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What to Know: Musk and Altman face off in court
The jury selection process has already started in the case that will pit Elon Musk against Sam Altman, signaling the beginning of the showdown between the two people, whose long-standing and intense rivalry will culminate in a trial that will decide the fate of OpenAI.
Musk claims that Altman, CEO of the firm in question, violated the initial idea behind OpenAI that Musk himself established alongside him in 2015 as a non-profit organization working toward humanity's common good.
The case — Following a corporate restructuring in which OpenAI converted into a for-profit company, Musk claims that OpenAI is now guilty of violating charitable trust over his $38 million donation to the organization during its infancy. Moreover, Musk has accused both Altman and the President of OpenAI, Greg Brockman, of unjust enrichment. (In addition to this claim, Musk recently dropped an accusation of fraudulent misrepresentation against OpenAI in its conversion from non-profit to for-profit entity.) OpenAI’s legal representatives contend that the lawsuit is entirely unfounded and fueled by competitive motivations to impede OpenAI’s standing within the AI community. Musk himself is the head of xAI, an AI firm which Musk recently acquired and absorbed into his aerospace firm SpaceX.
The evidence — In the trial, which is expected to conclude by late May barring a last-minute settlement, Musk will confront Altman in front of a panel of witnesses that include the likes of Musk himself, Altman, Brockman, Microsoft CEO Satya Nadella, and Ilya Sutskever, a former OpenAI Chief Scientist. Mira Murati, a former Chief Technology Officer of OpenAI, will also take the stand. Discovery proceedings have uncovered thousands of pages worth of documents, such as diaries and emails dating back to the early days of OpenAI, as well as new information regarding the temporary ousting of Altman as CEO during 2023.
What’s next — The suit may very well determine the future of OpenAI. For one, Musk seeks a sum of $150 billion in compensation, which he promises to distribute among the OpenAI non-profit, effectively halting the for-profit version of OpenAI in its tracks. Secondly, Musk is calling for OpenAI to undo its conversion to for-profit status. Such an action may make it all but impossible for OpenAI to raise the necessary financial resources to be competitive on the AI frontiers. Thirdly, Musk demands that both Altman and Brockman be relieved from their positions.
On the side lines – This legal battle is a deeply personal one. After leaving OpenAI in 2018 due to differences in vision with Altman and Brockman over taking control of the company and merging it with Tesla, Musk has never hidden his hatred for Altman. He has referred to OpenAI as “ClosedAI” for breaking its promise of releasing all but two percent of its codebase into open source. His Grok chatbot is a free speech-based alternative to OpenAI’s ChatGPT, which is allegedly shackled by “woke censorship.” Yet, even with all these efforts, Musk’s organizations continue to trail OpenAI in terms of achieving groundbreaking results on leaderboards and deploying cutting-edge AI technologies. Presently, OpenAI and SpaceX are both striving to emerge as the first company to go public at a valuation higher than $1 trillion, possibly as soon as next year.
But in the event that Musk wins, the true beneficiaries might not be Musk’s own organizations. It could be Musk’s other archrivals chasing OpenAI, including Anthropic and Google.
Feather was directed by an OpenAI representative to a blog post by the firm where Musk was quoted saying he was driven by “jealousy, regret for leaving OpenAI and a desire to undermine a rival AI company.” There has been no response from SpaceX to a request for comment.
Who to Know: Cursor CEO Michael Truell
While Musk was playing catch-up in his quest to beat OpenAI, SpaceX also agreed to a deal recently to acquire the AI coding company Cursor for $60 billion or pay a fee of $10 billion if it backs out of the acquisition at the end of this year.
The astronomical figure (more than $16 billion compared to the price Musk paid for Twitter in 2022) shows how crucial coding skills are in building superior AI algorithms.
It is no secret why SpaceX should buy the company, as it can utilize Cursor’s technology and the massive amount of data it holds regarding how the world’s developers code through the app that allows users to select either Composer’s algorithms or other models like Claude Code.
However, the move makes perfect sense for Cursor too, which was under pressure due to its competition with similar apps such as Claude Code, Codex, and Antigravity by Google. But with SpaceX offering access to Elon Musk’s computational resources, the company now has the ability to train its algorithms in frontiers.
When I caught up with Michael Truell, the 25-year-old CEO of Cursor, just before the holidays, he outlined a few different approaches the company might take to create a “moat” around its business and protect itself from competition. Among them: making use of the wealth of customer information that Cursor amasses through its software. And access to compute. “If you can mobilize the power of lots of GPUs, you can really do some great work,” he said.
The deal does present risks, too, particularly for Cursor. Last month, Anthropic blocked xAI from accessing Claude, citing violations of terms of service by the company—which is now owned by SpaceX—for using its own AI to create a competing product. Were Cursor acquired by SpaceX, there is an opportunity for Anthropic to cut off Claude for Cursor entirely, which would likely upset a number of its users who rely on Claude as their AI of choice within the software. Yesterday, I texted Truell to ask if that was something he worried about. He didn’t respond, nor did a Cursor spokesperson.
AI in Practice
In AI news, an AI start-up co-founded by the former executive from DeepMind, David Silver, raised $1 billion on Monday, giving the company a valuation of $4 billion. The London-headquartered firm called Ineffable Intelligence claims to want to create AI that has continuous learning capability, as opposed to the existing models which learn everything upfront. In terms of funding, the UK government has reportedly invested somewhere between £1 and £10 million—again, not very much in proportion to the total amount of capital raised, but an indication that states are increasingly becoming interested in investing in AI firms.
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Racing ahead: High earners make biggest gains from artificial intelligence as workplace gap widens by Madhumita Murgia and John Burn-Murdoch in the Financial Feather
The highest income earners are far more likely to be using AI in their workplace, revealed a new survey conducted by the FT. According to the results, more than 60% of high-income earners working in the U.S. and the UK use AI on most workdays, as compared to fewer than 10% of low-income earners who reported usage of AI. While it could be due to the convenience for high-income earners who sit at a desk to utilize AI technology, it could also indicate a growing economic divide.
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