Any one of them is enough to find that OpenAI breached the charitable trust. Now,
first, they enriched the investors, Microsoft, and insiders like
Brockman and apparently quite a few more. We know Sutskever has now seven billion
dollar interest, and who knows who else might have other interests. Um, Professor
Schizer told you that a basic principle of the nonprofits is their revenues and
assets have to be for the benefit of the nonprofit. And the defendants violated
that basic principle by entering into this twenty-twenty deal with Microsoft under
terms that were unfair to the nonprofit. It's that simple. All right? The ten
billion dollar Microsoft investment was ten times its initial investment.
At that point, it had invested thirteen billion dollars, and that totally dwarfed,
totally dwarfed charitable contributions and weakened OpenAI in its negotiating
position with, um, excuse me, with, um, Microsoft. You remember I asked,
um,
Professor Schizer, wh-what if they raise,
you know,
the money,
if they raise the thirteen billion dollars? But I asked him, wh-what if they
raised half of it?
And I don't have the question right in front of me, but it was a question along
those lines. And, and the idea is you at least have some bargaining power there. He
testified that there are charities in, in, in this country, in fact, one right up
the road at Stanford, that can raise three billion dollars in, in the course of
a year. He mentioned...
Um, there we go. He, he mentioned one that was, as he put it, essentially a sou-
soup kitchen. I think it was called Feed America. And he said that they raised over
four billion dollars a year. Now you might, you might say, "Well, gee, you
know,
Brockman and Altman, you know, how are they gonna raise that money?" Well, I have
to tell you, um, Stuart Russell's message
is so powerful, right?
The way that AI--
It, it does create good things. I'm not saying that it can't create good things.
It's the way that it can have such a negative effect
on our lives. One would think that people would be knocking down the door to donate
to an organization that's dedicated to the safe development as a nonprofit. So I
don't know what they did. I don't know if they had firms or evidence that they did
that, but, um, that was a problem. And, um, the constraints on the earlier deals,
the cap
and the limitations on the IP rights, those, um, those were gone too.
Under the terms of the twenty-twenty-three deal, OpenAI would need to earn roughly
two hundred and seventy-five billion dollars in profit,
excuse me, for the nonprofit to, um,
receive... Remember, uh,
Professor Schizer used the term residuals? There was a, a term residuals. And I- at
the time he was testifying, I, I, I looked over and I saw some recognition of his
faces. There, there were these TRAs, uh, these are the amounts that, that investors
would get, including employees, including the nonprofit, including Microsoft.
And anything that was paid off, uh, beyond these target
redemption amounts, the target amounts that they would get, would go into the,
into the nonprofit.
But in the twenty-twenty-three agreement,
at--
when twenty-twenty-five came along, the residents, excuse me, the residuals
would become much smaller. And we-- he showed this because-- And, and by the way,
he, he did not represent that this was a dollar for dol-- you know, exactly precise
calculation. He was showing you what happens.
And, and can we just go back to the last slide? So
it makes sense, right? That if you're, if you're getting some amount of money, and
that would be represented by the blue dots and well as the blue,
and then
everybody else gets more money two years later, the residuals go up by twenty
percent,
you're gonna get a smaller amount for the residuals. So the nonprofit is getting
less money.
And that twenty percent is extraordinary. I asked Satya Nadella, "Twenty percent?" I
said,
"That doubles. That doubles
in less than four years."
And, and he agreed. So that was an extraordinary term and an extraordinary
give on the part of the nonprofit when they were negotiating this deal.
Um, Microsoft also got ri-broad rights to all of OpenAI's intellectual property up
to the time that AGI was achieved. It got the right under this agreement to put
twenty engineers,
um,
and eventually up to ten percent of OpenAI's engineering population,
to help Microsoft commercialize,
um,
that intellectual property and earn revenue. And this is the trend that you're
seeing at this point in time, right? That they are commercializing OpenAI. It's no
longer
a research lab doing safe AI. I mean, uh, when Sam Altman testified and he said,
"Oh, these are, you know,
researchers, and they need a safe environment to,
um, do their work, and you can't manage them like a business." Well,
um,
Microsoft, we'll talk about it in a couple of minutes, was throwing out at them, you
know, "Hey,
you know, you gotta make this hundred million dollar revenue goal if you wanna
get another investment for us." They were pushing them for the early release of a
paid version of ChatGPT, ChatGPT.
But, um,
any-- in any event, meanwhile, the nonprofit raised
zero,
zero dollars in twenty twenty-two.
And at that time,
OpenAI negotiated a deal with Microsoft. What leverage do we have?
Now, the nonprofit received
five million dollars of donations in twenty twenty-three, and that's point oh
five percent of Microsoft's ten billion dollar investment.uh, in the OpenAI
for-profit. The 2023 deal in which Microsoft
and all of the OpenAI dependents at the expense of the nonprofit.
Let's talk about that enrichment. What was the enrichment?
As I mentioned, Greg Brockman,
uh, never invested a nickel. Not only did he never invest, he told people he was
going to invest to try to raise money, as we saw,
and promised people he did that with,
and, um,
and never invested in it. And he now has a stake worth $30
billion. By the way, I thought it was interesting when I asked Sam Altman,
he said, "You know, Greg Altman's never given that hundred thousand dollars."
He told us, of course, he was good with a billion dollars, but he ended up with
thirty billion. Not that a billion dollars would have been a problem with him. But,
and I asked Altman, I said, "Doesn't that bother you? The guy's never given any
money. He's never..."
"You know, not really. You know, Greg's made many contributions." I'm
paraphrasing. "Greg's made many contributions to OpenAI." I mean, the
arrogance,
the, uh, lack of sensitivity, the failure to account for
just kind of decency was really, really appalling.
Remember, Brockman's plan from the beginning
was
in his diary, "Okay,
financially, what will take me to one billion dollars?
It would be nice to be making the billions." We could put this out.
He said,
"We've been thinking that maybe
we should just flip to a for-profit.
Making the money for us sounds great and all." That's what he was saying at that
time.
Those were Brockman's true thoughts
as he was discussing a path forward with Elon. Um, he also enriched himself through
self-dealing and transactions. You heard about Cerebras.
Um, and that was something that he invested in and made money on. He's held
equity in, um, in, in, um, in Cerebras for some period of time. OpenAI gave a ten
billion dollar deal to
Cerebras. Um, and he's not only the only one making those kinds of billions of
dollars.
Um, as I mentioned, Ilya Sutskever has a seven billion dollar,
uh, stake. I mentioned Joshua Atian, who testified yesterday with the twenty
million. And, and Professor Schizer testified, and this is why they're going
to bring up this email from early on when they talked about that people that work
there can get full startup-like equity, okay?
Nothing wrong with people making money. There's nothing proper wrong with people
making money, uh, working for a nonprofit, especially if they're doing work that's
challenging work that's going to require people,
um, from the marketplace to come.
But Professor Schizer was very clear on this,
that just because you're there and you're doing an important job that might be
compensated
at a higher level outside of a nonprofit doesn't mean that you're entitled to make
that same amount in a nonprofit.
He testified that, and he, and he gave the example,
universities with large endowments, Stanford or Berkeley for that matter, you
know, have these large endowments. Donors, you know, donate money,
and the people that manage that money make quite a lot of money themselves. They're
investment managers.
Those same people, if they were working at a hedge fund, not a nonprofit like
Stanford or like Berkeley, would, um, would, would, would be making more.
Well, they're, they're, they're compensated well, but they're there in
part to serve the mission.
And, you know, here
it was just completely flipped on its head.
Now,
um, the nonprofit funds
are supposed to, um, go to advancing the mission,
and they're not supposed to make, uh, their employees and for-profit partners
Microsoft rich.
What about Sam Altman?
Sam Altman, who told the United States Senate that he has no equity in OpenAI.
All right? That was a lie, as I said before.
And, um, he said that, um,
he has, you know, admitted in this, uh, tech, this trial that he has a stake in
OpenAI through his former company Y Combinator, which is sort of a company
that helps
companies that are starting up.
And
he also told you that former board member, uh, Tasha McCauley, that he intent-
intended someday to take additional equity. There's an email that he tells
Elon the same thing, where he says, "Someday I may take equity." Now, maybe
that someday is the day that this trial's over, or maybe it's some other point down
in the future. I don't have any evidence that I can tell you, but I can just tell
you that what human nature is and what past behavior often demonstrates as a
predictor of future performance.
Um, so you be the judges, but,
um, Sam Altman has no equity stake. But what he does have is the ability to, as I
asked him in the interview, I said, "You're the CEO. You have the ability to
influence contracts, the business that they do, business partners that they,
that, that they work with."
And, uh, you heard about his self-dealing being on both sides of deals between
OpenAI and on the one side and companies that he's invested in on the other. Um,
his stake in those companies, there's an exhibit that lists, um,
let me look at this here. What's the, what's the exhibit number that has the
disclosures? It was a, what's called an interrogatory where they submit, both he
and Brockman submitted under oath this document saying, "These are the businesses
that we, uh, have interest in."
Um, anyway, I'll get it for you in a minute. But, um, he, so his, so he, we'll
produce this to you, but his stake in Helion Energy, remember he was explaining
how Helion, how energy is so important to this company because
they gotta have it compute, and they gotta have, you know, these computers need to
be powered, and that's why you hear all the stories about energy and, and, and
such now. His stake in Helion Energy is worth one point six five billion
dollars.1.6 trillion dollars. And he,
w-he was until recently chairman of the board of directors of Helium.
Um, Helium does not have a working product right now,
but it's got a deal with OpenAI that is sort of a pathway to future transactions
once it gets a working product. And Siobhan Zillis testified that when that
deal was announced, it was, quote, "Out of left field," was a phrase that she used,
and it raised concerns to the board.
Uh, Sam Altman claims that he recused himself from the transaction, but he
admitted,
uh, that he participated in discussions about that deal.
Now, uh, another one of his large-- So he said, "I'm recused," but yet then he went
ahead and negotiated, uh, anyway.
I think he gave the ex-the excuse that he didn't really know what was going on or
something like that. Well, that's why we don't allow people with conflicts to be
part of negotiations. Another large investment he had was in Reddit.
Um, you may know Reddit,
uh, from the internet. Um, it's a social media company. In twenty twenty-four,
uh, Altman shares in Reddit were worth about eight hundred million dollars.
Um, he admitted there was an obvious conflict
when, um-- between his Reddit investment and his, um, position at OpenAI, the CEO
of O-OpenAI, because they did a deal together.
And it didn't stop him from negotiating both sides of that deal. And the story
that we heard was, well, there was some litigation or threat of litigation. The
thought would be that I would be the person that could solve it. He has a
fiduciary duty to act for
OpenAI, the nonprofit, act in their best interest, not in Sam Altman's personal
interest, nor in Reddit's best interest.
And Professor Schizer, under the terms of the deal that they have, by the way, it's
two hundred million dollars between OpenAI and Reddit. Professor Schizer explained
that these conflicts of interest like this, these are a problem because a
nonprofit's executives and board members have this duty of loyalty. Do you remember
he talked about duty of loyalty? There was a chart that had three bans on it.
Duty of loyalty was one of them. And that means they need, they need to focus on the
nonprofit's business.
In addition to negotiating with both sides, uh, he also, um, had this OpenAI
startup fund that he didn't tell the board about. And, um, we heard the testimony of
the company's one director who said they were surprised to
learn about this. OpenAI, um, also now has converted to a public benefit
corporation. We'll hear a lot about that. It was in twenty twenty-five and is
exploring something called an initial public offering, which is where a company
can sell stock,
um, and sell shares to the investing public. The PBC,
which it's now converting, there's no caps, no caps on investors and
distributions made in the PBC.
No caps to the investors'
payments under the, uh, PBC.
Um, second, OpenAI failed to fulfill its mission to open source technology.
Remember, that was something that was important.
And, um,
by twenty twenty-three, that went out the window. Um, OpenAI did give Microsoft
interest in commercializing product, okay?
Giving Microsoft these IP rights, the know-how. What if Microsoft, uh--
M-Microsoft had this huge stake, and you heard, you heard Mira Murati. She was one
of the witnesses that testified by, um,
deposition in, in--
And by the way, I don't remember what the judge's instructions said this, but I
couldn't make those people come over because they live too far away here from
us. But I can rotate their deposition and have them testify by video. I apologize
for that because I know it's not always the most interesting, but they came and
gave truthful testimony, and that's what you heard. It's just the same as if
someone-- um, a witness there. And, and she was the point person on OpenAI's
relationship with Microsoft, and she testified that OpenAI agreed to give
Microsoft six months
or one year of exclusivity on GPT language products. That's a big deal when it's a
new technology being developed like that.
So the failure to open source breached the mission. And then on safety,
OpenAI failed, uh, it breached the mission as well too. It was clear from Satya
Nadella's testimony that in early twenty twenty-three, OpenAI was pressured by
Microsoft to release
a version, a paid version
of ChatGPT. You'll recall I showed him before the end of his testimony,
three text messages between Satya Nadella and, and Sam Altman. And these are
exhibits two sixty-nine, two seventy, and two seventy-two, and again, you'll have
these.
In exhibit two seventy, he says, "The sooner, the better for getting paid
ChatGPT set up."
Um, and so he's clearly pressuring Altman. And it's common sense that speed,
speed doesn't equal safety.
Um, as Professor Schizer explained, there's often a tension between profit
maximization in a, in a for-profit subsidiary and adherence to the mission,
loyalty to the mission,
service to the mission.
We saw how it played out here,
uh,
in the testimony of Helen Toner
and Tasha McCauley. Those were two other witnesses who testified by video. You
might remember they were both directors of the company.
And, um, they testified
that, that, that Sam Altman lied to them,
and both Toner and McCauley testified that it was related to, uh, pushing
for commercialization that led to the concerns then for safety.
Concerns for safety.
Uh, you also heard testimony from Rosie Campbell. Remember, that was a woman who
came and testified toward the end of our case. And, um, she testified that, uh,
safety took a back seat at the end of her tenure in twenty three-- excuse me, twenty
twenty-three and twenty twenty-four.Um, and then OpenAI put up a, a whole bunch of
witnesses then at, at the end of the trial to say that, "Oh, everything's fine
today." Well, that's not good enough, right? It's not good enough.
We don't know whether it's fine or not. We didn't really have a trial on whether it
was fine.
We heard the witnesses say that,
and the question is: what was it like in 2023 when they were in breach?
Don't let that distract you
from all of the safety failures that occurred.
Recall all of those witnesses who testified. There were several. There was
Satya Nadella at Microsoft, including,
um,
the, um, the chairman of the nonprofit,
um, Nat, uh, Taylor.
They testified on cross-examination, not when it wasn't by their side, testified on
cross-examination that the OpenAI nonprofit was a nutshell for many
years. In November,
uh, Michael Wetter, who testified yesterday,
was, uh, deposed. He was a sworn statement taken under oath, you know, where lawyers
get to question. He was deposed,
uh, as the corporate representative of Microsoft,
and, um, he
knew as well as the, the, the corporate representative of... Excuse me, I
misspoke.
The corporate representative from OpenAI
was deposed in November,
testifying,
and you saw the testimony under petition.
No full-time employment.
So they're jumping up and down saying, "Oh, this is the richest nonprofit. It's
this great thing.
It's we- we're doing these wonderful works."
They had no full-time employees. They only hired full-time employees about a month
before this trial started, believe it was six weeks.
What does that tell you?
What kind of people do that? What is, what is their priority?
They claim, "Well, it's the mission." They say, "Oh, well, we didn't have liquid
money."
I think it was all that I asked, I'm not sure, but I did ask the question:
Couldn't you borrow against the asset?
Could-- If you have this asset, you know, and, and, and you, and for whatever
reason, you can't sell it or there'd be not an opportunity to sell it, it's worth
all this money. Couldn't you borrow some money so you could actually do the work?
And what are they doing? They're doing work that's making grants. They're not
doing
developing,
you know, AI
safely for the good of mankind and, you know, making it open source with fact.
Well, they're not doing that.
Yeah, it has money.
How much money you think it might have
if they didn't breach the charitable trust? If they did what they were supposed
to do, if they went out and raised the money, if they didn't give away the store
to Microsoft,
it would have even more money. And hearing Stuart Russell talk about the risk of AI,
God, I wish they would've done that.
God, I wish they would've done that. I wish they would've had
a nonprofit with billions and billions and billions of more dollars because the risk
is so high to us. But instead,
they're gonna trumpet the fact that, "Oh, we have two hundred billion dollars." If
you go and rob a bank
and you take a million dollars from the bank,
it's not a defense to say, "Oh, I left, you know, a hundred million dollars in the
bank. I only took, you know, a million."
And that's essentially what they're saying.
So I think that whole
argument and the testimony you heard is nothing more than a farce.
You might recall that
Sam Altman's, uh,
pod-- uh, the, um, or podcast interview that I, that I played.
They had governance
in place. The nonprofit board, right, is supposed to oversee the for-profit.
It was interesting 'cause that's still the case in this governance situation you
have. You remember when I asked him the question, "You know, you sit on the
nonprofit board. Nonprofit board governs a for-profit board. Um,
and that nonprofit board is supposed to, you know, provide the safety." And I asked
him, "You know, are you the CEO of both places and you're on the board of both
places? Would you fire yourself?"
