Musk Calls OpenAI-Microsoft Deal a “Bait and Switch”
Musk revealed to a California jury on Wednesday that he texted Sam Altman in early 2023, questioning “What the hell is going on?” after learning of tech giant Microsoft’s $10 billion investment in OpenAI. Musk co-founded OpenAI with Altman over a decade ago. He called the move a “bait and switch” in his text message.
Musk made the remarks during his second day of testimony in the civil lawsuit he brought against OpenAI. He is attempting to convince the jury that the defendants, including Microsoft, “improperly profited by billions of dollars.”
“Microsoft wouldn’t put in $10 billion unless they were confident they were going to get a return—that’s a huge amount of money,” Musk said, explaining why he was so upset about the investment. OpenAI CEO Altman was also present in the courtroom during Musk’s testimony.
Under direct questioning from his lead attorney, Steven Molloy, Musk stated that he feared Microsoft would effectively take control of artificial general intelligence (AGI) that was “started as a charity.”
“Microsoft’s motivations are completely different from a charity,” Musk added.
“Microsoft’s motivations are different from a charity,” Musk added.
This is Microsoft’s second investment in OpenAI. Microsoft first invested $1 billion in 2019.
When asked why Musk didn’t file a lawsuit in 2019, he said he understood at the time that profits were capped. Musk left OpenAI in 2018, stating he believed Microsoft “agreed to participate in a capped-profit manner.”
The lawsuit later named Microsoft as a defendant, alleging that Altman and Brockman strayed from OpenAI’s founding purpose—a non-profit organization dedicated to developing artificial intelligence for the public good, not private gain.
Musk claims in the lawsuit that he invested $38 million in seed funding over the years to support this mission, only to be “betrayed” by OpenAI, which he says transformed into a “for-profit, market-dominating behemoth” that is essentially “a subsidiary of Microsoft.”
Microsoft attorney Russell Cohen told the jury in his opening statement on Tuesday that Microsoft “helped OpenAI pursue and advance its mission.”
“Unlike Mr. Musk, Microsoft never sought to control OpenAI,” Cohen said.
On Wednesday in court, when asked how Musk responded to those statements, he said, “They’re trying to mislead the jury.”
During the month-long trial, the jury is expected to hear testimony from more tech industry heavyweights, including Altman, Brockman, and Microsoft CEO Satya Nadella.
OpenAI has repeatedly dismissed Musk’s lawsuit as “meritless.” In opening statements, William Savitt, lead attorney for OpenAI and Altman, told the jury that Musk is suing the ChatGPT developer simply because he is upset “that OpenAI didn’t turn out the way he wanted.”
“Mr. Musk only cares about being in charge,” Savitt said.
During cross-examination by Savitt on Wednesday, Musk accused the attorney of trying to “trick” him.
Musk told Savitt, “Your questions aren’t straightforward. They’re designed to deceive, essentially. Any simple answer would mislead the jury.”