Today I\u2019m talking with Liz Lopatto, who spent the last month covering the Musk v. Altman<\/em> trial in all its chaos. You\u2019ll hear her describe the courthouse as a \u201czoo\u201d and explain that there were protests of one kind or another happening outside every day.<\/p>\n<\/div>\n Both Elon Musk and Sam Altman are big personalities, and people have a lot of feelings <\/em>about both of them and the AI industry. And in the end\u2026 nothing happened! The jury found that Elon had filed his lawsuit after the statute of limitations had run out. You\u2019ll hear Liz explain exactly what\u2019s going on there.<\/p>\n<\/div>\n Beyond that, the trial was nominally about OpenAI\u2019s conversion to a for-profit entity from a nonprofit one and if the way OpenAI went about it cost Elon Musk money. But really, the suit seems mostly to have been about Elon Musk being mad at Sam Altman \u2014 or at OpenAI, for being successful without him \u2014 and wanting him punished in some way.<\/p>\n<\/div>\n So in a room full of untrustworthy, unreliable people all fighting with each other, did anyone even have a reputation left to lose? Is<\/em> there a floor?<\/p>\n<\/div>\n Okay: Liz Lopatto on Musk v. Altman<\/em>. Here we go.<\/p>\n<\/div>\n This interview has been lightly edited for length and clarity.<\/em><\/p>\n<\/div>\n Liz Lopatto, you are a senior chaos reporter here at <\/strong>The Verge<\/em><\/strong>. You just covered the Sam Altman v. Elon Musk trial. Welcome to <\/strong>Decoder<\/em><\/strong>.<\/strong><\/p>\n<\/div>\n Thank you. Always a pleasure to be here. I feel like it\u2019s always some new, relatively insane thing that we\u2019re talking about.<\/p>\n<\/div>\n We have to stop meeting under these circumstances.<\/strong><\/p>\n<\/div>\n I think these are your favorite circumstances.<\/p>\n<\/div>\n They are my favorite circumstances. <\/strong><\/p>\n<\/div>\n A few times a year, we drive you absolutely batty by sending you to cover something, and this trial was 100% one of those situations. The copy got increasingly unhinged. I think the audience liked it. But you were in the courtroom for the majority of <\/strong>Musk v. Altman<\/em><\/strong>. You got to see a bunch of the testimony live as these guys took the stand, as Mira Murati and others took the stand. <\/strong><\/p>\n<\/div>\n We\u2019ll start at the high level. I think the audience probably knows that Elon Musk lost, but what was this case about and what were the vibes in the courtroom?<\/strong><\/p>\n<\/div>\n There are two things that we should distinguish. There was what the case was ostensibly about, and then there was what the case was actually about, and those are two entirely separate things.<\/p>\n<\/div>\n Ostensibly, the case was about the violation of a charitable trust.Elon Musk had donated a bunch of money to OpenAI Foundation, and then they created a for-profit, and he thinks that\u2019s a violation of his charitable trust. He also thinks that the timing of that was right around what is known as \u201cthe blip,\u201d when Sam Altman was briefly removed and brought back. Put a pin in that. It\u2019s going to be important here. That\u2019s what we\u2019re ostensibly there for.<\/p>\n<\/div>\n Verge<\/em> subscribers, don\u2019t forget you get exclusive access to ad-free Decoder<\/em> wherever you get your podcasts. Head here<\/a>. Not a subscriber? You can sign up here<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n Because it was around the blip, Microsoft was accused of aiding and abetting, and Microsoft very quickly became my favorite part of the case.<\/p>\n<\/div>\n In reality, there had been so many changing legal strategies around this. This case was filed I think two years ago in state court and then withdrawn and then put in federal court. There\u2019s just been a myriad of things that have shuffled around since then, including a charge that got dropped right before we went to court.<\/p>\n<\/div>\n So to me, the main point of this was punishing Sam Altman and maybe trying to kneecap OpenAI. And this is a case where the two worst people you know are fighting so it\u2019s kind of hard to root for anyone. The most common response that I tended to get when I would talk about this to people or when I would post about it on social media was like, \u201cCan they both go to jail?