Sounds like a silly question, but it's not a silly question. It's a very pertinent,
important question
because that nonprofit board is supposed to oversee the profit from the board. And,
and of course, he wouldn't fire himself. He dissembled like he, he has in other,
other, you know, instances, trying to dissemble,
um, wh-when, you know, he didn't really answer my question. We went back and forth
a couple of times, but, you know,
it, it's--
there's no governance there
that's meaningful. And you know how we know, too?
Because
that's what the nonprofit board had in twenty twenty-three, right? The, the
ability to hire and fire the CEO.
And what did they do?
They fired
the CEO,
but then they rehired him,
and they fired him
for lying,
and not only for lying, but lying about safety issues. Safety issues.
Is that governance?
He admitted, he admitted in that tape that I played
that,
these were his words, not mine, "Although the board had the legal authority to fire
me,
in practice,
it didn't quite work,
and that is its own kind of governance failure."
He admitted that.
I don't know if he thought that that would someday be played in court.
Maybe it was an honest thought.
Now, Professor Schizer explained that management,
and in particular the CEO, has to be honest and forthright and forthcoming and
candid with the board.Satya Nadella
testified to the same thing. You remember I asked him,
um, about
if he had a senior executive that was dishonest and not providing information?
And, and he said, "No, I'd fire him." And, and I asked him a, a, a question that was
along these lines, and I could reword, reword it a little bit, it was like, "And,
and he'd get him out of the building that day?" And, and he agreed with me. He was
very fast on his answer that, "Yeah, I'd fire him."
And you heard the same thing from Brett Taylor,
the current, um, chair of the nonprofit, and then Zyko Coulter, who was the safety
guy.
Three of them all said that 'cause it makes, it's common sense.
It's common sense. Of course you would fire somebody. What did they do?
They had a CEO who was not providing information, who was deceiving them on
safety.
They fired him and they brought him back.
So having that right today is meaningless. It really is. It's not about the
contract. It's not about what the, what the co- what, what is in that document.
It's about how it's carried out, and we saw how it was carried out. We saw what
they think, we saw what they care about. They're motivated,
and they're motivated by money. Microsoft and
Altman documents.
So in about eight minutes, it will have been two hours for the jury-
-Okay -... so-
-Okay -... you should stop at a-
-Um- -... at a convenient spot.
Okay.
Why don't we stop right now then, if that's okay? I mean, I, I wanna, I have a
little bit more that I wanna do, but, uh, if we can stop now, um, to take a break.
-Is that all right? -We'll stand in recess with the jury for 15
minutes. Okay.
Please rise for the jury.
E- either way, you can, you can leave it there
and then take it later. Doesn't
matter.
Just so that, um, just so I can manage time, Mr. Mullow, what do you have?
-How much time do you have? -Um,
for this?
-Oh. -Less time.
All right. Well then we shouldn't have broke.
Okay.
Then we should have finished your piece to then take a break.
No, I just didn't... I, I didn't...
You've given me a lot of paper,
and so I thought perhaps you had another 45 minutes.
All right.
So we'll just have a couple minute transition.
Uh,
all right, go ahead.
Transcript page 59 at 9:50 AM, Mr. Mullow told the jury that, um,
page 59, 9:50 AM, Mr. Mullow told the jury that we are not asking for money.
-I heard that. -Um, and I'm troubled by that. I think
that's not true. I think it's not legally possible, and I thought it was off limits,
and I
wanted to call to the court's attention,
uh, insofar as we think it's, um, prejudicial and unfair.
I, I,
-could you please what you just said? -You said that you told the jury that you
are not asking for money,
-and it- -Oh, I did, I did say something along those
-lines, yes. -You said that explicitly.
-Yes, yes. -And that is actually not true.
-But we're not asking them for money. -You are asking them for... You are asking
for money in this lawsuit.
Otherwise, I will not be having an evidentiary hearing on Monday for billions
-of dollars of disgorgement. -We're not asking money for ourselves.
It, no, you, you and I have a disagreement about what and whether you can do.
-Okay. -You need to retract that statement-
-Okay -...
or you need to, um,
drop your claim for billions of dollars and drop your claims for, uh,
-all the other phase two litigation. -Okay.
-So you'll clean it up. -But it is a cleanup. I mean, that's what
I, I, I mean, I just want you to know that was where that came from with me. So I
appreciate it. I will, I will take care of it.
But, Your Honor, I don't, I don't wanna belabor this, but it's, it's not a minor
issue. It's something we spent a long time on and it, a claim for restitution is
-exactly a claim for money, and- -I-
-And, and- -So what, what-
In addition, uh, we'd like the ability to at least make, address this issue briefly
in our argument as well by way of, um, response. I said one sentence.
It was, it was, uh,
uh... What did you say about the bank robbery?
One sentence could be a lot.
-I don't think that one was, but- -I, I disagree.
-You slipped it in nicely. -I will, I will say
-I take that as a compliment. [laughs] -I, I don't know. I mean-
It wasn't, it wasn't an attempt to slip anything in. It was in the moment-
It was substantially contrary to something that we've talked about
... so. Sure. I'm s- I, I, I will say that...
I'm sorry.
I, I was in the moment. I said what I said. I will correct it.
I will correct it.
We'll hear the correction, and then I'll let you know.
-Thank you, Your Honor. -All right. You've got, uh,
11 minutes.
May I have lead counsels come up please for the certifications? I need lead
counsels to sign.
On the exhibits, I need partners to sign this, not associates.
He said he needs lead counsel to sign the
Just that he needs to leave council to sign certifications.
Only because.
What do we want to do about, what do we want to do about this sound that? It
sounds like it's like mumble. It's like low.
My question is, when he speaks, it
sounds like, you know,
like mumble. Like, there's no articulation.
-It's like too low a mumble. -Yeah. Yeah. Oh, sorry. Make it a
little louder. You're not taking a lot of the location. But we may not have a party
in these.
-Thank you. -Thank you. Let's do the sign language.
-Nothing. -Thank you.
Is there anything else you need us to sign?
-That's it. Thank you. -Okay. Good. That's it.
For the plaintiff, I mean, Mr.
Molnar. Okay.
-Oh, about who said- -Or...
Okay. Um, so it needs to sign it. Can I bring it back?
I
can turn the screen now.
Have you been using it?
Turn with.
Towards Mr. Savitt for the counsel.
The question, though.
Yeah.
All right.
-Thank you. -Thank you.
That was cool.
Thank
you.
Sorry. You're welcome.
[clears throat]
Yeah, we can use that. But we're gonna turn the podium
toward the screen.
[background noise]
No, that's famous.
[background noise]
We're gonna
have to
[background noise]
.
[background noise]
I'm sorry. Yeah.
[background noise]
-Court is back in session -All right, folks, settle down
-I copy -Let's call in the jury
Hey, what I was gonna suggest
that I say, I hope this is okay because that's why I'm previewing it with you,
is that, um, I made a statement that, um, that we're not asking for money,
that the verdict form will not ask you for money, but that money is implicated in
the case. I think that's--
Given the one statement that I made
Your Honor, we strongly feel that it would be safer and preferable for the court to
give the instruction because we fear there is a risk of real confusion and further
damage to the process if it's left to counsel.
-All right, I'm gonna say that. -Okay.
Let's-- We'll call 'em in.
And one of the things, Judge, you had said I'd been going almost two hours.
According to at least our clock, it was nine-oh-two.
The jur-- I said the jury has been sitting there-
-Oh -... for almost two hours.
-Okay. -They started at eight thirty.
Okay.
[clears throat]
Oh,
one, two, three.
One, two, three. One, two, three.
Well, I just, um, we, we seem to be, uh...
Yeah.
Okay. Well.
-Okay. -Okay, we're testing the mics. You may all
be seated.
Testing, testing.
Is that working for you? Great. Okay. So before, um, Mr. Mullow finishes off here,
I do want to, uh, make sure that one thing is, is clear. He made a statement, uh, in
his earlier remarks that they were not asking for money.
The verdict form will not have, um,
a, a line for money, but money is in fact implicated in this case. Okay? So
just wanna make sure everybody's clear about that. Go ahead, Mr. Mullow.
-[echoing] -Right there. Mr. Mullow, can you move that
mic over to the side so we don't have feedback? Thank you.
Proceed when you're ready.
You'll see the verdict form when you get the verdict form.
So we'll give the instructions. Um,
so
basically, we've covered the idea of, you know, what the evidence related to the, to
the
breach of, um, charitable trust claim.
Um,
twenty twenty-three is when it happens, as I mentioned, enriching investors and
insiders, um, closing off technology,
failing to prioritize safety, and failing to follow nonprofit, proper nonprofit
procedures consistent with
what they should have done.
So let me talk about the other two claims, and I'm not gonna do for a long time
because there's some overlap.
Um, the second claim is the unjust enrichment claim,
and that's against the same OpenAI defendants.
Um, the first element of that claim is, there's two elements as well. First
element is receipt
of a benefit, and the benefit includes any advantage.
So, um, it can be money, but it need not be just money. Um, the, this includes the
thirty-eight million dollars that Elon gave OpenAI.
Elon provided the majority of OpenAI seed funding, as I said, and that's certainly a
benefit.
Um, so just the financial contributions are, are, are enough. But he provided, and
you heard testimony about this from multiple witnesses throughout the trial,
he provided much more than that. He gave his name and reputation.
Um, he recruited key people. He leveraged his connections, like we heard, with, uh,
Satya Nadella and with, uh, Jesse Wang,
uh, from, uh, um, you know, to get, to get com- compute, to get computers.
And, um, he provided
strategic guidance, um, to the-- and, and taught the co-founders, as he put it,
everything that he knew.
Um, you heard about the reputation, you heard about the recruiting,
um, his industry connections. Obviously, he was a very, very prominent person in
two thousand and fifteen in the tech world.
Um, and so I'm not gonna go over all of that again. You know what those, um, what,
what those
incidents were, what they involved, and, and what he did. Um, he also, though, he
also, notwithstanding what, what you're hearing
now,
um, he also really did engage with and mentor and help with the strategy,
um, of OpenAI when it first began.
Uh, you might, you might remember that he, um...Ilya
Sutskever said that he met with him regularly,
and you, you might remember 'cause they got put up a couple of times, exhibits
ninety-eight and ninety-nine, those were emails from Ilya and the, and from Brad
Brockman,
and, um, you see 'em right here,
basically praising Elon, thanking him, telling him it was an honor to work with
him. And so any suggestion-- And, and, and by the way, these are dated January of
two, twenty eighteen. So this is, you know, a couple years into the venture at
this point.
Um,
any suggestion that,
you know, he wasn't around, he was an absentee, I think, I think, um,
we heard
argument that he, he-- or I'm sorry, maybe it was one of the OpenAI witnesses. So,
you know,
he, he, he came by once in a while or
met with people, you know, over... That's not true. I mean, you don't-- Ilya
Sutskever
is one of the premier,
premier artificial intelligence
scientists in the world. I mean, there's no question about it. It was a big get for
them to get him to come from Google,
and for him to write an email like this really says something. So,
um, he did a lot. He did a lot. And the second element is the unjust retention of
that benefit. In considering whether a benefit is unjustly retained,
you can consider whether the defendants knew or had reason to know that the
plaintiff was, that the benefit was to be used for charitable purposes, and that it
wasn't.
Okay?
And that's exactly what happened here. The defendants had every reason to know that
Elon's contributions were charity. It's a nonprofit. And, you know, we looked at the
emails where Elon insisted on the nonprofit structure. They are on these
emails. Um, we saw how Elon, uh, told his co-founders that he did not want to fund
OpenAI,
uh, if it was going in the wrong direction. He insisted that they commit to
the nonprofit. So I don't think there's much doubt about that. And, um, they were
enriching not only themselves, but obviously their commercial partner,
Microsoft.
So they've unjustly retained those benefits.
Uh, heard about, again, Brockman's ownership worth thirty billion.
Altman is getting the benefits that he's getting from his role at OpenAI. The third
claim, final claim that we'll bring is aiding and abetting against Microsoft, and
to establish that Microsoft aided and abetted OpenAI,
Altman, and Brockman
in a breach, um, uh, OpenAI, Altman, and Brockman's breach of charitable trust.
We have to prove that Microsoft had knowledge
that Elon made his donations
for specific charitable purposes, and that OpenAI defendants were going to breach
the charitable trust by using Elon's donations for another purpose.
That Microsoft gave substantial assistance or encouragement to open A-- to the
OpenAI defendants in breaching the charitable trust created by Elon. And that
Microsoft's conduct was a substantial factor, excuse me, in harming Elon.
So knowledge, excuse me.
So, um,
knowledge has two parts.
Uh, first, Microsoft, uh, knew
that Elon made his donations for a specific charitable purpose. They did. And
second, Microsoft knew that open A-- the OpenAI defendants were going to breach the
charitable trust by using Elon's donations for another period, purpose,
excuse me.
Microsoft was aware of what OpenAI was doing every step of the way. Um, it helped
Altman and Brockman violate OpenAI's mission,
and, um, that's aiding and abetting, it's just pure and simple. Back in two thousand
and fifteen, Microsoft knew that Elon, uh, publicly advocated for AI safety. This
is something you heard the testimony from the lips of the, of the CEO of the
company, Satya Nadella.
Um, and
he, he said that right here in, in this courtroom.
He j- his testimony was, his quote, "I knew that he was concerned about AI
safety,
and I a-- and he also, I think, had deep concerns on AI being cornered by one
company.
And so therefore, that's why
he was, you know, personally dedicating himself to build AI."
Um,
and the day after OpenAI launched, Nadella emailed the link about the announcement.
Remember that, that we saw earlier in this?
Um, he emailed that to a bunch of senior executives at, um, at
Microsoft. Um,
and the announcement clearly says-- Let me just put it up really quickly.
Okay, we don't have to bring it up, as you've seen it before. But it basically,
you know, clearly says that, um, it's a nonprofit organization, and that, and that
Elon is one of the funders and founders.
Um, they knew that the profits, um, um, from their donations and the
assets, um, had to be used to advance the mission. Nadella himself being a trustee
of a prominent nonprofit.
Um, and he testified that, um,
he knew that E-Elon was a major donor. That was his testimony.
Microsoft executives, Kevin Scott and Michael Walter, both testified that they
knew Elon Musk was involved
in OpenAI's founding and was an early donor. Um,
and in two thousand and sixteen, there's an internal presentation that Microsoft
does when they're thinking about doing more,
um, compute with OpenAI,
and it's defined in this deck, which is, uh, plaintiff's exhibit two two nine,
uh, as a high pro-profile nonprofit organization, and it identified Elon as a
founder.You heard Kevin Scott, who testified yesterday, tell you that he knew
nothing about OpenAI's open source practice, but his email says something
different.
I'll direct you to exhibit two two nine, where, um, it's clear that
he does know that.
Microsoft's executives were told in January of two thousand and eighteen that
OpenAI had been sharing their work openly for their basic tenet. That's what he
calls it in the email, two two nine. Basic tenet, which he says is open.
Um,
Microsoft knew that-- about the intent to breach.
They were interested in supporting the high pro-profile nonprofit. They knew that
it was a nonprofit and that they had to follow their nonprofit vision.
Uh, again, that statement that I said to him, "Enough with the charity and on with
the business," and he agreed to that.
Um, Kevin Sco-Kevin Scott, this is kind of interesting, you know, he spotted the
risk that this would be a problem for Microsoft to get too, you know, deeply
into it in the first investment in, um, two thousand and eighteen. And he wrote
this email
saying, "I wonder if the
OpenAI donors are aware of these plans." And then,
um, basically, that notion of building a nonprofit on the back of, um, uh, this
thing on the back of a nonprofit. And Microsoft did some diligence, satisfied
themselves that the billion-dollar investment cap profit or two billion
dollar investment cap profit,
no twenty percent
increase like the twenty twenty-three deal had, no broad, broad,
um, obtaining of IP rights like the twenty twenty-three deal had, that he satisfied
himself that, uh, or they satisfied themselves that, that that was okay. And
like I said, there's nothing wrong with having a for-profit or a partnership with
a for-profit and nonprofit, but there are limits. And, you know, they exceeded those
limits, and they had
features of the deal that made it
no longer subservient to the nonprofit.
Um,
things changed with the ten billion dollar investment. We've talked about that.
And, um,
in their, in their diligence, they reviewed,
uh, the Delaware certificate
that I showed you before and put up a number of times, which says, "No part of
the, of the income or assets of the corporation shall ever inure to the
benefit of any private person." Private person includes Microsoft.
Person can mean corporation.
Um,
and they also reviewed the IRS documents,
and they also indicated that they were supposed to-- they intended to make
research freely available.
So it's all there. It's all in the documents that, that you will have for
your deliberations.
Substantial assistance.
Um,
you remember at the end of Satya Nadella's testimony, I asked him some questions
about, you know, had,
had Microsoft done a thirteen billion dollar deal the year before,
year before that, year before that? He said, "No."
He didn't use the word never, but he said, he said no, certainly.
And he, he called it a really big deal, really significant,
um, in his testimony. So
this was a big-- Thirteen billion. He was saying, "Well, we took a risk." Well,
yeah, they took a risk, but Microsoft doesn't take a risk unless they're
convinced that they're gonna get a return on their investment. They can't. They're--
They have a fiduciary duty. Just like the people involved in the nonprofit have a
fiduciary duty to the nonprofit's mission, Microsoft has a duty, a fiduciary duty to
maximize th-the shareholder value, to do the best for the shareholders, to create a
profit. So they were very calculated. They, they weren't just doing this to
experiment, to see how is this gonna work. They thought they'd make a lot of money,
and they drove a hard bargain to do that.
