Emails in Musk’s lawsuit against OpenAI expose the startup’s rocky origins.
As OpenAI was ironing out a new deal with Microsoft in 2016 — one that would nab the young startup critical compute to build what would become ChatGPT — Sam Altman needed the blessing of his biggest investor, Elon Musk.
“$60MM of compute for $10MM, and input from us on what they deploy in the cloud,” Altman messaged Musk in September 2016, according to newly revealed emails. Microsoft wanted OpenAI to provide feedback on and promote (in tech circles, “evangelize”) Microsoft AI tools like Azure Batch. Musk hated the idea, saying it made him “feel nauseous.”
Altman came back with another offer: “Microsoft is now willing to do the agreement for a full $50m with ‘good faith effort at OpenAI’s sole discretion’ and full mutual termination rights at any time. No evangelizing. No strings attached. No looking like lame Microsoft marketing pawns. Ok to move ahead?”
“Fine by me if they don’t use this in active messaging,” Musk responded. “Would be worth way more than $50M not to seem like Microsoft’s marketing bitch.”
Musk released these emails and others last week as part of a lawsuit he’s filed against OpenAI and Microsoft. They are ostensibly meant to demonstrate an anticompetitive partnership between the two companies. But primarily, they expose the details of early collaborations and power struggles between Altman and Musk, who invested between $50 million and $100 million in the earliest iteration of OpenAI. They trace OpenAI’s evolution from an open-source nonprofit to what the lawsuit calls a “closed-source de facto subsidiary” of Microsoft that abandoned its mission to develop AI for good. And they lay bare the complete and utter unraveling of Musk and Altman’s once-promising partnership.
“Elon’s third attempt in less than a year to reframe his claims is even more baseless and overreaching than the previous ones,” OpenAI spokesperson Hannah Wong wrote in a statement to The Verge. “His prior emails continue to speak for themselves.”
Musk and Altman launched OpenAI united by fears of human-level intelligence in the hands of tech giants like Google — only to see it become the kind of tech juggernaut they feared. After winning a CEO position that Musk coveted, Altman chose to keep OpenAI’s cutting-edge AI behind closed doors, claiming it was too dangerous to be openly released. The decision incensed Musk, who left OpenAI’s board to found his own competitor, xAI. Nearly a decade after the pair founded OpenAI, the two companies are amassing billions of dollars and Musk is taking the fight to court — in a race to own what both men see as the inevitable future of computing.
“Been thinking a lot about whether it’s possible to stop humanity from developing AI,” Altman wrote in 2015 in an email to Musk as a pitch to start OpenAI. “If it’s going to happen anyway, it seems like it would be good for someone other than Google to do it first.”
The talent problem
From its inception, OpenAI was caught between two conflicting forces: an idealistic mission to benefit humanity and a cutthroat race against tech behemoths. Musk and Altman agreed that whatever their motivations, securing top talent (along with piles of cash) would be a paramount concern. This early compromise would set the stage for what Musk would later call the startup’s pursuit of profit over principle.
In 2015, the startup was known as YC AI — a lab tucked inside Y Combinator’s nonprofit research division, YCR. Altman, then president of the startup incubator, leveraged its extensive network and resources to attract researchers and money. Musk urged Altman and CTO (now president) Greg Brockman to seek over $100 million in funding, cautioning them that anything less would appear paltry compared to the deep pockets of tech giants like Google and Facebook.
“I think we should say that we are starting with a $1B funding commitment. This is real. I will cover whatever anyone else doesn’t provide,” Musk said in 2015 emails revealed by OpenAI earlier this year in response to Musk’s lawsuit.
Still, despite Musk’s support and a war chest of millions of dollars, the fledgling organization faced an early challenge that plagues most startups: the fierce competition for top talent. OpenAI might be the hottest place to work in Silicon Valley today, but a decade ago (and long before the launch of ChatGPT), many top AI researchers were unlikely to give it a second glance.
In their aggressive bid for the best AI researchers, Altman and his team devised an unusual compensation package: a base salary of $175,000, a “part-time partner” title at YC, and 0.25 percent equity in each YC startup batch. (Now, it’s more common for AI researchers to be compensated closer to $1 million annually.) Altman billed it as a “Manhattan Project for AI,” per one email to Musk, and sensed he could get many of the top 50 researchers to join and “structure it so that the tech belongs to the world via some sort of nonprofit but the people working on it get startup-like compensation.”
The goal was to assemble an elite founding team of seven to 10 members — whatever it took to win the industry’s best minds. Still, Google’s AI lab, DeepMind, was on their heels.
“DeepMind is going to give everyone in OpenAI massive counteroffers tomorrow to try to kill it,” Altman wrote to Musk in December 2015. “Do you have any objection to me proactively increasing everyone’s comp by 100-200k per year? I think they’re all motivated by the mission here but it would be a good signal to everyone we are going to take care of them over time.”
“Sounds like DeepMind is planning to go to war over this,” Altman added.
Musk approved of the salary bumps, and by February 2016, OpenAI’s founding team was offered a $275,000 salary plus YC equity, while subsequent hires received a $175,000 salary with performance-based bonuses of $125,000 or equivalent stock in YC or SpaceX. Brockman added that there were three special cases: himself, along with cofounders Ilya Sutskever and Trevor Blackwell. It was later reported that Sutskever earned more than $1.9 million in 2016, and he told The New York Times that he “turned down offers for multiple times the dollar amount” he accepted from OpenAI. “I don’t know what will happen if/when Google starts throwing around the numbers they threw at Ilya,” Brockman wrote to Musk as he outlined a plan to poach researchers.
“We need to do what it takes to get the top talent. Let’s go higher. If, at some point, we need to revisit what existing people are getting paid, that’s fine,” Musk replied. “Either we get the best people in the world or we will get whipped by DeepMind. Whatever it takes to bring on ace talent is fine by me.” He warned that a victory by DeepMind, which was causing him “extreme mental stress,” would be really bad news with their “one mind to rule the world” philosophy. “They are obviously making major progress and well they should, given the talent level over there,” Musk added.
Source: https://www.theverge.com/2024/11/18/24299787/elon-musk-openai-lawsuit-sam-altman-xai-google-deepmind