\u201d So that\u2019s kind of the vibe.<\/p>\n<\/div>\n The courtroom was a little bit of a zoo during Musk\u2019s testimony. We had one woman who got called down in front of the courtroom by the judge and chewed out because she had been taking photos in the courthouse. On the very last day, we had a guy who was ejected because he had been recording the proceedings in the courtroom. There were some shenanigans.<\/p>\n<\/div>\n Every time we would leave the courthouse, there would be some kind of protest going on, usually behind the lawyers as they were trying to give their daily summary and spin what they had done in the courtroom, and then parading behind them would be a guy in a Cybertruck holding an \u201cElon Sucks\u201d sign.<\/p>\n<\/div>\n So that was what that was.<\/p>\n<\/div>\n I want to come to the legal issues and particularly the ruling from the jury, as there\u2019s a lot of mechanics there. I just want to stick on a point that the goal here was for Elon Musk to punish Sam Altman, and connect that to the protests and the comments you\u2019re getting on social media, and certainly the comments we get every time we publish anything about AI. Is there any reputation left to damage for Sam Altman or the AI industry as a whole? Because it seems like both of these guys are at all-time lows. I\u2019m thinking about jury selection when the judge had to just say, \u201cIt seems like no one likes Elon Musk, but we\u2019re going to have to trust that the jury will be fair.\u201d What\u2019s even left to take away here?<\/strong><\/p>\n<\/div>\n There\u2019s no floor about these things. I also view Sam Altman as untrustworthy, which is one of the things that this trial was really driving home as one of the points that Elon Musk\u2019s lawyers were making, and I agree. I also think everybody else in the trial was totally untrustworthy. It was not just Sam Altman, it was all of them.<\/p>\n<\/div>\n One of the things that I found myself thinking about was that the person who really got damaged the most was Mira Murati who, at least as far as I know, didn\u2019t have a reputation as being somebody who was untrustworthy, or conniving, or whatever. And then in testimony from former OpenAI board members, we found out that she was one of the reasons that Sam Altman got fired and then was immediately texting Sam Altman like, \u201cOh, no, Sam, it\u2019s very bad. It\u2019s very bad, Sam.\u201d You remember during this blip that Altman was fired for a pattern of being untrustworthy or something.<\/p>\n<\/div>\n It was \u201che was not consistently candid with the board,\u201d which could have meant anything.<\/strong><\/p>\n<\/div>\n Anything! And the thing that I remember, because I gossip with a bunch of journalists and we are ferocious gossips, is all of us were like, \u201cOh, he did something illegal. Let\u2019s find out what illegal thing he did.\u201d<\/p>\n<\/div>\n As far as I can tell, no, he didn\u2019t. It was just that he was engaging in what I would characterize as relatively normal executive shenanigans, where you are maintaining your control of the company by pitching your subordinates against each other \u2014 a strategy that is widely used in corporate America, by the way.<\/p>\n<\/div>\n So she wouldn\u2019t tell people that she was involved in his removal. She was the interim CEO, and then publicly supported him, and then publicly was involved in bringing him back.<\/p>\n<\/div>\n Someone on the stand, I don\u2019t remember who, said Mira was waiting to see which way the wind would blow and didn\u2019t realize she was the wind.<\/strong><\/p>\n<\/div>\n That was Helen Toner, who was one of the board members who stepped down in this debacle. Because obviously as this proceeded, it became clear that by firing Sam in the way that they had fired him, they had jeopardized the entire company. One of the things that I thought was really interesting from Sam\u2019s testimony \u2014 that I did believe, by the way \u2014 is that he thought about just taking a job at Microsoft and getting paid and not having to deal with any headaches anymore. I can certainly imagine after having been really publicly and embarrassingly fired, and having gone through all of the annoying things that one goes through as a manager and especially as a CEO, just being like, \u201cYou know what? I just want a paycheck.