Um, Mira Murati testified about how they set a hundred million dollar revenue goal
and, um, how important that was.
Um,
so
through this, um,
twenty twenty-three investment, the safeguards that they
thought were in place for the first two deals were gone,
and that's where the problem arises.
So, um,
you heard
Mr. Nadella saying,
um, "I don't want to be IBM and OpenAI to be Microsoft."
And,
uh, you'll recall the testimony for yourself.
Um,
I might characterize it differently than, uh, Mr. Savitt might or, or, or, or, or my
friends over at Microsoft might. But I think if you
think back on that testimony, it was pretty clear that they didn't want to be
left in the dust. That's what they were concerned about.
Um, and
the other thing that
he was very clear about, and he and I went back and forth on this. You remember it.
I, I, I really would have liked you to look at this in exhibit two fifty-nine.
Remember he said we went back and forth about IP rights, and he said, "Know-how."
He and I went back and forth on that. And it's clear that they were pushing. He's,
you know, he said, "We need to control our destiny," you know, and that meant
getting
the rights, getting
what they could. So, um, it
far exceeds what was done before.
And of course, you have the eye-popping returns that we talked about.
And
the other thing they did is when they fired Sam Altman, we talked about how that
was a governance failure
for OpenAI.
Microsoft
is not
held to that, that same
standard because they're not-- they don't have that same, same duty as the OpenAI
directors in terms of the governance of OpenAI, the nonprofit.
But they certainly helped them,
not just through their commercial terms. But you heard about what happened the
weekend that Sam Altman was fired.Talked to Satya Nad-Nadella and Kevin Scott
almost right away. Was on the phone with them all weekend.
Um, offered them, offered jobs to Altman and Bachman.
Over the course of the weekend, offered,
with the help of, um,
Mira Murati and, and, and some others, jobs to other
OpenAI employees. They were basically saying, you know, "We'll take, we'll take
you all,"
at the cost of about twenty-five billion dollars. And it's a big expense, and it
was-- It came as a year, at a year that Microsoft had just laid off a bunch of
people the year before.
So this was a real commitment that they were making 'cause they didn't wanna see
OpenAI disintegrate. They didn't wanna see the people get hired by Google or get
hired by, um, any, any other
company that would be developing AI. It's a big deal.
Very big deal. And in the end, you remember too, um, I showed him the text
message chain between he and, um, Altman about directors. There were actually, uh,
Kevin, Kevin Scott was on it, and Bret Taylor was on for part of it. And they
were, they were
offering names for the nonprofit, and you heard Professor Schizer talk about that,
talk about, um...
There's one where he says, "No,
uh, strong no."
And they also
produced, uh, certain names, offered up certain names. And
in the end, when Altman decides, you know, "This is what I'm willing to do, how
about this board?" And he proposes one of the people was Larry Summers,
that Nadella didn't know.
And Nadella said, "Can I call him tonight?" And Altman said, "Yes."
So
the for-profit partner, the commercial partner in the for-profit
entity,
was exercising control over the nonprofit. I mean, giving Microsoft the right to
approve or disapprove a director... Now, we heard testimony from Micro-- or we
heard questions from Micro-Microsoft's lawyer where he said,
"Oh, don't people call you all the time for advice on who should be on a board, or
would this person make a good director?" That may be true. They may, okay? That's
not what this was. That's not what this was. This was
exercising, you know, control through
participating in that decision, and that is not something that they can do.
So that is substantial assistance in the breach.
Doing it in the first place was a breach on the part of the OpenAI defendants, and
Microsoft provided that substantial assistance, and it was a substantial
factor. The substantial factor,
um,
in harming Elon was
thirteen billion dollar investment, expanding the TRAs, the commercialization,
aggressive action after OpenAI board fired the CEO for lying,
and then control over OpenAI's IP. So without Microsoft and, and its enormous
resources that it brought to bear in the situation, and its active engagement, it
wasn't like it wrote a check and said, you know, "Go, go take care of things." The
active engagement of people at the very highest levels of the company, the CEO,
the chief technology officer, the chief financial officer,
um,
they deployed extensive resources,
and without them, Altman and Bachman could not have looted
the nonprofit's assets as they have
and, uh, built it on the back of this, quote, "nonprofit thing," as
it was called in that earlier email. So the evidence showing Microsoft's
substantial role is absolutely clear, and
that's evidence that proves all three of our claims.
All three of our claims.
Far beyond a preponderance of the evidence.
Far beyond a preponderance of the evidence. All we need to prove is by a
preponderance of the evidence, but that evidence gets you much, much farther.
Um,
they raise a technical defense called the statute of limitations, right? They're,
they're claiming,
you know, we brought the suit too late. That Elon brought the suit too late.
The evidence was very clear that Elon learned of the twenty twenty-three
Mi-Microsoft deal
in Oc-October twenty-second
of twenty twenty-two. How do I know that specific date? Because there's a text
message from Elon to Sam Altman, and it contains an article that talks about the
deal. The deal hadn't closed yet. It was closing in twenty twenty-three. But it
describes the deal, and Elon is saying to him in this text message,
uh, this is the article, um, which is Plaintiff's Exhibit two ninety-five. He
actually sends the article to Altman, and in it, you know, OpenAI is valued then at,
at twenty billion. It's valued at much more now. Um, and it says, "In advanced
talks with Microsoft for, for..." And Elon was upset.
He sent, um,
the text message, and, and you, you saw that. This is where he said,
um, "Seems like a bait and switch. This is a bait and switch."
And he expresses concern about, um,
Microsoft. Says, um,
"For sure what rights I can..." And Altman's response,
Altman's response was,
"I agree this feels bad. We offered you equity when we established the capped
profit, which you didn't want at the time, but we are still very happy to do that
a-at any time you want." But what was Elon's reaction?
He said, "Get out of here.
I'm not gonna do that." I mean, and, and he didn't.
Again, if he wanted to do this as a for-profit, he could have done it. He
didn't need to do it this way with Sam Altman, you know,
basically stealing a charity.
And Altman's response wasn't, "Gee, I'm sorry about this," or, "I thought you
knew," or anything like that. Nothing like that. His response was, you know,
"We're happy to give you equity."
Elon called it a bribe. You can call it whatever you want,
but that's what he called it. So
that defense, um,
goes nowhere. They're gonna try to wave around, uh, emails or
Chrome sheet or whatever it is that they're gonna try to put up and try and
convince youUm, that somehow or another Elon knew that
what happened in twenty twenty-three, he knew that somehow before.
Th-th-the breach occurs
later. It occurs here in twenty twenty-three in the ways that I described
to you.
So, um,
the statute of limitations defense is not, is not
supported by, by the evidence, quite simply. Don't let them try to trick you
into thinking that it is.
I have an opportunity since I'm the plaintiff to get to speak with you again,
and
I can tell by the looks on your faces you're all super excited this could happen
[laughs].
But, um,
uh, so
I'm gonna sit down.
Thank you. Few other things when I get back,
and,
uh, including some of the things that they're gonna say. But thanks very much,
really appreciate having this with
-you. -Okay. We're gonna go ahead and stand and
stretch while, uh, Mr. Savitt, um, gets ready.
Go on in the...
And if you want, you can
stretch.
Yes, thank you.
Oh,
pardon
-me. -Ms. Eddy, is this a, is this a different
one?
That you gave, you all gave me one earlier.
-Uh, something [laughs] -It's, it's, that's, it, it's your size
[laughs]. It's all right.
-You like that a little bit more. -Charlie. Charlie. Charlie.
That you all, yeah, you all gave me one this morning.
-It's another way I needed [laughs]. -You need to think about it. That's how you
tell.
No, go.
Okay.
What if it's so
little?
[background chatter]
I
thought it was Mr. Savitt.
-Are you prepared? -Ready.
Okay.
-Uh, we are back on the record. -[laughs]
-Ms. Eddy is at the, uh, podium. -Thank you. Okay.
[background chatter]
Proceed
as soon as you're
ready.
Can people hear me at the microphone?
What?
-No. -Again, I would pull it down and then flip
it up a little bit so it catches your voice.
-Like this? -Yes.
-Okay. -Thank you.
Um, good morning, members of the jury, and it is, uh, it's a pleasure to, uh,
finally address you after these several weeks.
Um, Elon Musk has tried to persuade you that
-his years- -Hold on. We're getting some feedback. Let
us...
-Try to lower the volume. -Colin, can you
push that mic down? I don't know what the-
-It's off already, yeah. -Okay.
Is this still echoing?
-All right, let's try again. Go ahead. -Okay.
Can people hear me?
All right.
Um, Mr. Musk, he has tried to persuade you
that his years-ago donations to OpenAI
came with specific strings attached,
that these strings were strong enough to last forever, to tie OpenAI up in knots
as it tries to pursue its mission,
and that these strings gave Mr. Musk perpetual rights over OpenAI.
But Mr. Musk has come nowhere close
to making that case.
Even the people
who work for him,
even the mother of his children,
can't back his story.
No one in this case,
other than Elon Musk,
has testified to commitments or promises
that OpenAI or Sam Altman or Greg Brockman made to Mr. Musk.
No documents corroborate Mr. Musk's story,
and that's because no commitments or promises were made.
No restrictions were placed on Mr. Musk's donations. There are no real claims here,
members of the jury.
And ask yourself,
if
what Elon Musk really believed was that AGI had to be pursued within a nonprofit,
open-source company,
don't you think he'd have launched his ownCompetitor AI company as a nonprofit
open source company. That is not what he did.
He launched it as a for-profit,
as he does every, every other company that he's launched.
But
common sense and the law and the evidence, uh, don't, don't feature all that
prominently in Mr. Musk's case.
Because a lot of what you've heard from plaintiff in opening and throughout this
trial, and now in closing, is sound bites and irrelevant false accusations.
Mr. Musk accuses defendants of stealing a charity.
The truth is that through the work of Greg Brockman, Sam Altman, Ilya Sutskever, the
many other people who have poured their hearts and souls into OpenAI since Elon
Musk abandoned it in twenty eighteen,
the OpenAI Foundation is now probably the best-resourced nonprofit in the world.
It has roughly two hundred billion dollars in assets.
It operates under the oversight of not one, but two state attorneys general in
deploying these assets to help make AGI turn out well for humanity.
And the nonprofit
still controls the for-profit, which is now, as you heard, a PBC.
Mr. Musk says--
Mr. Mullow says that Sam Altman
can't be trusted.
And the truth is, as we will talk about, Mr. Musk is the one whose testimony is
contradicted by every other witness and by all the documents.
And the evidence shows that ninety percent, an astounding ninety percent
of OpenAI employees demanded that Mr. Altman be reinstated after the people who
removed him couldn't give a coherent explanation for why they decided he lacked
candor. Now,
Mr. Mullow spent a lot of time attacking Mr. Altman's credibility in his closing,
based in part on Mr. Mullow's own questions that he posed to the witness.
And questions, as you heard from Judge Gonzalez Rogers,
are not evidence.
Mr. Mullow has his questions. He has his characterizations.
You need to exercise your own judgment about who's telling the truth here.
Mr. Musk, the witness who
no document,
no other witness corroborates,
or Mr. Altman,
whom every other important witness in the case corroborates and whom all the
documents corroborate. You make that judgment. Now,
our project, and this is going to be a joint project, Mr. Sabot and I are both
going to address you. Our, our project will be to focus on the facts and on the
law,
and to set aside the false accusations having nothing to do with the rights that
Elon Musk now claims he has over OpenAI.
Um, but because Mr. Musk's counsel has told you for about two hours what you
should think,
we're now going to show you what the evidence demonstrates. We'll examine
together how the pieces of, of the jigsaw puzzle come together.
We do have a lot of ground to cover, and, and we'll walk through with you just how
the evidence that you've seen and heard
over the past few weeks,
not just from the defendants, but from Mr. Musk's own witnesses,
how all that evidence defeats Mr. Musk's claims.
And we will not be able to cover every piece of evidence.
Um, there's honestly too much of it,
but we will try to hit the highlights for you here.
Uh, then we will turn to the affirmative defenses,
uh, the reasons why Mr. Musk
couldn't proceed with-- couldn't bring a claim even if he had one.
And here we're gonna start with the statute of limitations,
which is actually the first issue that you'll need to address when you go back to
the jury room.
Um, so you'll wanna keep the timeline in mind here as we talk through the evidence.
Mr. Musk left OpenAI in twenty eighteen.
His last contribution of any kind was in twenty twenty.
This case was filed in August twenty twenty-four.
The statute of limitations for Mr. Musk's charitable trust claim
is three years.
The statute of limitations for his unjust enrichment claim is only two years.
What that means
is that if the things Mr. Musk is complaining about today
are things he could have complained about before August fifth, twenty twenty-one,
then he can't win.
And as we will show, that is exactly the case.
Well before August fifth, twenty twenty-one, Mr. Musk knew or could, with
reasonable diligence, have discovered the facts he now says give him a basis for a
lawsuit.
Now, as Mr.
Sabot told you during his opening,
and as you've now seen for yourselves, in this case, the statute of limitations is
not a technical defense.
It's a textbook case, this one, for why we have a statute of limitations defense in
the first place. So hope people don't run into court years after the events in
question,
manufacturing claims at a time that's convenient to them,
when memories are faded and evidence is lost.
Finally, after the statute of limitations, we're going to address the other two
affirmative defenses that we have here. Um, and we bear the burden on those.
So
they only apply if m-- if you find that Mr. Musk has a claim,
but we bear the burden if you found that he did.And those two defenses are latches
and unclean hands. We'll explain how M- how Mr. Musk's calculated delay in
bringing this case
and his bad conduct related to his claims
mean that he could not bring a claim even if he had one,
which he doesn't. And that brings me to the first claim, the charitable trust
claim.
The, the theory of this claim, as you've just heard,
and have heard all, all through this case, is that when Mr. Musk donated
thirty-eight million dollars and four Teslas to op- the OpenAI nonprofit from
twenty sixteen to twenty twenty,
he secured commitments from OpenAI and Sam Altman and Greg Brockman to him
personally, Mr. Musk personally,
that the OpenAI nonprofit would stay a nonprofit
and would open source its technology.
You now know that is not what happened. Mr. Musk didn't leave OpenAI with
commitments from anyone to do anything.
And just before we dive into the elements of the claim,
I, I wanna just briefly recap
what the evidence shows about Mr. Musk's relationship with OpenAI from the early
years when he was actually there.
Before OpenAI launched,
Elon Musk promised to fund it to the tune of a billion dollars.
And he thought at first it should be a for-profit co- corporation. That is what
the document shows. But it launched as a nonprofit.
By twenty seventeen,
everyone associated with OpenAI realized that pursuit of its mission would require
far more money than could be raised by a nonprofit.
You heard this from witness upon witness in the case. You heard it from Elon Musk,
Sam Altman, Ilya Sutskever, Greg Brockman, Tasha McCauley.
This is essentially uncontroverted.
And at that time,
in twenty seventeen, Mr. Musk wanted to turn OpenAI into a for-profit company that
he could control.
But the other founders
refused to turn the keys of AGI over to one person, let alone Elon Musk.
And we're gonna see a lot of this document here today. You've seen a lot of it
during the trial. This is the Honest Thoughts email thread from September
twenty, twenty seventeen,
when the four initial intense for-profit negotiations fell apart.
This is where Greg Brockman and Ilya Sutskever stood up to Elon Musk.
And shortly after they did that,
Mr. Musk sought to merge OpenAI into Tesla.
But the other founders rejected that idea too. They didn't want to be absorbed into
Mr. Musk's empire.
So Mr. Musk picked up his marbles.
He went home, declaring that OpenAI would have zero chance of success.
Those were his parting words.
And w- we're gonna get into much more detail about these early years, this, this
early part,
but that's the basic framework.
It's what we told you the evidence would show at the beginning of this case, and
it's what the evidence has shown.
What the evidence has not shown
is any breach of charitable trust.
Now,
to prove this claim,
there were three things that Mr. Musk needed to establish.
First, he needed to prove the existence of a charitable trust.
Second, he had to prove that any supposed trust still existed
by the time of the breach, twenty twenty-three.
Third, he had to prove that his donations were misused.
He had to prove all three of those things, and he failed on each one of them.
So first, let's start with the existence of the trust.
Remember Jud- Judge Gonzales Rogers's instructions.
To have a charitable trust,
it's not enough to make an outright donation to a nonprofit to be used for
general charitable-- for general purposes.
Instead, you need to have a donation
for a purpose that's both charitable
and specific.
If you donate money to a hospital, that's charitable, but it doesn't give you a
charitable trust.
If you donate to a hospital specifically to support medical research on a
particular disease,
that might give you a charitable trust. It might,
but only
if you also properly manifested an intent to create the trust,
which means you need to have communicated it,
communicated an intention
to impose an enforceable obligation.
So that's what Mr. Musk needed to prove
to prove the existence of a charitable trust. He didn't meet that test.
First of all, all the documents and all the testimony
show that he gave money to OpenAI for general purposes, general charitable
purposes, to advance OpenAI's mission,
not for some specific charitable purpose. So let's just review his contributions.
One thing Mr. Musk gave to the OpenAI nonprofit was about twelve million dollars
from twenty sixteen to twenty twenty to help cover rent and building expenses.
This was the money that Mr. Musk, you heard, contributed so that OpenAI could,
uh, turn around and cover Mr. Musk's lease payments on the building that housed
OpenAI and Neuralink.
