In 2018, Elon Musk left the board of artificial intelligence research firm and ChatGPT developer OpenAI, claiming at the time that the reason was to avoid any conflict of interest with Tesla. But the latest reports suggest that the real reason for Musk’s departure was a failed power grab.
OpenAI, which was founded in 2015 as a high-profile nonprofit with the backing of billionaire tech luminaries like Musk and Reid Hoffman, who pledged a group investment of $1 billion, has attracted some of the top talent in the field, causing them to leave big tech companies and academia.
But by early 2018, Musk told OpenAI’s other founder, Sam Altman, that he thought the company had fallen badly behind Google, people familiar with the matter said. So Musk proposed a possible solution: he would take control of OpenAI and run it himself.
As a result, Altman and the other OpenAI founders turned down Musk’s offer. Musk then left the company and reneged on a promise of a massive donation program. The conflict culminated in Musk’s announcement of his departure on Feb. 20, 2018, and its fallout will shape the AI industry that is changing the world and OpenAI at its core.
The power struggle
The conflict also created a public rift between Musk and Alterman, two of the most important people in tech today. For the first time, sources close to the situation have revealed details of the power struggle between them.
Back in 2018, there was no reason to think that the impulsive Musk or the eccentric, quiet Altman would be at the center of this Silicon Valley story, even though they were already among the most prominent figures in Silicon Valley at the time. Musk had other headaches at the time: Tesla was still struggling to meet its production goals for the Model 3 sedan, its stock price was falling, and the company’s future was in jeopardy.
Greg Brockman, co-founder of OpenAI and then chief technology officer, was against Musk taking over the company, as were the other founders. A power struggle ensued, according to people familiar with the matter.
Alterman, who was running the powerful startup incubator YCombinator at the time, added president to his title in 2018 in addition to serving as a director of OpenAI, tax documents show.
Musk loses to Altman
Musk subsequently withdrew from the OpenAI board. He and OpenAI publicly stated that the reason for his departure was a conflict of interest. Tesla was developing its own AI technology for self-driving systems at the time and would be competing with OpenAI for talent. This statement was true to some extent. Tesla had already poached one of OpenAI’s best minds, Andrej Karpathy, who went on to become the architect of Tesla’s Autopilot system.
But at OpenAI, few people believe Musk left for that reason. His exit speech at the OpenAI offices focused on potential conflicts of interest, but most employees didn’t buy the story, and they didn’t fully believe it.
OpenAI said in a statement that Musk would continue to fund the organization, but Musk did not do so, sources close to the situation said. He had already donated $100 million (currently about RMB 687 million) and had pledged to give about $1 billion (currently about RMB 6.87 billion) over the next few years, but he stopped after he left. This has left OpenAI unable to pay the high costs required to train AI models on supercomputers.
On March 11, 2019, OpenAI announced that it would create a for-profit entity in order to raise enough money to pay for the computing power needed to pursue the most ambitious AI models. The company wrote at the time, “We want to improve our ability to raise money while continuing to serve our mission. No existing legal structure that we know of can strike the right balance.” OpenAI said it set a profit cap for investors, with the excess going to the initial nonprofit.
Altman also made a decision unusual for a tech company owner: He would hold no equity in the new for-profit entity, people familiar with the matter said. He was already very wealthy at the time, having invested in several very successful tech startups, and didn’t need the money.
He also believed that the company needed to become a business to continue their research, but he told people that the project was not about making money. Avoiding any ownership interest would help him stay aligned with his original mission. But that decision actually turned off some of OpenAI’s potential investors, who were concerned that Alterman didn’t see the benefits of the project.
Less than six months later, OpenAI received a $1 billion investment from Microsoft. Microsoft provided not only the money, but also the infrastructure expertise. Together, they built a supercomputer to train large models, eventually creating ChatGPT and the image generator DALL-E. The latest language model, GPT-4, has 1 trillion parameters.
Musk is furious
ChatGPT took the world by storm when it launched last November, immediately making OpenAI the hottest new tech startup and forcing Google to play catch-up.
Musk was furious, sources close to the situation said. Last December, a month after ChatGPT launched, Musk revoked OpenAI’s access to Twitter’s data feed. This was a contract that OpenAI signed with Twitter before Musk bought it.
On Feb. 17, he tweeted, “OpenAI was created as an open source (that’s why I named it ‘Open’ AI) nonprofit to rival Google, but now it has become a closed-source, profit-maximizing company that is effectively controlled by Microsoft. company. That’s not at all what I want.”
Musk says OpenAI has become a Microsoft-controlled company
Then on March 15, he tweeted, “I’m still confused as to how a non-profit I donated about $100 million to became a for-profit organization valued at $30 billion. If this is legit, why isn’t everyone doing it?”
Shivon Zilis, director of operations at Musk’s brain-machine interface company Neuralink, has stepped down as director of OpenAI, the foreign press reported Thursday. Zilis gave birth to twins for Musk.
On Friday, Musk tweeted, “I’m sure everything will be fine.” He also posted an emoji of Elmo, a cartoon character from the children’s TV show “Sesame Street,” that read, “I realize that artificial intelligence, the most powerful tool ever created by man, is now in the hands of a ruthless monopoly.”
OpenAI was not available for comment. Musk did not respond to a request for comment.