\u201d<\/p>\n<\/div>\n Who among us has not thought about retiring to a comfy job at Microsoft?<\/strong><\/p>\n<\/div>\n Right? And so when he was talking about that, I was like, \u201cYeah, actually, I believe that. That sounds real.\u201d Then he obviously changed his mind.<\/p>\n<\/div>\n But one of the things that I thought was really interesting about that is that we found out Helen Toner, who we saw in deposition testimony, was involved in potentially trying to sell OpenAI to Anthropic, a company that she has some ties to through the Effective Altruism movement. So again, no one here comes off looking good. I thought for a while that Helen Toner was maybe the most reliable witness we had heard from and then in the cross on the deposition it was like, \u201cSo tell us about your relationship with Anthropic.\u201d And I was like, \u201cAwww.\u201d<\/p>\n<\/div>\n That\u2019s actually the thing that struck me about this entire trial. Helen Toner being wrapped up in Anthropic is one thing, but the entire AI industry at the top is 10 people who are wrapped up in each other emotionally, professionally. They\u2019re writing each other obsequious emails, particularly to Elon, just full of flattery and praise about how great everyone is.<\/strong><\/p>\n<\/div>\n The idea that they\u2019re going to make AGI is taken for granted in some way. These are the leaders of a new religion in a real way, you can see it, and they all lack any management instincts or emotional maturity to deal with the kinds of tasks that are put in front of them or the stakes or the money. You can just see it. It\u2019s in the trial, it\u2019s in the evidence, that they\u2019re cracking under the pressure that they\u2019re putting one another under, and there\u2019s no outlet. In fact, the only outlet might have been Satya Nadella, who comes off as the coolest cucumber around because he\u2019s just like, \u201cI don\u2019t know, is this going to make money? Don\u2019t call me.\u201d That\u2019s basically his whole vibe.<\/strong><\/p>\n<\/div>\n Again, I loved Microsoft in this case. I\u2019m not a Microsoft user. I am familiar with their products. Which by the way, their opening statement was so good. It was just a list of Microsoft products you might\u2019ve used at some length.<\/p>\n<\/div>\n It was fantastic. They were just like, \u201cWe\u2019re not sure why we\u2019re here, but you know us. We\u2019re Microsoft. You\u2019ve used Windows, surely. Do you like Xbox? That\u2019s us.\u201d So that was great.<\/p>\n<\/div>\n There was really a sense that the only adult in the room at any given time was somebody from Microsoft. We saw that over and over again where Satya Nadella is like, \u201cDon\u2019t text me. Don\u2019t leave a paper trail.\u201d His emails are not especially spicy. I think the spiciest they got is something like him being like, \u201cWell, we don\u2019t want to be IBM and have them be Microsoft.\u201d<\/p>\n<\/div>\n This is OpenAI. He doesn\u2019t want to be the commodity provider of data center hardware and have their software be the important thing, which is what happened to IBM and Microsoft.<\/strong><\/p>\n<\/div>\n That\u2019s right. Which, by the way, totally understandable sentiment, I feel.<\/p>\n<\/div>\n Especially from Microsoft. He\u2019s like, \u201cI know what\u2019s happening here.\u201d<\/strong><\/p>\n<\/div>\n That was the spiciest thing we got out of Microsoft. That was it.<\/p>\n<\/div>\n So these are people who, in addition to having the management chops and having the sense of what you do and don\u2019t do, were also just a little bit less dramatic. Over and over again, we\u2019d have a witness, and there would be some really brutal and devastating cross from OpenAI. And then Microsoft would get up and be like, \u201cWas Microsoft there? Was Satya Nadella there? Does anyone from Microsoft know anything about any of this? No further questions, your honor.\u201d<\/p>\n<\/div>\n It was a beautiful punchline every single time.