And these rent and building payments,
they do not meet the test for a charitable trust. Some of them are specific
insofar as they are earmarked for rent.But that's not a specific charitable purpose,
right? That's, that's... A specific charitable purpose is something like
donating to a hospital to support medical research on a particular disease.
It's not rent or salaries or office supplies.
Those are for general,
general use by, by the nonprofit.
Next, um,
Mr. Musk
gave the Teslas, the four Teslas in 2017, um, and he took tax deductions for those
as charitable donations to the nonprofit.
You heard that what they were really for, um, Musk gave them as bonuses to four
employees, including Greg Brockman
and Ilya Sutskever,
um, right as the conversation about pivoting to a for-profit OpenAI began.
And as the negotiations
over the new OpenAI for-profit
heated up a bit,
Mr. Musk rushed the production of those cars to soften up Bro- Brockman and
Sutskever, so that they would accept the terms that he wanted. And you, you
remember this text message,
this exchange, uh,
from, from Dr. Sutskever, "At least we're getting our Teslas. Will a Model 3 make
you willing to accept massively unfavorable terms?" And you'll recall Greg
Brockman testified that's the day that Elon Musk proposed 62.5% of the
new for-profit would belong to him.
But let, let's say for a moment that the Teslas count as charitable donations to
OpenAI.
Um, they still don't meet the charitable trust test
because as with the rent payments, there was no specific charitable purpose here.
There was no...
They, they were to specific employees, not specific charitable purposes.
So to the extent the Tesla gifts were charitable at all, they were for general
purposes.
So that leaves the $25 million
in quarterly donations that Mr. Musk gave the OpenAI nonprofit starting in
final payment gets actually gone through in June 2017. You saw that from Mr. Dudni.
These don't meet the charitable trust test either. They were all given
for OpenAI's general purposes and not for restricted purposes.
The documents show it.
Here are the Form 990s, the tax reports that OpenAI filed every year, in which it
had to disclose whether it had any restricted assets.
You see those boxes are all blank
because OpenAI had no restricted assets to report.
Here are the letters
from Mr. Musk's donor-advised funds, the entities that actually paid the gifts to
OpenAI.
These make clear the gifts are for general and not specific charitable purposes.
They're to be used for OpenAI.
Not a single document shows any specific purpose for any of these quarterly
donations,
and Mr. Musk's own witnesses confirm that there were none. Jared Birchall, the head
of Mr. Musk's family office and the man in charge of his charitable giving,
testified Mr. Musk never told him of any specific purposes.
If not the man in charge of his charitable contributions, then who?
The answer is no one.
There were no specific charitable purposes here, no special commitments to Mr. Musk
about how his money would be used. Every one of Mr. Musk's cofounders told you
that.
Greg Brockman said it. Sam Altman said it. Dr. Sutskever said it too.
Here's his testimony.
It was here a moment ago. Um, [laughs] he said, "Do you recall ever conditioning
donations to OpenAI on the organization remaining a nonprofit?"
Answer, "I have no such knowledge."
Even Musk's own witnesses said it, not just Jared Birchall,
but his own senior advisors.
Here's Siobhan Sylas.
So you don't recall any restriction placed on Mr. Musk's donations that required
OpenAI to remain nonprofit and open source, do you? Answer, "I don't."
And S- Sam Teller too, the witness who, who appeared by deposition, I think
yesterday.
As far as you know, did Mr. Musk impose any conditions on the use of his donations
to OpenAI? "I don't know."
Did Mr. Musk ever tell you there were any conditions on his donations to OpenAI? "I
don't remember."
All these witnesses say the same thing.
No specific commitments were made to Mr. Musk.
And
you know Mr. Musk knows very well,
by the way, what specific
terms and conditions on donations look like
because you remember this email that we saw between him and Sam Altman back in
2016
asking to see the exact terms and conditions because gifts are only as good
as the T and C, the terms and conditions.
Mr. Musk did not get terms and conditions on his own donations. He gave them for
OpenAI's general purposes without restriction.
And really,
this is where the claim should end.
If the donations came with no restrictions, with no specific charitable
purpose, with no strings attached, then Mr. Musk does not have a charitable trust
to enforce.
Now, Mr. Mullowe
spent a lot of this trial, and a lot of his closing argument
focused not on specific charitable purposes, but on OpenAI's general purposes
and missionHe asked witness after witness about the original certificate of
incorporation for the nonprofit.
He asked about that blog post introducing OpenAI, which launched the company.
He asked about the charter that OpenAI published in twenty eighteen on its
website after Mr. Musk left
the company.
Mr. Musk-- or Mr. Mullo also showed you
emails from before OpenAI was founded
that are talking about what the mission will be
and how it'll be structured.
And
remember Mr. Mullo asked you in opening as the very first question that you should
ask yourselves and answer,
did OpenAI have a charitable mission
to operate as a nonprofit to develop safe AI open source for the good of humanity?
That was his question.
That is the wrong question,
and these are the wrong documents that he's focused on.
Because even if OpenAI had somehow violated its general charitable purposes,
and we will get to that,
it did not, it has not violated its general charitable purposes. But even if
it had,
that wouldn't give Elon Musk a right to sue.
If a private person wants to sue a nonprofit, he has to show that he properly
manifested an intent to further a specific charitable purpose,
and there's nothing like that here.
It is not enough to point to general mission statements.
So where does that leave Mr. Musk?
Um,
well,
he
has to try to argue that you can infer
an intention to have the donations applied only to specific purposes rather than for
OpenAI's general purposes. That has to be the argument.
And
the restrictions, it seems, can be,
the argument seems to be, can be implied
not from any contract,
not from
specific things written down,
but from discussions and interactions generally.
And to be clear, this is coming from a man who, who told you
he's so literal
you never need to read between the lines with him. This is what Mr. Musk says about
himself,
that if he wants to say something, he says it clearly.
You don't have that in this case.
You have an argument about what can be implied from course of dealings.
And
you have an argument that everything that happened was between the lines.
But what's between the lines is really, as the evidence has shown, it's just blank.
The, the, the restrictions that are at issue here
that seem to be
what are being advanced
is first
that any OpenAI for-profit would only ever fund the nonprofit, right? Like a museum
store. Uh, that seems to be the argument, that that restriction was imposed
implicitly through the dealings between Mr. Musk, Mr. Brockman, Mr. Altman, and
OpenAI.
And second,
that OpenAI would open source all of its technology absent safety concerns. Or as
we heard today, I think for the first time, uh, if it's practical and reasonable
to open source. So that's the new restriction.
As we will review,
the evidence does not remotely show either of these things. And I'm not just
talking, by the way, about the direct evidence, the circumstantial evidence.
There's nothing here.
And keep in mind, as we're talking about
this, these, these implied restrictions,
Mr. Musk has to show again that he communicated, that he intended to impose
an enforceable obligation to devote the trust property to the specific purposes
he's now claiming.
The specific purposes cannot just be in his head.
And if the purposes aren't spelled out in writing,
then Musk has to prove the existence of the terms of an oral trust
by clear and convincing evidence.
So keep those instructions in mind as we're reviewing the documents and the
witness testimony from the early years of OpenAI.
But under any standard,
Mr. Musk comes nowhere near proving these restrictions he says were somehow mapped
onto his donations.
Let's start with the first
alleged implied restriction, which
again supposedly limits the size and kind of for-profit that OpenAI can have.
And y- you may have noticed
that I'm str- struggling a bit to articulate quite what this restriction is
supposed to be because it has been a moving target throughout this trial.
Um,
early in the trial, Mr. Musk suggested the only for-profit that OpenAI could create
was a small adjunct to the nonprofit. In fact, Mr. Musk said it twice in the space
of a minute.
But no document anywhere uses that term.
No one had ever heard about this small adjunct before this trial.
Greg Brockman testified
about that. I literally never heard those words really until the beginning of this
trial.
Ilya Sutskever
said the same.
Do you ever hear him say that any for-profit must be a small adjunct to the
nonprofit? No.
And the phrase, in fact, is such a novelty that when we used it in questioning Mr.
Brockman, you'll remember Mr. Mullo stood up and said, accused us of making up the
term. The judge had to instruct you
that, in fact, that wasn't the case.That in
fact, this phrase came
from Mr. Musk. It's the theory of his case.
But it's been phrased differently throughout this trial.
Um, now the for-profit has to be subservient to the nonprofit,
or it can only fund the nonprofit,
or sometimes it has to have a profit cap. Those are the things we've heard.
And
it doesn't really matter how you frame it though,
members of the jury. It is all made up.
And how do you know that?
You know it the same way that a diligent accountant
decides what taxes are owed. You check the records.
The same way that a healthcare provider decides what medication to prescribe,
what the history of the patient is, you check the records.
So let's look at the records.
And let's start with Mr. Musk's own statements around the time that OpenAI was
formed and in its early years, even before the for-profit negotiations began.
You will recall
that Sam Altman and Greg Brockman had the idea to set up the new AI lab as a
nonprofit. It, it was going to be a nonprofit arm of Y Combinator. That was
Mr. Brockman's testimony.
And
that's where
Sam Altman was president at the time.
And when he heard about this structure, Mr. Musk thought it was not optimal,
that a better structure
would be a C corp with a parallel nonprofit.
Not a small, small adjunct
for-profit, not an engine to fund the nonprofit, but a standard for-profit with
a parallel nonprofit.
And now Mr. Musk did ultimately agree with Sam Altman that a pure play
nonprofit structure made sense to start. And we've talked about this email.
Mr. Molla showed it to you again earlier today.
He didn't show you the one
a year later when Mr. Musk doubted whether a nonprofit had been the right call.
"I'm concerned," he writes, "that OpenAI is not on a path to catch up. Setting it
up as a nonprofit might, in hindsight, have been the wrong move."
And he didn't show you the texts
from 2017
where Mr. Musk,
um, Mr. Brockman's reporting to Siobhan Zillis a conversation he had with Mr.
Musk,
where Mr. Musk said he thought a change from the nonprofit structure
was needed.
Now, there is not a word in any of these documents
or any others from Mr. Musk's time with OpenAI about any restrictions on the kind
of for-profit that OpenAI could consider.
Just a repeated thought from Mr. Musk that maybe a for-profit
would work better.
Then let's look at what the records do show about a potential for-profit.
And that brings us to 2017. In mid-2017,
as they were working on the Dota 1v1 project that you heard about, that video
game,
Greg Brockman and Ilya Sutskever started realizing that way, way more money was
gonna be needed to further the mission of building beneficial AGI because way,
way more compute, this computing power,
was going to be needed than was initially contemplated.
And everyone,
everyone including Mr. Musk, agreed that donations to a nonprofit would not suffice
to fund the mission.
More was needed, billions were needed,
and it would require a pivot to a for-profit,
at least in part.
And here's Mr. Musk in July 2017 suggesting
it's time to change course. He says, "Maybe another reason to change course."
You saw this email after, um,
i- in connection with him circulating that,
uh, article about China's advances in AI, and he writes to his co-founders.
He also writes, "I have a tentative game plan."
And you heard testimony from Mr. Brockman about
what that tentative game plan turned out to be.
He met up with Mr. Musk after this email
to discuss the plan,
and the idea that Mr. Musk shared was they would change to a for-profit once OpenAI
had a big win.
Then they did have that big win.
About three weeks later,
OpenAI's Dota 2 technology beat the world's best human at the 1v1 version of
the game,
and the win was a huge milestone for OpenAI.
The next day,
Brockman,
Sutskever,
Siobhan Zillis,
they were all at the tournament, the Dota tournament in Seattle. They flew back to
the Bay Area for a meeting at the haunted mansion that Mr. Musk had just bought.
And for Mr. Musk,
the Dota win was the triggering event. This was the triggering event.
You heard what was discussed at the meeting on August 12, 2017. Now, Mr. Musk
claimed he couldn't remember,
but as he apparently did not realize until this trial, Siobhan Zillis was taking
notes,
and those notes tell you what you need to know.
"Switch to for-profit in next couple of weeks. Whoa, fast."
A little further down, "Keep a subset of people at OpenAI nonprofit."
The bulk of the people were gonna go to the for-profit.
Now, from August 12th, 2017, and in, uh, over the next six weeks or so,
Mr. Musk and his co-founders engaged in what Greg Brockman and Ilya Sutskever
described as the most high-stakes
negotiation they'd ever had.And you recall Mr. Brockman walked you through the ups
and downs of those six intense weeks, the negotiations with Mr. Musk over equity
splits and control and who was going to be CEO, and the go-forward corporate
structure.
These were not discussions about a small for-profit
or a for-profit that would exist simply to fund the nonprofit, like a museum store.
They were about a switch to a for-profit.
You saw
the documents,
we can move to them,
uh, between Mr. Musk's own staff
discussing the idea of a complete conversion
in which the nonprofit would be shut down.
No, no matter
what Mr. M-Musk and Mr. Mollo tell you, this was one of the options that was under
serious consideration.
The documents tell the truth here.
Here's, here's one of the documents we were looking at.
Uh, this is DX664.
The two options on the table for the operating structure. The first one, roll
everything into a B corp, would include all of OpenAI. B corp is a for-profit
corporation, as you heard.
Ms. Zilis acknowledged under questioning that converting from a nor- a nonprofit
was one of the options being considered.
Sam Teller told you the same thing.
And
there was another option being considered.
This was the parallel C corp while keeping the nonprofit in place.
But in this structure,
there's no hint that the for-profit would be subservient in these internal documents
among Mr. Musk and his staff.
These are more of Siobhan Zilis' contemporaneous notes. They show the
alternative of keeping the nonprofit would have had the main operations,
see at the bottom, cor-- .com, core research and applications. .com is the
for-profit.
So the research, the core research and applications would go to the for-profit.
Most of the employees would go to the for-profit.
And see the note at the top of this summary from Ms. Zilis,
file for C corp immediately.
You heard Mr. Birchall testify that he actually went ahead and did that.
And you recall what Greg Brockman told you about his discussions with Mr. Musk in
this time period.
They were planning to have the intellectual property, the, the assets of
the operation, move to the for-profit,
and the employees as well.
These founders were negotiating equity splits and control provisions, who would
be CEO.
The negotiations were intense. This was not about a subservient for-profit arm. It
was about the core structure in which OpenAI would pursue its mission going
forward.
And as witness after witness told you,
OpenAI's mission
wasn't necessarily tied to its structure as a nonprofit. This is Ilya
Sutskever. The mission, he says, the mission of OpenAI is larger than a
structure. The mission was and remains to ensure that AGI benefits all of humanity.
You can't build AGI
or distribute its benefits
unless you have the resources to do so.
You've heard that from every witness, virtually, in this case.
And if you can't get the research or the resources within a pure nonprofit
structure,
then the mission collapses.
You have to make that change.
That's what all the founders, including Mr. Musk, understood as early as 2017.
Um,
now Mr. Mollo
showed you-- I'm gonna show how un-tech-savvy I am right now, but Mr.
Mollo showed you that--
the snippet from Mr. Brockman's journal
where he refers to the philanthropic endeavor, and I'm gonna hold up the slide
that
Mr. uh, Mollo showed you,
the snippet that says, "Elon wanted OpenAI to remain essentially philanthropic
endeavor."
Um, you heard Mr. Brockman--
This is a snippet from, from one of Mr. Brockman's journal entries. And you heard
Mr. Brockman des-describe that conversation with Mr. Musk.
He, he was taking notes, right, of what Mr., Mr. Musk said.
And Mr. Brockman explained
that
what Mr. Mollo's selective quoting the language from the, from the journal
was distorting, which was the philanthropic endeavor
was about the re- the remaining nonprofit. So it was in this parallel structure. He
was talking about philanthropic endeavor,
not the for-profit that they were creating. And if you read back in the jury
room, this is PX one fifty-four, the actual entry. You'll see it reads,
"To something which is essentially philanthropic endeavor and is B corp or C
corp or something." That's the part that was left off this slide.
Perhaps the clearest evidence that the 2017 discussions were not about a, a
vehicle just to fund the nonprofit
is the document that we've seen a lot in this trial and already in my remarks to
you, the honest thoughts email chain.
Um, and here again, this is the document that essentially ended the six weeks of
intense negotiations over the for-profit structure.Greg Brockman and Ilya Sutskever
dra- drafted it up.
They previewed it for Mr. Altman, then sent it to Mr. Musk and Mr. Altman as
well. And you see
this
in the, in the slide and in the document. The current structure provides you with a
path where you end up with unilateral absolute control over the AGI.
You stated that you don't want to control the final AGI,
but during this negotiation,
you've shown us that absolute control is extremely important to you.
Now, a-as you're considering this document, ask yourselves,
are these guys talking about the risk of this structure creating
an AGI dictata- dictatorship because they're thinking about a small structure
just to fund an existing nonprofit, something like a museum store?
No. Why, why would Mr. Musk care about who controls the for-profit
if the nonprofit was the one that was gonna be in control?
Why would the configuration of the for-profit matter if the for-profit itself
was just going to be a small adjunct to an existing nonprofit?
Why the fear about unilateral control by Elon Musk?
And why would any of this matter if what we were talking about was a museum store?
And the answer is that it wouldn't.
That's, that's not what they were discussing.
What they were discussing was a structure that would house the operations for
building beneficial AGI and deciding how that AGI was used.
And the reason the discussions fell apart was that Elon Musk was demanding
unilateral control.
Now, Mr. Musk says that that's not what happened.
