, it's sad. I like to think of Elon as a builder and someone who competes by attempting to build better technology and someone who I'd hope to be on our side. He's basically telling Elon to kind of like man up. It's like you should compete on your own terms with your own company, with your own products.

Like don't don't sue us and try and take us down. And he says, you know, like I miss the old Elon, which is kind of an attack, right? It's like, in my mind, you're like a fallen figure. Like, I used to admire you so much, but now I feel, I miss the old days, you know? That's all for today. Thank you. Thanks for listening. See you tomorrow.