<\/p>\n<\/div>\n That\u2019s very funny. So Microsoft obviously put a bunch of money into OpenAI. Nadella had <\/strong>that famous quote<\/strong><\/a> about being above them, below them, around them, referring to Azure and its dependency on Azure and how they would deploy OpenAI\u2019s models. But eventually the trial comes down to, \u201cDid they illegally convert this charity to a for-profit, and along the way, take something from Elon Musk?\u201d What was the actual jury verdict on those counts?<\/strong><\/p>\n<\/div>\n The jury verdict was that Elon Musk filed the suit too late, and the statute of limitations had run out. And I\u2019m going to be real with you, I think that had there not been a statute of limitations question, he still would\u2019ve lost. This was a pretty weak case.<\/p>\n<\/div>\n We\u2019re going to start with the statute of limitation stuff because that is the most relevant. And then I will walk you through all the rest of it because we did do all of this in exhausting detail for the last month of my life.<\/p>\n<\/div>\n One of the things that was part of Musk\u2019s case was that he claimed that he didn\u2019t think his trust had been violated until the blip. For this reason, he was still within the statute of limitations. The law, I believe, is that you need to file within three years. We saw a bunch of evidence that he had been read in repeatedly on the conversion to a for-profit and the various investment rounds.<\/p>\n<\/div>\n I found myself unexpectedly sympathetic to Sam Altman during this trial. So congrats, Sam. He kept trying to get Elon to like him again. There would be these emails where it was like, \u201cHey, we\u2019re raising this round.\u201d Or he\u2019d be emailing people to see what kind of mood Musk was in, if it was a good time to talk to him, because he just wanted to make sure that Elon knew what he was doing, and was it a good time for them to chat? Was Elon in a good mood? If you have a person whose job it is to tell people whether you\u2019re in a good mood or not, I strongly feel that suggests that you maybe are difficult.<\/p>\n<\/div>\n \u201cHow deep is today\u2019s K-hole? Let\u2019s find out before we ask for money.\u201d<\/strong><\/p>\n<\/div>\n Over and over again, there was evidence of Musk being read in every single step of the way. Knowing about the Microsoft investments, knowing about the fact that they were creating this for-profit. In fact, there was a bunch of email evidence that he thought that making OpenAI a nonprofit had been a mistake, that it should have been for-profit from the jump.<\/p>\n<\/div>\n There\u2019s a ton of evidence that, separately from the timeline question, suggests that OpenAI would\u2019ve won this case. The definition of a charitable trust, and I\u2019m going to mangle this slightly because I am not a lawyer, is that you have to have a specific purpose for your donations. You have to have established that this is a trust, and then the next thing you have to establish is that that trust was violated.<\/p>\n<\/div>\n Just looking at all of the donations, which we did in some depth, there were no strings attached that any of us saw. No one at all remembered there being any strings attached. One of the more devastating lines of testimony was that Shivon Zilis was asked, \u201cWere there strings attached to these donations?\u201d And she was like, \u201cWell, not that I recall.\u201d And then in the closing statement, OpenAI\u2019s lawyer\u2019s like, \u201cMan, not even the mother of his children can corroborate his account.\u201d Okay.<\/p>\n<\/div>\n So there were no strings attached. And then we had a financial analysis that showed that money was gone very, very quickly. , tThey had spent it, because AI is expensive. And they had spent it in the way that it was meant to be spent, and all the other money that happened afterwards had nothing to do with Elon Musk. So there was that.<\/p>\n<\/div>\n One of the things that I\u2019m just going to put an asterisk on here, that I thought was interesting but didn\u2019t write about, was that Musk had been paying the rent for OpenAI. They actually had to go back and ask him for money because Neuralink was in the building. When they got accountants to try to get their books in order so that they could proceed, the accountants were like, \u201cOh yeah, you can\u2019t be supporting somebody else\u2019s for-profit business in this building. You need to get rent money from Neuralink. They need to pay you back.