He says he just wanted short-term control
because he was starting to suspect that his co-founders were up to no good.
But the evidence here again crushes that argument
and that testimony.
Uh, Mr. Mulloway kept showing you this document during the trial
in which Mr. Musk says he wants four out of seven board seats,
so he'll unequivocally have initial control,
but this will change quickly.
And Mr. Musk says here the rough target would be to grow the board to twelve
people or even sixteen.
But let's pause for a moment on this document and consider it in the context of
the other evidence, including the honest thoughts email chain that we were just
looking at.
You can see from the face of this
that Mr. Musk is offering
nothing other than his word
about the eventual dilution of his control.
He'll have a majority of the board and unequivocal initial control, which means
he'll be the one deciding whether and when new board members come on.
And you heard from all three of Mr. Musk's co-founders that Mr. Musk provided no
guarantee, no certainty that this control would diminish
as he had suggested.
You heard the testimony that Mr. Musk discussed his children inheriting the
company, inheriting control of the company.
He wanted dominion over AGI.
That's why this was such a high-stakes conversation. Mr. Musk wanted total
control. Maybe, maybe he'd give it up over time,
or maybe not,
but it was up to him, and that was the problem.
There is not a scrap of evidence, moreover, to support Mr. Musk's testimony
that the reason he wanted control was because he doubted his co-founders' good
intentions.
Just look at Mr. Musk's own words at the time before it became convenient to spin
this different story.
They're at the end of this email, the same, same email that we were looking at,
PX-156.
As a closing note, he writes,
"I've been really impressed with the quality of discussion with you guys on the
equity and board stuff.
I have a really good feeling about this."
The truth, um, as the evidence shows,
is that in 2017,
Mr. Musk wanted a for-profit OpenAI,
and he wanted to dominate it. The idea that he was pushing for a nonprofit in
control or for a small adjunct, a subservient for-profit, that is all made
up.
Uh, here is another piece that is made up,
the notion that anyone, much less Mr. Musk,
even discussed profit caps in 2017.
No one did.
That was not part of the discussion with Mr. Musk about the new for-profit, and it
certainly was never something that Elon Musk said should be required.
Uh, Greg Brockman, you heard testify,
the first time he discussed the idea of profit cap was with Josh Akiam
in January 2018.
And you remember,
uh, Mr. Akiam recalled that as well.
January 2018 is after the intense negotiations with Musk over creating a new
for-profit structure had already ended.
No document anywhere in the record from 2017 shows a discussion of for-profit, uh,
uh, sorry, of profit caps with, with Mr. Musk.
It didn't happen.
Um,
and let me address
another thing made up for this litigation. This is the notion that the only
for-profit that Mr. Musk would support and accept was one, again, where the
nonprofit, or sorry, the, the profits from the for-profit would all flow to the
nonprofit.
That makes no sense.
If all the company's profits are flowing to a nonprofit, then the company is not a
for-profit, it's a nonprofit.That's what a, a nonprofit is. And, and you heard
Professor Hemel talk about this museum store example. That's how a museum store
typically operates. It sells souvenirs, proceeds from those sales go to fund the
nonprofit's operations.
The store is not a for-profit. It doesn't have investors.
It doesn't have them because investors, by definition, use their money
to make returns, to make profits.
If all the profits are going to the nonprofit entity and not to the investors,
then an investor can't make a return,
and they won't participate,
period.
And
in all events,
a company that would flow its profits to the nonprofit wasn't what was being
contemplated by Mr. Musk in his discussions with his co-founders in 2017.
Musk was looking to divide up the ownership of the new for-profit into a pie
that gave the biggest slice to him,
smaller slices to the other co-founders,
and a last slice to the existing employees. And look at how they discussed
the equity in this for-profit.
Where in, in this document,
these documents with Mr. Musk's internal team
is the nonprofit's piece supposed to
fit in?
Where do you see any profits flowing to the nonprofit, much less all or most of
them?
Nowhere,
because there was no plan to fund the nonprofit through this for-profit
structure.
You heard Mr. Brockman's testimony on this,
that the plan, as Elon Musk presented it, was if the nonprofit was going to stay,
it would continue to be funded flat at the level that it was, supported by
donations. That's how the nonprofit was going to stay. It wasn't gonna be funded
by the for-profit.
Um, Mr. Mollo a few times has
pointed you to this document during the trial about revenues with excess c-cash
flowing to reserves,
and I mention this because
it's important to look at the date.
This is from November 2015, before OpenAI is even founded,
and way before it became clear that much more capital was needed and that a
for-profit pivot was required.
Some sort of for-profit element would be needed.
That document was not about a for-profit enterprise. It's about the nonprofit
generating revenue,
and it's roughly two years before the 2017 for-profit negotiations.
And by 2017,
Mr. Musk himself was seriously considered, considering,
and even actually formed
a for-profit that was going to effectively replace the nonprofit as the main event.
This is back in 2017. And
you saw the certificate. The B Corp got formed
at Mr. Musk's instruction.
At no point during any of this did Mr. Musk say, "Hey, wait,
we can't do this.
It would violate a commitment you made to me."
So now we've looked at the records from the 2017 for-profit negotiations.
No discussion of a small adjunct for-profit or subservient for-profit, a
for-profit to fund the nonprofit,
or of any caps of any kind.
No possible basis from which to infer a restriction about what an OpenAI
for-profit should or could be in the future.
The record gets even worse for Mr. Musk
when you move later into 2017 and into early 2018
because as the nonprofit is running out of cash,
what is he doing?
He's
pushing to absorb the whole operation into a for-profit company.
Remember, Mr. Musk froze his $5 million quarterly funding in August 2017,
right in the middle of the negotiations.
He did so even though he pledged at the outset to pay, to, to give a billion
dollars.
And by late 2017,
he saw his opportunity, which was to try to pull the talent from OpenAI into Tesla
and build AGI there.
The documents tell the truth on this.
What they show is that Mr. Musk was planning to build a direct competitor to
OpenAI, all while he was still the co-chair of, of OpenAI.
He knew that OpenAI couldn't raise what it needed to build AGI from donations alone,
and his co-founders had given him
clear signal they were not going to grant control to him over a new for-profit.
So he started laying plan-- He-- And they also gave him, by the way, clear signals,
as you heard from Greg Brockman, they were not gonna give him control, new control
over the nonprofit either. So he was losing his bid for control.
He started laying plans for Tesla AI, an AGI lab within a for-profit car company
that he controlled.
Mr. Musk,
you'll recall, denied
trying to pursue AGI at Tesla.
And why did he deny that?
He denied it because it shows two things,
one that hurts his case and one that hurts his ego and his case.
The thing that hurts Mr. Musk's case is that his push to merge OpenAI into Tesla
shows he never cared about the nonprofit structure or about open sourcing.What he
cared about was winning.
Musk thought the best chance of winning, of beating Google DeepMind,
was to go build AGI within Tesla,
where he could do it in secret,
funded by shareholders who wouldn't be clued into what he was doing.
Remember, Mr. Brockman testified about those conversations.
You heard Josh Ackham
tell you about that last address that Musk gave to all OpenAI employees in February
twenty eighteen as he's leaving the company to go pursue AGI at Tesla.
It was all about the race.
It was the opposite of open source and nonprofit.
The nonprofit would disappear at most.
OpenAI would become a B corp subsidiary of Tesla.
You saw those text messages from
Siobhan Zillis to, to Sam Altman.
"You think through a B corp subsidiary of Tesla," she says. That's a for-profit
subsidiary of another for-profit.
Now, the second reason that, that Mr. Musk can't admit the existence of Tesla AI,
this plan to go pursue AGI at Tesla to recruit the top talent at OpenAI to do
what OpenAI was doing but in secret and well-funded,
is that it's evidence of Mr. Musk's failure.
He tried to compete with OpenAI.
He recruited Andrej Karpathy from OpenAI,
then he tasked him with heading up the new AGI lab.
Mr. Musk then left OpenAI to pursue Tesla AI.
He tried to recruit more people from OpenAI.
Thought even, as you saw, about recruiting Ilya Sutskever.
He and Siobhan Zillis discussed that.
He tried to build the AGI lab within Tesla, and it failed.
Mr. Musk does not want to admit that.
But the documents here do tell the true story, and so does Siobhan Zillis now.
You saw her on the stand.
Musk, Tesla AI plan would have seen the end of the OpenAI nonprofit as a
significant organization. It would have seen the end of any openness in OpenAI.
Everything
would have been buried.
See the advantages of burying this in Tesla for stealth advantage.
And Ms. Zillis is saying
that Greg Brockman and Ilya Sutskever,
Sam Altman, they're not
naturally hardwired
as maneuverers.
That's why they're resisting the Tesla AI plan.
So let me turn now to one last category of records of, of evidence that Elon Musk
never thought,
and no one ever gave him reason to think, that the only for-profit that OpenAI could
create was one that merely funded the nonprofit.
That evidence is about the creation of OpenAI's for-profit subsidiary in twenty
eighteen.
You saw Mr. Musk knew there was a plan to do this even while he was getting ready to
leave OpenAI. So this is February twenty eighteen.
This is Ms. Zillis emailing Sam Teller,
Mr. Musk's chief of staff, in February twenty eighteen, reporting Sam Altman's
plans to possibly have a traditional equity offering as a for-profit or B corp.
Here's some more
emails from March and April of twenty eighteen.
In the first one,
Ms. Zillis says Altman is thinking through an instrument where f-- the four to five
large corporates who are interested can invest with a return capped at fifty x
if OpenAI does get some semblance of money-making AGI.
And further update on, in April, Mr. Musk's response,
"Okay by me."
You also saw the four-page term sheet
that has featured so prominently in this case
that Mr. Altman shared with Mr. Musk in August of twenty eighteen.
Mr. Altman met with Mr. Musk at the Tesla building on Deer Creek Road to discuss the
term sheet,
an earlier draft of it.
Mr. Altman testified to this.
Ms. Zillis confirmed that meeting happened, you'll recall.
And then when Mr. Altman sent the term sheet to Mr. Musk, Musk's staff analyzed
it in detail. Both Siobhan Zillis and Jared Birchall examined the term sheet.
So what does the term sheet show? It--
This is a, this is a capped subsidiary i- idea that was
generated by OpenAI, not by Mr. Musk.
It, it wasn't his idea. So it had-- it was different from the for-profit structures
that were being discussed in twenty seventeen with Mr. Musk.
And
here, instead of splitting all the profits among the founders and employees, the
nonprofit itself would get a slice. It would get a capped profit interest in
return for transferring the value of its IP,
and it would get what's called what you heard discussed as the residual interest,
any profits exceeding what the investors would make once they met their caps.
But even though there were these caps,
it was absolutely clear that the idea was to attract private investors hoping to
make returns in the form of profits. That, that was clear.
There would be hundreds of millions of dollars raised initially,
and investors
would, as you see in the term sheet here, get a hundred xThat's what they would hope
to, to make. They would get a hundred X of their investment back if excess
revenues were generated. That's a profit. That's a huge one.
It's, it's math.
We're talking about fifty billion in profits being paid to private investors.
And then there's the employee pool, meaning the equity
that the employees would get,
hundred billion capped target redemption.
And then there's the second fundraise
already predicted and planned
as of twenty eighteen in the term sheet that Mr. Musk sees,
more than ten billion
with a fifteen x, fifteen times
expected target redemption.
Now, Mr. Musk claims today
that the ten billion dollar raise from Microsoft in January twenty twenty-three,
that's what gave him the basis for his claim here.
But the ten billion dollars was right there in the term sheet.
Musk was on notice in twenty eighteen that if revenues exceeded costs one day,
investors could stand to gain fifteen times ten billion.
All of this was spelled out for Musk in that four-page document.
He did not object.
He did not say, "Hey, wait, stop.
This violates a commitment to me."
So how, how does Musk deal with this, right?
Having received this term sheet at the time, having had two witnesses testify
they reviewed the term sheet with him,
and having failed to raise any complaint, how can Musk possibly maintain now
that OpenAI wasn't allowed to create a structure that would eventually raise ten
billion dollars from Microsoft in twenty twenty-three?
He can't.
He just tries to get you to believe
that he stuck his head in the sand, that he was duped or, or something.
And his story keeps changing here. Remember, you saw that long deposition
clip, four-minute clip,
where he's-- he just ended up denying he'd ever
looked at the term sheet.
That's what he did in his deposition, denied it completely.
Then you heard him at trial
say he did read it, but only the purple box.
He didn't read the fine print
of this four-page term sheet.
And his story now is that he took his quick review. He, he, he took that review
and then
took from it
that the profits would flow to the nonprofit,
and investors would not be investing but rather donating. And I'll, I'll pause on
this for just a minute because it is worth a linger.
Here you have one of the most sophisticated businessmen
in the history of the world
asking you to believe he got a four-page term sheet
for a for-profit entity,
that he read only the colorful bit at the top
and somehow read it to mean that no one, no investors would hope to make any
profits,
that he didn't read the four pages because that's fine print.
It is as implausible as it sounds.
A four le-- four-page-- this is a high-level summary. It's, it's entitled,
you'll see it, summary term sheet. That's not fine print. It's a summary. And if you
care even a bit, you read it.
The idea that this document is about donations and not investments is also
ludicrous.
Even Mr. Musk wobbled a bit on that one.
Um, remember we asked him,
"So you think Mr. Nadella and Microsoft were giving a three billion dollar
charitable donation to OpenAI? Is that your testimony?" Musk's answer, "No,
but part of it may have been."
Jared Birchall only had to glance at the term sheet
in twenty eighteen to know [chuckles] that the for-profit was an investment vehicle.
Here's his, his, uh, email from the time.
He reviews the term sheet, and he says,
"Pretty plain vanilla for-profit structure,
so kinda hard to push a narrative that doesn't involve investors being very
focused on ROI."
ROI is return on investment, as Mr. Musk-- or sorry, Mr. Birchall
acknowledged on the stand.
And a return on investment, of course, is profit,
a profit to investors and not to the nonprofit.
Musk knew full well this was an investment vehicle, and he even considered investing
in it himself.
But then he decided not to and to instead be supportive in spirit.
This is M- Ms. Zelis's notes from the time.
Just for awareness, Elon does not need to do the Reid call. That's the call with
Reid Hoffman
to discuss possibly investing in this structure.
Doesn't need to do the Reid call because he's decided to be supportive in spirit of
OpenAI, but not participate in the new instrument.
How could she have written that if he didn't consider the term sheet?
And
you heard
from Mr. Musk's own chief of staff,
Mr. Teller,
that Musk passed on investing in the for-profit, not because he thought it was
scammy,
but because he doesn't invest in companies that he can't control.
His claim now is that he doesn't know what's, what was going on
and that he would have stopped it had he read the fine print.
That is another thing that is made up for this
litigation.So what we've walked through just
now is overwhelming evidence from twenty seventeen and twenty eighteen that Mr.
Musk knew and supported, knew about and supported an OpenAI for-profit.
And there's nothing but Mr. Musk's own testimony to support the idea that there
were implied restrictions attached to his donations on what OpenAI could do with
those donations with the structure once Mr. Musk
left the board.
Against all this, the only things that Mr. Musk can point to
are a handful of documents referencing enthusiasm for the nonprofit structure
and a desire to try fundraising within the nonprofit.
Contrary to what Mr. Mollo tried to tell you,
none of these show any sort of commitment or, or promise.
This is Sam Altman, I remain enthusiastic about the nonprofit structure. That is not
a promise. Your common sense tells you that. But you don't have to rely only on
your common sense because Sam Altman said it.
Siobhan Zillis said it.
I would not view that as a promise.
And
it was true.
Sam Altman was enthusiastic about the nonprofit structure when he wrote that.
He thought maybe they could raise the needed funds within the nonprofit
structure at that point if they really made a big push.
But it didn't work out. You heard that from Greg Brockman.
Let's look at, um, the email now from Siobhan Zillis around the same, same day.
This is after the for-profit negotiations, right, right after that honest thoughts,
um, email exchange.
She writes that Mr. Brockman and Dr. Sutskever were good with continuing with
the nonprofit.
They would like to continue with the nonprofit structure.
Here again, that is not a commitment. That is just a statement of what they'd like
to do at that point.
And in fact, every witness, again, including Ms. Zillis, told you that
Mr. Brockman
and Dr. Sutskever affirmatively refused to commit,
right?
You heard from Mr. Brockman that Mr. Musk requested very specific conditions to
resume his funding of the nonprofit after these email exchanges.
Mr. Musk's side has tried to make it seem like the requested commitment was, was
really simple,
right? This binary choice between either do something on your own or continue with
OpenAI as a nonprofit, but the discussions continued from here.
Mr. Musk required his three conditions,
and he relayed those conditions to Ms. Zillis and Mr. Teller in late September,
about a week after the email we were just looking at.
The first was granting Mr. Musk two more board seats on the nonprofit board.
Second was requiring Mr. Brockman and Dr. Sutskever to sign a non-solicit,
which is an agreement not to recruit out of OpenAI if they were to leave.
And the third was requiring Mr. Brockman and Dr. Sutskever
to commit to staying at OpenAI for two years.
Now, Mr. Brockman told you he thought, he thought carefully about those conditions.
That's the thought process that you saw in those journal entries that Musk's team
cherry-picked and, and showed to you and to him.
He and Dr. Sutskever worried that accepting Mr. Musk's terms would tie them
to the nonprofit without the resources to achieve its mission. Because Mr. Musk
wasn't,
wasn't just-- he wasn't gonna contribute tons more, he's just gonna resume his
quarterly funding of five million dollars if they accepted those conditions.
