THE NEW YORK TIMES: What Elon Musk’s legal clash with Sam Altman is really about

One of the most controversial and overexposed men in the world is suing another man, who is equally unsympathetic and equally inescapable. Both are insanely rich.

It is so tempting to look away.

Elon Musk’s lawsuit against Sam Altman involves onetime colleagues and buddies who became peevish enemies. Now they would like to take each other down. Happens all the time. These guys just have more lawyers.

Ignoring this conflict would be a mistake, however. The rancorous dispute between Musk and Altman, which went to trial this week with opening statements in an Oakland, California, federal courtroom Tuesday, goes to the heart of Silicon Valley, a place that has always cloaked itself in virtue.

Altman and Musk started working on what was supposed to be a different sort of tech lab in 2015. OpenAI was a Manhattan Project for artificial intelligence, a nonprofit venture that would act as a shield against rapacious behavior by less benevolent outfits.

The goal was to “shift the dialog toward being about humanity winning rather than any particular group or company,” according to a document in the case.

Musk, the chief executive of Tesla, provided the initial funding. Altman was OpenAI’s leader and spokesperson. But Musk says their interests quickly diverged when it became clear just how much money was up for grabs.

OpenAI converted to a for-profit company last year. “A textbook tale of altruism versus greed,” Musk asserted in his suit’s opening salvo.

The fact that the person calling himself an altruist here is likely to become the world’s first trillionaire doesn’t necessarily make it untrue. In his lawsuit, filed in 2024, Musk said Altman, OpenAI President Greg Brockman and others “unjustly enriched” themselves in the development of OpenAI “to the tune of billions of dollars.”

OpenAI, whose value is approaching $US1 trillion, had the inevitable response: No, you’re the one who is greedy. The company argued that Musk walked away when he could not take over the entire enterprise.

“This case has always been about Elon generating more power and more money for what he wants,” OpenAI said in a statement.

One of the few things the moguls agree on is that their feud evokes the works of a certain Elizabethan playwright. Musk, 54, said in his suit that Altman’s “perfidy and deceit are of Shakespearean proportions.” Altman, 41, mused in a blog post this month that “there has been so much Shakespearean drama between the companies in our field.”

If there is a Shakespeare play that could sum up this soured friendship, it’s “Julius Caesar.”

Brutus wants to stop Caesar from gaining too much power, or so he says. Caesar is quite surprised that he’s being assassinated by a supposed friend. “Et tu, Brute?” he cries. Brutus ends the play as dead as Caesar but is mourned as “the noblest Roman of them all.”

Musk should be so lucky to draw such praise.

‘Good of the World’

In the middle of the last decade, Altman was a Silicon Valley insider running the top startup incubator, Y Combinator. Ambitious and persuasive, he didn’t want just to fund companies. He was on a mission to save humanity, which — unknown to the masses — was at great risk.

“I think AI will probably, most likely, lead to the end of the world,” Altman said in 2015. It was a fear he would often express. Why not, he asked, create a bulwark against the other AI companies “for the good of the world”?

Altman drew in Musk, who was even more worried about where AI was heading. “We are summoning the demon,” Musk once said.

Immediately, there was a problem. People everywhere work on nonprofit ventures for modest salaries. They sacrifice for their ideals. Altman knew that would not fly in Silicon Valley. The engineers and scientists would “get startup-like compensation if it works,” he promised.

The nonprofit was dead almost before it began. OpenAI is owned by its employees and investors, including Microsoft, Amazon, Nvidia and SoftBank, as well as the OpenAI Foundation. (Altman has no direct equity in OpenAI but has other investments that make him comfortably a billionaire.) OpenAI is planning to sell shares to the public in one of the richest stock offerings in history.

Silicon Valley is the great wellspring of wealth in modern America. Nine of the 10 richest Americans are tech entrepreneurs, with Warren Buffett the only exception.

People might be offended by OpenAI’s turnabout, but few could say they were shocked.

Except the richest man in the world, whose own AI venture, xAI, is now part of one of his other companies, SpaceX.

SpaceX will soon sell shares to the public as a decidedly for-profit operation.

No happy ending

Tech companies are subject to relatively few constraints these days. Congress is generally passive. Federal regulators have been hobbled. The Trump administration is stocked with venture capitalists and others receptive to tech and its money, as is President Donald Trump.

What’s left for tech opponents are civil suits. Social media companies face an onslaught of cases. One of the first, in Los Angeles last month, found that Meta and YouTube were to blame for anxiety and depression in a young woman who was a heavy user.

“Trials are all we have right now, and things are better because of them,” said Max Tegmark, a co-founder of the Future of Life Institute, a nonprofit trying to reduce catastrophic technology risks. “Trials provide information that is not otherwise accessible.”

The Future of Life Institute gives OpenAI an overall grade of C plus for safety while xAI got a D.

“AI is less regulated in America than sandwiches,” said Tegmark, who is also a physics professor at the Massachusetts Institute of Technology.

“You can’t open a sandwich shop without having your kitchen inspected. But you can release an AI girlfriend for 11-year-olds, and that’s fine.”

A defeat for OpenAI might begin to change that, he said.

Some AI watchdogs said they would like to see OpenAI brought to justice the way Meta and YouTube were. But they would prefer almost any plaintiff to Musk.

“I don’t have long-term faith in a system where we’re legislating through private litigation,” said Sacha Haworth, executive director of the Tech Oversight Project, a Washington-based advocacy group. “I don’t want to rely on a billionaire with a grievance.”

If Musk wins, she pointed out, it would weaken or even destroy OpenAI, “opening up a large share of the market that an Elon Musk company can then gobble up.”

And if OpenAI gets the suit dismissed? “It would send a signal that it’s OK to launch as a non-threatening non-profit working for the public’s benefit and then cynically change to a for-profit without any accountability,” she said.

Haworth’s conclusion: “There’s no happy ending here.”

Some critics are worried that, in the worst scenario for OpenAI, its charitable arm would shutter. That, they said, would wipe out a very large foundation that could have helped people. Musk says he will give any damages he receives to the foundation.

Others take a more benign view.

“The law doesn’t rely on you being a good person to act in the public interest,” said Shaoul Sussman, a former official with the Federal Trade Commission. “A lot of the dirty laundry of OpenAI is going to come out.”

In a different environment, Musk’s pursuit of OpenAI might have been brief, ending with a tip to regulators. But he is not keen on government oversight, which during the Biden administration produced investigations and enforcement actions into his companies.

Instead, Musk’s case against OpenAI uses a legal doctrine called ultra vires, which means “beyond the powers.” It holds that a corporation is restricted to activities defined in its charter. This approach was widely used in the early 19th century when the Federal Government was small and weak and only a competitor could rein in your company.

Most corporations now have wide-ranging charters that allow them to pursue multiple goals. But there is one exception: non-profits.

“This is the first high-profile case that I know of being pursued under these statutes for 100 years,” Sussman said.

In a trial expected to last several weeks, the very old laws will meet the very new technology. As Shakespeare said, what’s past is prologue.