\u201d<\/p>\n<\/div>\n Not that we went into this in any depth, but my suspicion is that Musk had been taking a write-off on all of those donations on this building, and had been also taking that write-off on the space that Neuralink was using, which was why that money then had to be paid back to OpenAI.<\/p>\n<\/div>\n There\u2019s a lot here. I mean, there\u2019s a lot of just Elon Musk, there\u2019s infinitely complicated fractally expanding OpenAI layers of companies within the nonprofit that have board control, and people can fire Sam Altman. All of that seems enormously complex, and maybe worth some future litigation. But the jury just went with statute of limitations. And it seems like that\u2019s maybe all they should have been talking about, if that\u2019s what was going to end the case this quickly. Why do you think that we spent all the time in the substance and the complication when Elon had just filed too late?<\/strong><\/p>\n<\/div>\n I did get people asking me about this as well. \u201cIsn\u2019t statute of limitations a legal issue? Why didn\u2019t the judge rule on this?\u201d<\/p>\n<\/div>\n And the answer is there was a question of fact, which was, \u201cWhen should Elon have known what was going on?\u201d And he\u2019s saying, \u201cI didn\u2019t know until the blip. And so I\u2019m within the statute of limitations.\u201d And everybody else was saying, \u201ce\u2019s known the entire time. It\u2019s over.\u201d That was the thing that was being litigated. It wasn\u2019t the only thing that was being litigated, but that was the one that ended up mattering: that the jury was like, \u201cYeah, he definitely knew all of this was happening. This is ridiculous.\u201d<\/p>\n<\/div>\n If the goal was to trash Sam Altman, of course you would pick the blip because then you get to pull every document and email and text message from the blip into the trial into evidence. You get to publish it. We published it. Was that the goal? Was Elon just saying, \u201cI only knew about this when Sam Altman got fired,\u201d in order to put all of that damaging evidence into the record?<\/strong><\/p>\n<\/div>\n I think that was the goal. I think that was what was actually going on. It was also meant to distract OpenAI, because they did have to pay this very expensive law firm to do some very expensive work to defend them. They didn\u2019t just defend the statute of limitations. They defended all of the subclaims and all of the other things as well, which is why there is so much in our stories. They were bringing forward as much as they could to defend every single part of every possible claim because they had to.<\/p>\n<\/div>\n And so, yeah, making Sam Altman look bad, distracting Sam Altman, maybe removing resources as Altman approached an IPO, those were probably the primary goals. I think Musk would\u2019ve been happy with a win. He certainly would\u2019ve been thrilled to force OpenAI to give up a bunch of money, even if it went back to the OpenAI Foundation, as he belatedly decided it should go. There are any number of things that I think he would\u2019ve taken as icing on the cake, and he said that he\u2019s going to continue this through the appeals process.<\/p>\n<\/div>\n Let me just read you the quote. Elon appeared at a Forbes conference, and he said, \u201cI think this is a dangerous precedent to set. If someone can take a nonprofit and convert it to a for-profit, that undermines all charitable giving in America.\u201d I don\u2019t think Elon understands how precedent works, but it seems regardless of that, he\u2019s going to keep tying OpenAI up in litigation for as long as he can.<\/strong><\/p>\n<\/div>\n Oh yeah. He said something very similar to that on the stand, by the way. He has some pet phrases he likes, and \u201cdangerous precedent to set\u201d and \u201cundermines all charitable giving in America\u201d are on the list.<\/p>\n<\/div>\n![\"\"](\"https:\/\/platform.theverge.com\/wp-content\/uploads\/sites\/2\/chorus\/uploads\/chorus_asset\/file\/24792604\/The_Verge_Decoder_Tileart.jpg?quality=90&strip=all&crop=0,0,100,100\")
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