And you heard they even considered firing Mr. Musk from the board because the only
for-profit structure that he would conceive of was one where he had
unilateral control.
And Mr. Mollo,
you saw, tried to, to make it seem like that was all made up by Greg Brockman on
the stand.
You saw
on redirect
that Mr. Brockman was writing about the pl-- the thought of firing Elon
the day before the journal entry that Mr. Mollo was showing and in the same journal
entry that Mr. Mollo was showing. This was not something Mr. Brockman made up for
trial.
They didn't do it, though, right?
Mr. Brockman and Dr. Sutskever did not fire Elon Musk from the board. They
decided to try to make the nonprofit work
with Mr. Musk not accepting his conditions but trying to make it work.
They thought it would be morally bankrupt to get Musk to resume his quarterly
contributions to the nonprofit if they gave their word, and then they went off to
start a for-profit
if those resumed donations turned out to have been insufficient to advance the
mission.
They thought that would be morally bankrupt, so they didn't do it.
They didn't agree to the conditions. No one made a commitment to Mr. Musk.
And in the weeks before Mr. Musk's departure,
Mr. Brockman and Dr. Sutskever continued to share their uncertainty about OpenAI's
future.
Here's, here's a document that you saw, I think with Siobhan Zillis,
that proves Mr. Musk's claim that the founders committed to a nonprofit is just
false.
Mr. Mollo, I, I don't think, showed you this document.
It's Siobhan Zillis' notes from the time, reporting on what Greg, Ilya, and Altman
were telling her.They're still not sure whether, whether they'll stay a nonprofit
and focus on donations.
Figure out a structure for equity fundraise
or a private version of a token offering you guys had discussed before.
This is February eleventh, twenty eighteen.
There was just no commitment made to Mr. Musk about OpenAI's corporate structure.
There was never any specific purpose tied to his contributions, certainly not one
related to OpenAI keeping the nonprofit the main event.
It's all made up.
And let's look at the testimony.
None of the other founders backed up Musk's story.
Sam Altman, Greg Brockman, Ilya Sutskever.
None of the other witnesses.
Even, even
Mr. Musk's own witnesses
say they were unaware
of any promises made to him by OpenAI.
So that,
that is the first restriction. There was none.
You can't imply it. The record
defeats it.
Nor was there any condition or commitment
related to open sourcing.
And none of Mr. Musk's donations were given for the specific purpose of open
sourcing. You didn't see any, anything saying that.
And this we can cover a lot more briefly.
You heard
Dr. Sutskever say there was no promise made to Mr. Musk on open sourcing.
Did you ever make such a promise to Mr. Musk? Definitely not. I mean, on the
contrary, early, early on, I told him that OpenAI is not going to open source
everything.
Even OpenAI's,
um, documents, the, you know, all, all the documents from the time,
the general certificate of incorporation, the original one from twenty fifteen,
says only that op-- the OpenAI nonprofit will open source its technology when
applicable.
And it was clear from the outset, we, we saw this email from January of twenty
sixteen,
that the open did not mean open sourcing. This is Ilya Sutskever writing to Elon
Musk and his other co-founders.
It didn't mean open sourcing.
The open in OpenAI means that everyone should benefit from the fruits of AI after
it's built,
but it's totally okay to not share the science.
Elon Musk's response, "Yep."
There's also
Greg Brockman's email from twenty sixteen, just a few months later,
to Elon Musk.
I plan to say that I can't see why we would do that.
Our mission, which means criticize Google for not open sourcing.
Our mission is to maximally benefit the world,
and we don't have a problem with people keeping things proprietary. It's fine to
make money off this stuff, and we may even generate revenue ourselves one day.
Musk's response, "Whoa, that's really interesting. Who called from Google?"
And you heard the, the Dota technology that powered that big win in August of
twenty seventeen. That wasn't open sourced. Mr. Musk was still at the company
at the time. He didn't complain about it.
And Mr. Brockman told you the, the, the reasoning for not open sourcing that
wasn't about safety,
that particular,
um,
uh, decision.
It was about strategic reasons. So OpenAI's technological progress didn't
accelerate the progress of competitors.
In early twenty twenty, OpenAI amended its certificate of incorporation to remove
the reference to open sourcing altogether. It's a public document.
A few months later, it released a blog post explaining why it was sharing its
technology through an API instead of through open sourcing.
Another public document from twenty twenty.
There was never any commitment to open source of any kind made to Mr.
Musk,
and none of Mr. Musk's contributions to OpenAI were earmarked for the specific
purpose of open sourcing. There is zero evidence of that.
Now,
because his donations were not made for any specific charitable purpose,
Musk has not proved that he had a charitable trust.
Hasn't proved he ever had one. He hasn't come close to proving that.
But even if he could prove it,
prove that he had a trust at some point,
his claim still fails, and that's because his money had already been spent by the
time of the supposed wrongdoing. So any charitable trust had expired.
And
as you can see,
what we were just actually-- go back to the slide for a moment. This is just
the judge's jury instructions. If a trust is created and subsequently the whole of
the trust property ceases to exist, the trust is terminated.
Musk needed to have shown that the trust property was still there in twenty
twenty-three.
He didn't. Here are Musk's donations, and you saw this chart with, um, with Mr.
Dudney yesterday.
The quarterly contributions ended in June twenty seventeen,
and you heard from Mr. Dudney, the, the forensic accountant, that they were all
used up no later than November twenty seventeen.
Mr. Dudney explained after reviewing OpenAI's financial documents that the
money was spent on exactly what you'd expect:
compute,
employees, facilities.
It was spent in the pursuit of OpenAI's general mission.And the rent
contributions, meanwhile, were all used up by September 2020, when the last rent
payment was made.
Everything that Mr. Musk donated
was spent by September twenty, twenty- 2020.
That's three years before
2023.
There was no trust in existence by the time of this supposed breach.
Now,
I, I think I heard Mr. Mullow say he, he,
he's
suggesting that
the money that Mr. Musk gave from 2017 to 2020 helped OpenAI develop technology that
formed the basis for,
you know, for its,
its IP later on. There was some suggestion of that.
But that theory does not work.
Mr. Musk
bears the burden of proving that money or property that he donated was still in a
trust at OpenAI as of 2023, and he did not do that.
Suggestions are not enough.
The money he gave was spent,
and he offered no evidence,
none,
showing that that money became property of some kind that lives on today.
If ever there was a charitable trust, it ended in September 2020,
and Musk doesn't argue that any act occurring before that or after that date,
before that date, sorry, violated any right that was owed to him, so he has no
claim.
At this point, ladies and gentlemen, I am going to invite Mr. Savitt to come and
address you on the remaining issues. It's been a pleasure to address you. Thank you.
Well, at this point,
we are gonna take a recess so you can have lunch.
Oh, great.
Um, so we will, um, jury's lunch is here, and we'll stand in recess for about 30
minutes.
-Okay. -Peace, right, for the jury.
Okay,
Mr. Savitt,
what's your anticipation?
Of
-what, Judge? -In terms of time.
I, I-- it's fine, I just wanna know,
Colin.
Your Honor, I'm estimating about forty minutes or so, forty-five at the most.
Okay.
Um,
so if those estimates hold through, then
we will, after the lunch break, I will do both of you in that set. Okay. All right,
we'll stand in recess for about thirty minutes.
Your Honor, there is one issue we wanted to raise arising out of Ms. Eddy's
presentation.
Uh, we can do it now, or we can do it at the end of the recess.
No, that's okay. Um, Ms. Eddy,
you've got an issue from plaintiffs.
We're back on the record. The record will reflect that the jury is not here.
Sure.
Your Honor, um,
a, a couple different times, and in particular at page one eleven, line six to
twenty of the real time, Ms. Eddy
argued in substance that, uh,
M-Musk, any condition that Musk imposed to follow the general mission of the
organization couldn't be sufficient because he had to show some specific trust
purpose above and beyond the organization's mission,
and our concern is that that's contrary, the mission's, uh, the organization's
general mission.
And our concern is that that's contrary to what this court ruled in your summary
judgment order. In particular, I'm looking at, uh, docket three ninety,
page seventeen, where Your Honor said,
"The argument that a settlor must attach specific additional conditions to a trust
where a charitable donation already aligns with the mission of an organization is
not supported by case law." And so we think this has given, uh, the jury a
misunderstanding or a misleading impression of Your Honor's instructions
and wanted to request a supplemental instruction just to clarify the point Your
Honor made in the summary judgment ruling.
I
-agree with that. Overruled. -Thank you,
Your
-Honor. -Excuse me, everyone. We'll need to clear
the courtroom. Thank you.
Recording stopped.
Recording in progress.
Court
is back in session.
Okay, let's, uh, call the jury in.
You were the sole representative, Mr. Cry.
-Are you using a briefcase as well? -[clears throat]
I, I, I asked whether you were using the briefcase as
well.Okay,
you may all be seated. The record will reflect that the jury is back, and we're
good to go. Great. Mr. Savitt.
-Thank you, Your Honor. -You may proceed.
Thank you.
Members of the jury, hello again.
Um,
it's really good to see you. It's, um, really good to have the chance to visit
with you
again. It's been a couple of weeks, maybe even three, since we had the chance to
speak,
uh, directly, and grateful for that opportunity.
Grateful also for your time and attention,
which we know is precious,
and
you've
been very generous with it over the past few weeks.
We're gonna talk a little bit more about the evidence as we see it in this case,
and, um, well, thank you for, for the indulgence there.
Um,
I wanna pick up where, where my colleague, Ms., Ms. Eddy left off. She walked you
through the mountain of evidence that shows that Musk's general contributions,
lacking any specific charitable purpose, cannot possibly have created a charitable
trust. And we think under the law and under the evidence, that proposition, that
idea isn't capable really of being disputed. Ms. Eddy has also shown you, um,
the evidence, likewise overwhelming, that Musk's donations were spent exactly as
they were requested to have been spent, exactly consistent with OpenAI's general
charitable purpose.
There is one more thread on the matter of charitable trust, however, that I wanted
to speak with you before moving on to a few other, few other subjects.
Um,
e-even if you imagine, contrary to fact, that a charitable trust was created, Musk
would still have to show that the terms of that trust were breached for him to have
made out a claim. The question, members of the jury, boils down to this: Has the
OpenAI nonprofit respected its general founding principles? And with the evidence
before you,
you can see we believe that the answer is, has to be yes. I, I wanna emphasize that
in some sense, this question doesn't, doesn't really matter legally. As we've
seen, Mr. Musk only can have a claim if specific commitments were made to him
about the uses of his donations, showing that they were different than OpenAI's
general commitments, which we submit, uh, they weren't for the reasons that Ms. Eddy
has discussed with you.
But counsel for Mr. Musk, Mr. Mulloway, spent a lot of time speaking about this
question, immaterial though we think it is, and I didn't wanna leave it,
didn't wanna leave it unanswered, and we think the answer is easy.
Uh, OpenAI has respected its charitable principles from
day one to today,
and as we think the evidence at trial's shown. The OpenAI nonprofit, which today
is called the OpenAI Foundation, is still a 501(c)(3)
nonprofit organization, and that's the relevant provision of the, the IRS code,
the tax code that identifies it.
OpenAI Foundation
has always been a 501(c)(3) o-organization. It remains that, and it's
governed by the same nonprofit certificate,
uh,
as it was in 2020, which was not meaningfully distinguishable from the
certificate as it was incorporated in 2015, all of which has been public for the
world to see for many, many years. Uh, no one in this trial is disputing that. I
don't think it's really subject to dispute either that the foundation has some two
hundred billion dollars in assets as we, as we speak today. You heard that from Mr.
Taylor, the foundation's chairman. You heard it from Mr. Altman, and there's no
contrary evidence in the records. It's not subject to dispute. The OpenAI Foundation
is today one of the largest nonprofits in history. It is funding initiatives aimed
at fostering AI resilience, which is making sure that the economy is resilient
in light of the coming of artificial intelligence, and focusing on curing
diseases and trying to make
life and work better for healthcare professionals in the healthcare industry.
No private person has received any part of the nonprofit's net revenues.
None of the foundation's assets have been transferred to anyone for anything other
than fair value,
ever.
I wanna,
I wanna talk a l-- for a moment about, uh, the, the document that's now on your
screen. It's, it's a reports, report of a, an accounting firm, a financial
evaluation firm called Hemming Morse. As you heard, the nonprofit transferred some
of its assets to OpenAI,
the for-profit branch, back in 2019,
which is seven years ago. It's undisputed, and by that I mean no one's said anything
on the other side of the question, that that transfer was for fair value, as
determined by an independent third-party valuation report at this time, and that's
the Hemming Morse report that we've introduced into evidence and is before you
now. And the evidence, um, from the witnesses bears all this out. Ms.
McCauley, who, as you saw, had some harsh things to say about some of my clients,
was asked whether the--
and she, she was on the board at the time, was asked whether it was fair value.
"That's correct," she said. You even heard, um, fr-from plaintiff's own
witnesses exactly to that effect, and not only that, even Mr. Musk's expert,
Mr. Schizer, can't complain about the valuation. No basis to question its
validity. No one-Is disputing. No one is claiming that the transfer of assets in
two thousand nineteen somehow violated OpenAI's certificate of incorporation.
And in fact, the evidence is clear that Altman, Brockman, Sutskever, and their
colleagues have turned that sixty million dollar contribution of assets into a two
hundred billion dollar
fund of charitable assets. That's sixty million into two hundred billion. Before
speaking with you, I tried to do the math to figure out the percentage, and it's
actually hard to do. And with the aid of some artificial intelligence, I can report
to you that this reflects an increase in value of three hundred and thirty-three
thousand percent.
Three hundred and thirty-three thousand percent increase. Apparently not enough
for Mr. Schizer.
And that just talks about the increase in valuation, the increase in charitable
funds that are available for initiatives in health resilience and otherwise to make
artificial intelligence safe and better, to put it to work for humanitarian
purposes, both through grants and, and initiatives. That's just one part of it,
and that's a big part of it, but it's not the whole part of it, because there's also
a matter of governance.
The nonprofit
always has and still does control the OpenAI for-profit. That control is not
required. It's not as though there's anything in the law of charitable trust or
its custom and practice, as you've heard about, that requires that.
Certainly wasn't a duty owed to Elon Musk, but it's true nonetheless, members of the
jury. It's a matter of simple corporate law, as Professor Coates explained to you
yesterday afternoon.
Now, Musk complains that
OpenAI's controlled nonprof-- for-profit, uh, for-profit organization that's subject
to nonprofit control is too big.
Um, Professor Hemel, who studies nonprofit organizations, explained that many
charities affiliated with non-- with for, with for-profit organizations
have for-profit organizations that are very, very large. This is not, at a
conceptual level, an anomaly. It's not something that's unknown or odd.
Um,
M-M-Microsoft partnerships are also consistent common practice amongst large
United States charities. Nonprofits can and do use for-profit affiliations to
advance their missions. This is the custom and practice of nonprofit law. They can
structure partnerships with commercial partners. This is nonprofit law. The
question here is whether the arrangement advances the nonprofit's mission. That's
the question, and the answer is, of course, it does.
When you think through the complaint that the nonprofit is too small and the
for-profit is too big, it,
it doesn't really make a lot of sense. If OpenAI's for-profit were less valuable,
all that would mean is less for the foundation, that the foundation would have
fewer charitable resources.
And if the governance rights weren't as strong, that would mean there was less
influence over the shape of AGI.
None of that is consistent with the charitable mission.
All of it, all of it is entirely in line with the charitable mission. And yet, what
Mr. Musk seems to want to achieve is a scenario where the foundation has fewer
assets and is
exercising less control over leading-edge artificial intelligence. It makes no sense
from a mission perspective. Importantly, moreover, you've heard that the
nonprofit's current structure, as Mr. Taylor testified, was shaped in
consultation with the attorneys general of Delaware and California, who were
actively involved in discussions about how to structure the organization in twenty
twenty-five.
That's just because OpenAI is a nonprofit, and no other AI company can say that. No
other AI company is organized with a nonprofit in control. No other AI company
answers to government regulators like the attorneys general, certainly not Mr.
Musk's xAI.
And m-m-- Counsel Mr. Mullow touts
Mr. Musk's concern with the social impact of artificial intelligence.
Um,
the whole point of the resilience project, which will now be the beneficiary of
billions of dollars of action and resources, is precisely to mitigate the
economic effects, the adverse economic effects of artificial intelligence, and to
ensure positive ef-- impacts in artificial intelligence. This isn't gonna
be easy, and it's not gonna be without its challenges, but someone has to devote the
resources to try and get it right. That's what OpenAI is doing, not xAI.
Mr. Musk looks at all this nevertheless and shouts,
"They stole a charity."
That's sort of all he does, is shout, "They stole a charity," but that has
things exactly backwards, members of the jury. For years, the main value
the nonprofit had was in its residual interest
in the old capped profit structure. You heard Mr. Schizer complain about how
uncertain that interest was. He said it made things hard for the nonprofit. It
wasn't be able-- gonna be able to get its, its hands on resources quickly, and, and
that's true. And,
a-and it's, it's also true that for several years, the nonprofit's main job
was overseeing the for-profit. That remains an important part of the
nonfunction-- nonprofit function. It didn't have its resources readily
available to conduct its own initiatives.
This is the slide that, um, Professor Schizer wor-- look, look, looked through
with you a little more than a week ago. Um, but Professor Coates explained the
actual economics, 'cause this isn't the actual economics. The actua-actual
economics are this.
Professor Schizer imagined an exceedingly s-small pie-- piece of this very large
pie.
In fact, the actual share is enormous.$200 billion plus enormous.
That is not stealing from a charity. That is creating untold v-value for a charity.
That's creating a three hundred and thirty-three thousand
times rate of return for a charity.
Now, since the October 2025 recapitalization, about which you've heard
a bit, the foundation, the nonprofit, has been,
um,
with the good fortune of owning a very big chunk of the PBC, and it finally has
access to the resources it needs to fund the initiatives that we've talked about. I
just wanna say it again, because the sum available to this organization is
enormous, $200 billion plus. And I know that in questions to witnesses and the
argument with you this morning, Mr. Mollo has suggested that the foundation only
started hiring people recently, that it only began to do the work that it's doing
because of this lawsuit. There is zero truth to that. And putting aside
what's been said by a lawyer, which as the judge has explained to you isn't
evidence, there is no evidence of that. There's only one explanation in the
evidence, and it's the accurate one, which is that the recapitalization transaction,
the restructuring,
consummated in October 2025, unlocked the value that the OpenAI Foundation could put
to work and that it immediately set about to putting those resources to work. It is
true that there has been a rapid acceleration in the foundation's work.
The only reason for that is that it now has the resources to do it. The evidence
on that question, members of the jury, is one way. There are no-- there's nothing
from which one can draw an alternative inference.
In no way, members of the jury, did Greg Brockman or Sam Altman or Ilya Sutskever
or anyone else who helped build the value that now resides in the for-profit steal
anything from the nonprofit. Against very tall odds,
their work and sweat and innovation created something, um, incredibly
valuable, startlingly valuable, admittedly startlingly valuable for the nonprofit.
That's where the nonprofit's entire endowment comes from.
And
on, on the subject further of, of irrelevant things that Mr. Musk has sought
to make this case about, let me briefly address the removal of Sam Altman and Greg
Brockman from OpenAI's board in November 2023. For sure,
um, members of the jury, this was a difficult time in OpenAI's history.
Uh, for sure, several members of the board were unhappy with Sam Altman's
management. Uh, some for sure accused him of being less than candid,
principally in the sense of having said two different people two different things
on the same topic.
But
let's keep an eye on the ball of how things shook out.
Over ninety percent of OpenAI's employees, including plaintiff's own witness, Rosie
Campbell, including Dr. Sutskever, signed a petition to have Mr. Altman and Mr.
Brockman reinstated. These are the people who worked most closely with these
executives day in and day out over the course of years and years. They wanted
them back, both of them. Dr. Sutskever, one of the members of the old OpenAI
board, signed that petition, and he voted to have Altman and Brockman return.
You heard Dr. Sutskever testify that the old board had acted rashly, without
adequate inquiry, without a succession plan in place, without adequate
investigation on the strength of poor legal advice, so as to have created chaos
at the company.
That was from Dr. Sutskever.
Ms. McCauley and Ms. Toner, two of the other directors who'd done the removals,
they agreed that Alt-- bringing Altman back was critical for the future of the
company. Adam, Adam D'Angelo, the fourth vote, well, he stayed on the board. He's
still on the board. He voted to reinstate Mr. Altman.
He voted to reinstate him as both a board member and a CEO.
The new board members, Mr. Taylor, the chair from whom you've heard, and Larry
Summers, they joined the board. They were both contacted first by the outgoing
board, not by Altman. Summers was put on the board over Microsoft's objection.
And importantly, as the outgoing board demanded,
a thorough independent review was conducted into just what happened in
November 2023, and after that review was completed, Mr. Altman was reinstated to
the board of directors.
Sam Altman and Greg Brockman,
and OpenAI in general,
have,
have had to sort out what happened in something that was
a, a big blowup, a lot of chaos,
and they had to sort out what to do to try to make things better going forward.
In place now is a more robust, more mature governance structure that reflects the
growth of the company.
Brockman and Altman and the management team and this board, which as you saw, is
populated with exceedingly accomplished individuals from all walks of life
relevant to this project,
um, have tried, and they're trying, and we think the evidence is they're succeeding.
Now,
you may be asking yourself,
w-what does all of this have to do with Mr. Musk's claim that in 2015 and 2017, he
was made some promise that was broken? This all happened in 2023, and the answer
to that question is nothing. Um,
M-Musk's last rent donation was made in 2020, and we'll talk a bit about that.
That was three years before all of this. His last quarterly donation was in
the middle of 2017, as you now know. It was more than six years before all of
this.
The alleged promises that were made were in the remote past.
Mr. Musk is raising this issue to divert your attention from the facts that matter
for his claim.But since Mr. Musk has made so much of November 2020, if you
ask yourself this, if Mr. Altman wasn't committed to OpenAI and its mission,
which is what Mr. Musk claims,
why did he come back to OpenAI after being fired?
He didn't have to do that. You heard that he had a job offer at Microsoft. You know,
'cause you heard, that he could have gone there and made an enormous amount of
money. He could have gone there with most of his team. He could have pursued AI
there.
He wouldn't have had to think about the mission again.
But he came back to OpenAI.
This is the proof of it. Here was a guy who had a choice, a clear field to walk
away, to get into an organization that was gonna pay him enormously. He'd
run the show, and he would not be constrained by the mission. He said no. He
went back to OpenAI because he cared about the team, and he cared about the
mission. He re-upped in circumstances where he didn't have any obligation 'cause
he'd just been kicked out. He'd just been kicked out on his ear.
Mr. Musk argues,
tells you, members of the jury, that these events are relevant to his claim that
OpenAI
promised him to put safety first, and the events of November 2023 aren't consistent
with that, but none of that is true.
OpenAI is and has been committed to safety. That's not some special obligation
that's owed to Elon Musk. It's fundamental to the mission of the
organization. And the events of November 2023, they were not about safety, members
of the jury. Uh, the board's own statements from the time say it in black
and white. Let's have a look at the statement that was issued. This decision,
the decision to, to remove Altman and Brockman,
is not about product safety,
not about security,
not about the pace of development or OpenAI's finances. It wasn't about those
things. It was about personality conflicts and miscommunications that I don't wanna
minimize them. It was a, it was a blowup,
needed to be taken care of so it won't happen again, but it wasn't about safety,
and if Mr. Musk's telling you the tr-- that, then he's not telling you the truth.
And as for h- where things stand today, you heard from Zico Kolter, the chair of
Carnegie Mellon's Machine Learning Department.
He's an OpenAI Foundation director. He's one of the preeminent experts in AI safety
in the world, uh, and he testified, as you heard, that the organization has a
robust nonprofit-only
procedure in place for ensuring the rigorous review from a safety standpoint
of everything OpenAI does.
So
Musk's breach of charitable trust claim fails for multiple independent reasons. He
has not proven that he created a trust. Ms. Eddy demonstrated that. He has not
proven that he created a trust. Any trust must have ended in September of 2020 when
the last dime of Mr. Musk's donations were spent,
and there is no evidence that his donations were misused. Indeed,
and it's an obvious fact, it's not in dispute, but it needs to be said over and
over again because of the rhetoric from the other side, OpenAI remains a charity.
OpenAI remains governed by a charity. The charity is now bigger and stronger and
more empowered from a governance perspective than ever.
I'd wanted members of the jury now to turn from the charitable trust claim, and I
think we talked about all the things that are relevant there and discuss
the second claim in the case, unjust enrichment. Um,
and I think,
as Mr. Mollo said, on this much we can agree, I think we can move a little bit
faster through this 'cause the facts underlying this are mostly the same. So
we'll talk a bit about some of the same ones, but we can, we can move more
quickly.
I did wanna say a word or two at the outset about what restitution is.
The idea of restitution...
The idea of restitution is that the plaintiff can return, demand the return of
something that he or she gave.
Um,
and so it's worth pausing for a moment on the narrative that Mr. Mollo has advanced
as the basis for the claim. The idea
is that OpenAI is what it is because of Elon Musk, that Elon founded it, that
Elon's ideas and his brilliance and his connections, the Midas touch of Elon Musk
is what made OpenAI what it is today. That's the thesis.
In his claims here, Mr. Musk wants to claim credit for the whole thing,
for all that OpenAI is. Elon, Elon, Elon.
It was all me.
Mr. Musk wants all that credit, but he hasn't earned all that credit.
For sure, he made some contributions early on,
um,
but those contributions, remember, they were all charitable donations.
Mr. Musk helped himself to millions in tax deductions for those donations.
And
charitable donations are not seed money,
uh, as Mr. Musk started claiming in October 2022.
You don't see any of the other donors, and we'll talk about them for a second, who
gave far more in the aggregate than Mr. Musk, raising their hand for a seed money
payout.
Um, it's an entire-- It's, it's really quite a cynical position if you think
about it. Mr. Musk is comparing himself here to venture capital fund, f- uh,
funders who make an investment and have the
opportunity to, to reap a reward. But this was supposed to be a donation. He took a
tax deduction, and the whole theory of his claim is that there's a charitable
object.
The whole theory of his... Thank you, Your Honor. The whole theory of his claim is
that this is a charity, and yet he wants, when it suits him, to talk about himself
as a seed investor.
And as you heard from witness after witness after witness, Mr. Musk abandoned
OpenAI for dead in 2018. Here it is from Mr. Musk himself. It's DX853, and of
course, this will be one of the documentsThat's with you as you consider
our claim.
My probability assessment of OpenAI being relevant to DeepMind Google withou-without
a dramatic change in execution and resources is zero percent.
Wanting to make sure he's mathematically precise, he adds, "It's not one percent,
it's zero percent."
He thought that's what OpenAI's chances of success were, were. But, but, but then
after Mr. Musk left,
slamming his door on the way out,
seeking to poach employees on the way out,
seeking to build his own A-AGI operation at Tesla on the way out, after he slammed
the door behind him, an unexpected thing happened. The organization began to
flourish.
Milestone upon technical milestone occurred after February two thousand
eighteen, after Mr. Musk stormed out the door.
Only after February two thousand eighteen did the technology advance such that the
ant became the cat. And you will recall Dr. Sutskever giving the analogy of the
growth of this industry in the manner that's depicted on this screen.
And as Dr. Sutskever also testified,
the funds that OpenAI has raised were all necessary to take advantage of this
technological progression.
Um, I wanna talk a little bit about th-this slide with, with, with you members
of the jury. Um, for the thirty-eight million dollars that Elon Musk donated way
back in the day, others contributed nearly one hundred million dollars. And,
and remember, this is... We talked about this when we first met several weeks ago.
This is one of those dogs that doesn't bark. Just like you'd think there'd be a
document memorializing the agreement that Mr. Musk said he had, you'd think that if
this was really a violation of the m-- of the mission of this organization the way
it's been run, you'd think one of these donors, a lot of sophisticated people gave
a lot of money, would have raised their hands.
But they didn't. Not a single one of these other donors has ever complained that
OpenAI has failed to respect its mission. Not a single one of these other donors
has brought a lawsuit against M-- against OpenAI. Only Mr. Musk has, only the
competitor. That's the only one who's brought it. That's the only one of these
donors who's perceived
this unwritten, unspoken promise that was allegedly made.
And then investors put in a hundred and fifty billion dollars in investment
capital, not donations now,
in investment capital,
all needed to power the mission. And s-so members of the jury have this in view.
Those investors, they still haven't had a cent of return from that. So keep that in
mind. None of those investments have been paid out to, to-- None of those
investments have been paid out by OpenAI 'cause it's not profitable. Now,
Mr. Mollo, in his conversation with, with you this morning, conjured some imaginary
world in which OpenAI could have developed without the Microsoft investment, some
imaginary w-world in which
s-s-- donations equivalent to what
Microsoft gave could have been,
could have been solicited and brought in and
m-meet the do-- meet the demands of the project.
A couple of things on this. You heard Mr. Altman talk about beating the bushes, and
he raised fifty million dollars in two thousand eighteen. That's a lot of money.
It's a lot of work, but it's nowhere near what was required.
Remember also that there was supposed to be a big anchor donor,
Mr. Musk, a billion dollars. Well, that didn't happen.
And there is literally no evidence, literally no evidence, that
anything like the amount necessary to sustain this organization could have been
raised by donations. The best
Mr. Musk's team could come up with is an organization that raises a great deal of
money a year, said to be over four billion.
But you heard from the experts yesterday, that's actually a hundred million dollars
a year of cash and leftovers from soup, from restaurants and grocery stores. It's
all in-kind contributions. There is no historical precedent, no universe in which
the capital resources of this organization could have been funded from
private donations. So yeah, yeah, for sure, Mr. Musk came by every week or so,
he gave some advice, and then he quit two years in.
A-And after that,
Mr. Musk jumped ship,
and after-- and he tried to take some with him,
but a lot of people stayed, hundreds stayed, and then thousands were there. And
there are researchers and engineers who have poured their life into this
organization, and it is they, members of the jury, not Elon Musk, who have created
something enormously and surprisingly valuable. Mr. Musk is not the one who
built OpenAI into what it is today. OpenAI is what it is today despite his
predictions of certain doom, despite his po-poaching of key employees, despite his
attempts to absorb it into his own organization, his own for-profit car
company, and despite his public efforts to tear it down. And as for the Midas touch,
not really, not here.
Consider what happened when Musk tried to build AGI at Tesla.
It was a total fail, as my daughter would say.
Mr. Musk may have the Midas touch in some areas, but not in AI. This requires a
touch that he doesn't have. This is not a bulldozer business.
To succeed in AI, as it turns out,
all Mr. Musk can do is come to court.
So that's one thing. OpenAI is not Mr. Musk's creature, far from it, but even if
you accept that narrativeIt still doesn't give him a legal claim, members of the
jury. So let's get detailed about what Mr. Musk has to do to prove his claim.
For unjust enrichment, Mr. Musk has named four defendants:
the nonprofit itself,
the PBC,
Mr. Altman,
and Mr. Brockman.
And to carry his burden on that claim against any one of these defendants,
Musk has to show two things for each of them. He has to show that the defendant
received a benefit,
and he has to secondly show that the defendant unjustly retained the benefit at
Mr. Musk's expense.
Let's, let's quickly, um,
talk about how this analysis plays out against the backdrop of the evidence,
against each of these,
uh, each of these defendants, 'cause members of the jury, that's what you're
gonna have to do when you go and sit together and, and s- figure out how the
pieces fit together. Um, starting with the OpenAI Foundation,
I think
w- we, we can agree that the OpenAI Foundation, previously OpenAI Inc.,
received a benefit from Mr. Musk.
Um, back in twenty sixteen to twenty twenty, it got-- it received donations
from him. Um,
so,
uh, but, but, but the problem with that is, is he, he, he has to show that those
benefits were unjustly retained at his expense. It's not enough to say, "I gave
money." He has to show that there were benefits that were unjustly retained and
at his expense, 'cause otherwise anyone who gave money to a charity could bring a
lawsuit and tell it what to do, and you know that's not the law. And there are two
pieces to this, Your Honor, uh, members of the jury. Um, one is unjust enrichment,
and the other is at Musk's expense. I wanna break those pieces down to, to try
and roadmap this for you. Let me start with the second piece,
um, which is a slightly technical piece. Um, I'll, I'll warn you in advance, but
it's important.
Um, was the alleged unjust reten- retention at Musk's expense?
All of the evidence in this case shows that Musk did not give money to OpenAI
directly. He did not give it to it directly.
M- Mr. Musk donated money to one organization, and that organization then
paid the money out through intermediaries.
The cash flow
is set out on this slide. Mr. Musk gave money to these donor-advised funds and the
sponsor organization, and it gave the money to OpenAI.
These were tax-engineered two-step transactions
-w- w- where- -Objection, Your Honor
... organized.
Um, related to the summary judgment.
Your Honor, we fully understand the summary judgment ruling. We think it's
important to have the jury
ruling this issue as a matter of fact.
Well, they can understand it. I, I, I thought that the objection was gonna be
with respect to tax-engineered. I mean, these are legitimate transactions.
I don't exactly know what you mean by that,
um.
M- my, my point, members of the jury, is that, um,
Musk lost ownership of these transactions at the first step.
It wasn't his money anymore. He gave it away,
and then these organizations gave it to OpenAI.
And so if the nonprofit unjustly retained these funds, it wasn't at Musk's expense.
It was at the expense of third parties that actually made the payment,
and that's important. But even if that weren't true,
um, there's no basis here to find that the nonprofit's retention of Mr. Musk's
contributions was unjust.
As Judge Gonzales Rogers has instructed you, and I'm quoting now, "In determining
whether a benefit was unjustly retained, you may consider whether plaintiff showed
that a defendant knew or had reason to know that the benefit was to be used for
charitable purposes and then was not." And there is no such misuse here, members of
the jury. All of the funds that Mr. Musk donated were spent by September twenty
twenty. This is the testimony at the end of trial that you heard from Mr. Dudney,
and he's a forensic accountant, and it turns out forensic accounting can be very
important in a case like this because he showed where'd the money go. He followed
the money, and what he found is that all the money that Mr. Musk gave was spent. It
was spent by twenty twenty. There was nothing left after that. And there's no
evidence that any of those dollars were used on anything other than OpenAI's
nonprofit activities. You also heard that from Mr. Dudney, and you heard the same
thing from Mr. Birchall, who was asked, "Do you have any reason to believe that
donations Mr. Musk made
were not used for exactly that purpose?
Correct."
This is a guy who works for Mr. Musk, handles his books, and his answer was,
"Correct." He knew that OpenAI spent every single dollar that Musk gave exactly for
the purpose that it was given. The foundation didn't retain the money. It
spent the money precisely as it was supposed to be spent, for general
charitable purposes, and none of Mr. Musk's money is left. There was no unjust
retention, members of the jury, and therefore, there can't be any restitution.
So that's the OpenAI, um, foundation. Let's talk about the other defendants from
an unjust enrichment perspective, members of the jury. How, how do these,
how do these elements apply to Mr. Altman and Mr. Brockman? Let me, um, let, let me
start with Mr. Brockman. Um,
for, for this claim, the
i- idea is that
the donations Mr. Musk made
twenty sixteen to twenty twenty created an unjust rich-- uh, an unjust benefit to,
to Greg Brockman, and it fails largely for the same reason that I was just
discussing. There was non- nothing unjustly retained at Mr. Musk's expense as
the law requires.
Um,
Mr. Mollo points to Greg Brockman's equity stake in, in OpenAIIn the OpenAI PVC, and
I know you know that 'cause he said it a whole, whole lot. But Mr. Brockman, this
is important, he didn't receive the equity from Mr. Musk.
Mr. Musk had nothing to do with the giving of that equity. Mr. Musk wasn't
associated with OpenAI when the equity was granted. He had already quit.
Brockman was, received his equity stake from the OpenAI nonprofit after Mr. Musk
was gone,
and the value of that equity was built without any benefit conferred by Musk,
without any input from him,
during years when he was claiming loudly that OpenAI was doomed to fail.
And what's more, there's nothing from a legal perspective unjust about Brockman's
having this equity. Now, we agree,
and I don't-- I wouldn't ever suggest to the contrary, 'cause you look at these
numbers and they're, wow, they're big numbers. Um,
if, if OpenAI continues on the path that it's on,
the equity is worth,
on paper at least, just a crazy amount of money. Crazy amount of money, for sure.
Um, but the reason it's crazy is because of the value that's been created by the
business that all of these people
and the investors and the other employees,
uh,
created in the for-profit that's controlled by the not-for-profit, and
that's how equity works. I know you know this. You invest money or you invest your
sweat equity, your time and your talent, and you see what value you can build.
If it's not much, you don't get anything.
If it's a lot, you get a slice of a lot,
and that's what happened to Greg Brockman. And this raises an important point I
think worth pausing on for a second. In two thousand and nineteen, when Brockman
received his equity, the, the testimony on this and the evidence is clear,
um, no one had any idea that the equity would be worth anything,
let alone billions of dollars. No one knew. You, you-- we look at things from
the perspective in today and say, "Well, yeah,"
but that's not the relevant question. What did it look like in two thousand and
nineteen? I'll tell you what it looked like in two thousand and nineteen. The
thing had no money. It couldn't raise enough money to keep its business off the
ground.
Elon Musk was going around telling everyone hither, thither, and yon that the
thing was worth zero, that it had no chance of succe-- That's what it looked
like.
That's what it looked like.
So Brockman got, um,
Brockman got
a, a slice of the equity.
Who knew what it would be worth? Now, it turns out this has turned out to be, to be
incredibly, astonishingly valuable. But a-and with twenty/twenty hindsight we
know, but only with twenty/twenty hindsight we know, that this was the rare
organization that succeeded. Musk complains now about the value of that
stake.
That's cynical.
As you've seen,
the organization was premised on employees being paid startup-like compensation, and
Mr. Musk knows better than anyone that when a startup works, and most of them
don't,
the valuations become large. More often than not, they're not worth anything. Hang
on just one second on this slide, 'cause I wanted to stop for a second before
talking about that and just,
um,
o-observe that Mr. Mollo made an inflammatory analogical analogy to some
kind of a bank robbery when he was chatting with you this morning. I'm su-- I
expect you recall that. But what he left out is that
in this analogy, Sam Altman and Greg Brockman and everyone else at OpenAI put
all the money in the bank in the first place, because the money that counted here
were the ideas and the science and the sweat equity after the for-profit was
created,
after Mr. Musk was gone. And then they dedicated two hundred billion dollars of
what was created for charitable purposes, and a great deal of the additional funds
were paid out or reserved for the investors who--
Microsoft and other investors who made it all possible. Has anyone heard of a bank
robbery where the bank robbers invented the bank and put two hundred billion
dollars into it? That's not a bank robbery. This wasn't a bank robbery. It's
an extreme illogical and just inflammatory analogy.
And it's worth comparing, and now let me look at the slide that, that we were
gonna, we were gonna talk about. It's worth comparing with that in view
Brockman's position to what Elon Musk himself thought Greg should get way back
in twenty seventeen when they were negotiating shares.
Elon was going to give himself... Remember this. Elon was going to give himself
between fifty-one and sixty-two percent of the equity when he thought he could
control this organization. Here's the proposal that Elon reviewed and that we
examined with several witnesses in trial. I'm sure you recall it.
Elon's at fifty-five percent, Brockman is at seven point five percent.
And what's interesting is what Elon wanted to give him
was a lot more than what Brockman actually has now, which is only four percent, give
or take. And the point is, is that Brockman received no equity from Elon
Musk, none,
and he can't be called upon to restore it to Elon Musk. And even if the equity here
was something received from Musk and restorable to him, all of what we're
talking about shows that in, understood in context, this was not unjust.
The same goes for any value that Sam Altman has by virtue of his
association with the OpenAI for-profit. Um, M-Mr. Mollo,
um,
spent a lot of his time this morning attacking, um, Mr. Altman. He said that
Mr. Altman lied about having an equity stake in OpenAI. I don't think that's true
or fair or supported by the evidence.
Mr. Altman, I don't think this is disputed, does not have any direct equity
stake in OpenAI. He has never received an equity grant from OpenAI or its board.
Um, w- he does have-- He owns something that's akin to a mutual fund, and that
mutual fund has a position in OpenAI. He wasn't responsible for that investment.
You heard his testimony. He has no control over that. You heard-
Oh, thank you, Your Honor.
Um,
and, uh, the claim that th-there was a lie here is itself untrue.
Um, and Mr. Mollo has tried to argue that Sam Altman should pay restitution of
whatever value he's gained from transactions between OpenAI and companies
in which he has an interest.But here again, one, this isn't something that was
received from Mr. Musk. Mr. Musk was long gone, and it isn't unjust anyway, members
of the jury. Altman was recused
from every transaction that you heard about. There is no evidence on the other
side of this question. Brett Taylor, the chair of the board, testified to it.
There's nothing on the other side of it. Altman test-- nothing on the other side of
it. There's just a lawyer saying something, and that's not evidence. Um,
uh,
Mr. Mollo talked about Helion, and he forgot to mention that OpenAI has not paid
Helion a penny.
Um, and massively missing from the presentation here is what exactly is the
value? Mr. Mollo this morning said big dollars.
Well, that's not a legal claim. Um, no attempt has even been made to value this,
and there's no way it could be valued, and there's certainly no way it's unjust,
it's unjust enrichment. Every one of these transactions was approved by OpenAI's
independent directors, and Brett Taylor explained why these deals are good for
OpenAI, at least in the judgment of the people responsible for managing it, which
does not include Mr. Musk. There's no evidence at all to the contrary.
So that's what we, uh, have for unjust enrichment. The bottom line is that while
Mr. Musk conferred a benefit on the nonprofit way back in the day,
that benefit was not retained at any expense to Mr. Musk and was not misused in
-any event. The restitution claim- -Your Honor, I, I object again.
I'll deal with it later. Overruled at this juncture.
He has standing to sue, and that's what I dealt with.
-Proceed. -Thank you, Your Honor.
The last thing, uh, that I'd wanted to do now, members of the jury, is to address
the statute of limitations, excuse me, and other
defenses we have to Mr. Musk's claim. Mr. Mollo, uh, told you this morning that the
statute of limitations is a technicality.
Well, Judge Gonzales Rogers is going to tell you that you should address this
issue first,
um,
and that's because it's important.
And I say it's important because the statute of limitations exists for an
important reason. It protects defendants from opportunistic lawsuits. It protects
defendants from advantage-taking in court. As you've seen, if you wait around years
and years and years and years,
then file your lawsuit,
evidence gets lost. People forget what happened. You've seen a lot of that here,
particularly with Musk and his witnesses.
I don't recall. I don't remember. I don't recall. I don't remember. We went and
tried to count up the number of times that this was said. It was somewhere between a
hundred and fifty and two hundred times in this, in this, in this trial. I don't
remember. I forget. Can't recall.
Well, and nearly all of them were on the Musk side of the case, members of the
jury. That's why it's unfair to bring a claim too late,
because you can't put, you can't put the evidence in front of you
because it's too easy to say, "I don't remember."
Um, and there's more. The statute of limitations recognizes that if you have a
real claim, you bring it.
You bring it when you realize you have it. You don't wait around. If it's
substantial enough, if it's based in evidence, if it's real, you, you're, you
gotta get going and make your case. That's the idea.
If you think someone is doing something wrong, stop it. Take action. You don't let
it go on and on and then sue when it's convenient to you. That's what happened
here.
Here are the instructions, members of the jury, that you'll take back with you on
the statute of limitations. They tell you
that if you find Mr. Musk could have brought this lawsuit before August fifth,
twenty twenty-one, then for both of his claims, the burden is on him to prove that
he did not know of those facts and that he could not have discovered them with
reasonable diligence.
Applying those instructions, members of the jury, you should find in this lawsuit
that it comes much too late.
Uh, we've already reviewed much of the evidence that proves this. The things that
Mr. Musk is complaining about now,
um, as far as we can tell, given the changes in the account from plaintiff, are
that, one,
OpenAI built a substantial for-profit organization. Two, OpenAI doesn't open
source its latest models. And three, OpenAI has a close partnership with
Microsoft. Every single one of these things
was true years ago, um, well before August fifth, twenty twenty-one,
which is the most generous of the statute of limitations available to Mr. Musk. And
Mr. Musk can't carry his burden of showing he was kept in the dark all these years.
In fact, the opposite's true, and I'll walk, I'll walk quickly through some of
the reasons I say that with you. Uh, there's a lot of evidence, starting with
Mr. Musk's testimony right here in that chair.
He told you that as early as twenty seventeen, he felt that Brockman and
Altman really, what they really wanted to do was to create a for-profit where they
had mu-- as much shareholder ownership as possible. That's what he told you sitting
in that box. In twenty seventeen,
he'd concluded that Brockman and Altman wanted to create a for-profit where they
had much, as much shareholder ownership as possible. But Musk took no steps then.
You will also recall the testimony of Siobhan Sylas and Mr. Altman of a meeting
in, in August twenty seventeen at Tesla's Deer Creek Road headquarters, where Altman
walked Musk through a draft term sheet contemplating creation of the for-profit.
So
I just wanna linger on this because before this term sheet, which I'm gonna turn to
in a moment, about what's, it was, it was a week to ten days before this, Altman
drove down to Tesla's headquarters and had a meeting discussing this term sheet with
Mr., with Mr. Musk.
Then a few days later, he sends it to him, puts it in his inbox. The term sheet
makes clear that by no later than this date, August twenty eighteen, OpenAI was
planning to launch a for-profit.No question about it, that would attract more
than ten billion dollars, ten billion plus in capital, and hope to return
enormous amounts of money to those investors in the form
of profit.
This is as clear and direct notice as you could have.
Now, remember at his deposition, members of the jury, Mr. Musk, uh, testified that
he couldn't remember, just couldn't recall whether he'd read the term sheet. At
trial,
Mr. Musk had a recovered memory.
Um, turns out he had read only the purple box,
the disclaimer at the top. This seems improbable. Um,
this was a four-page summary document.
Altman presented it to him at an in-person meeting,
and then sent it by email directly to him on a subject that Mr. Musk claims to have
cared about a great deal.
Mr. Mollo told you this morning that Mr. Musk is tremendously passionate about
artificial intelligence, yet he couldn't... This is what, this is what the
term sheet looks like. I-a hard copy. So it's, this is not small print. It's a
summary. In fact, it s-says summary term sheet at the top of it. This is not a
fifty or sixty-page document. It's four pages. Um, and he spent an hour with Mr.
Altman and then got, [chuckles] got it in his inbox. Uh, you can decide whether it's
plausible to think that he didn't read it. You can consider in con- in that, that
we're talking about a, a guy who has a legion of advisors,
has two chiefs of staff,
-has more lawyers than you can imagine. -Objection.
Um,
the jury will ultimately decide what to name those individuals.
Uh, there was lots of varying testimony on that. Proceed.
Thank you, Your Honor. Um,
so
M-M-M-Mr. Musk had the most direct in-person, by email, both of them,
um,
notice of this document that you could possibly have. He says he cares a lot
about it. If he cared about it,
he read it. Frankly, even if he didn't, he would have. But the truth is, is under
the court's instructions, which, which of, which, which of course define the task
before us,
it, it doesn't matter because it's Mr. Musk's burden to prove that he didn't know
those facts or that he couldn't, with reasonable diligence, have learned them.
So even if you believe he didn't understand what this little document meant
after talking about it for an hour, it doesn't matter. You'd have to conclude
that he couldn't have reasonably known what, what it was, even though it was
sitting in his inbox.
Um,
he could have discovered these facts, members of the jury. The statute of
limitation bars the claim. Well before turning now to open sourcing, well before
twenty twenty-one, it was likewise clear that OpenAI was no longer open sourcing
its technology routinely and had entered into exclusive licenses with Microsoft for
that technology.
OpenAI announced this to the world in a public blog post that it was not going to
open source
GPT-three. You can see that, um, right here on this slide, which is DX-eight
ninety-nine.
Um, by September twenty twenty,
Mr. Musk was tweeting his complaint to the world that OpenAI seemed like the
opposite of open, that OpenAI is essentially captured by Microsoft.
And what this tells you
is that by
this time,
um,
M-Mr. Musk was not only fully on notice, but he had decided that these things that
he says were a breach had happened.
And by August fifth, twenty twenty-one, OpenAI's close relationship with Microsoft
was also crystallized and well known to Musk. You've seen the evidence of this.
Mr. Altman texts and says, "Do you have a few minutes to talk about the Microsoft
OpenAI investment?"
And he was told about it even before it happened, uh, as th-this,
as this tweet indicates. There was a blog post that publicly announced it in twenty
nineteen, years before the statute of limitations,
and there was more follow-up texting between
Mr. Musk and Mr. Altman, as Mr. Altman sought the advice and input of Mr. Musk
here in October twenty twenty.
Moreover, Ms., Ms. Zilis kept Mr. Musk updated about these investments,
um, again and again and again. Um,
in the September twenty twenty tweet, we saw that Mr. Musk complained that OpenAI
was captured by Microsoft, and the evidence here is that everything Mr. Musk
complains about today, he knew back before August fifth,
twenty twenty-one. And
this demonstrative, which I think Ms. Eddy visited with you on just a little, a
little while ago, it tells the tale. All of these items are the evidence that Mr.
Musk knew about it, and I believe Mr. Mollo, even this morning at page
nine of the transcript, said that defendants violated the basic principle of
commitment to the nonprofit by entering into the twenty twenty deal with
Microsoft, so we could add that concession this morning.
Uh, objection, Your Honor. That, that is
not true.
Um,
the, the evidence that Musk knew or should have known of the basis of, of his claims
is simply overwhelming. It's overwhelming.
To escape this evidence, Musk tries a couple of things, none of them
successfully.
First, Musk claims that Sam Altman gave him assurances in twenty twenty when he
tweeted his concerns. Let's look at the text.
[clears throat] Those assurances weren't misleading, they were true. Musk claims he
didn't have visibility into the details of these transactions, and he couldn't
have gotten that visibility.
Here again, the evidence defeats the claim.
Musk himself acknowledges that he was in regular contact all throughout this period
with OpenAI in these years after he left the board. He'd asked Siobhan Zilis,
with whom he was
a close associate, to stay close and friendly with OpenAI. So she'd taken up a
post on OpenAI's board. She was on the special committee that approved the twenty
twenty-one Microsoft transaction. She, along with everyone else on the OpenAI
board, approved that transaction, the twenty twenty-one one billion dollar
Microsoft investment, approved the twenty twenty-three
Microsoft ten billion dollar transaction. And in all of this time, Altman is trying
to get Musk's attention to tell him what's going on. These are all
evidence that all-- exhibits that show
Mr. Altman looking to get
Musk's attention, looking to keep him up to date. The idea that Mr. Musk didn't
know what was going on is not serious. It's not serious, and he knew all this
long before he had the chance to bring a lawsuit within a, in, in a timely manner.
And Zilis
specifically facilitated discussions between Musk and Altman about the twenty
nineteen and twenty one-- twenty one transactions. There's no evidence that any
details were withheld or blocked. Mr. Musk can't even recall what he learned on
his various calls with Altman. And here again, that's why we have a statute of
limitations.
And I should emphasize in saying that, that the question isn't what Musk actually
knew.
The question is if he can prove
that he didn't know or didn't suspect
or couldn't, through reasonable diligence, have known. But we know he did suspect.
Way back in twenty seventeen, he told you,
and we know he knew. He certainly can't prove that he didn't, 'cause all he says
is, "I can't recall." Um,
uh, Counsel, Mr. Mollo showed you an article from some
magazine in twenty twenty-two, and it-