The trial pitting Elon Musk against OpenAI CEO Sam Altman made clear the two billionaires agreed on one thing: Building artificial intelligence would require significant resources — and enormous amounts of money.
It may seem obvious now, as an AI-obsessed stock market helps finance a global construction boom of chipmaking factories and energy-hogging data centers to keep chatbots running, but testimony and evidence showed how people with outsized control of the AI industry were privately debating its costs nearly a decade ago.
“Even raising several hundred million won’t be enough,” Musk said in a 2018 email to Altman and other OpenAI co-founders about what he increasingly saw as a futile attempt to compete with Google. “This needs billions per year immediately or forget it.”
The soaring costs factored into the trajectory of OpenAI, which began in 2015 as a nonprofit dedicated to developing AI for the common good and is now a capitalistic enterprise valued at $852 billion. OpenAI and other AI companies move toward historically large Wall Street debuts, the trial also raised questions about whether anything but commercial interests can steer AI’s future.
It is possible to build big things only with nonprofit money, but in the case of OpenAI’s early years, the uncertainty around AI also made it a risky investment, said Karan Girotra, a professor of operations, technology, and innovation at Cornell Tech. Now, he said, investment in AI is no longer speculative.
“Now it’s traditional investment in something we know works,” Girotra said. “People want your car, you need to build the factory ahead of demand.”
In his lawsuit, Musk accused OpenAI of betraying its charitable mission for building AI, saying Altman and fellow co-founder Greg Brockman went behind his back and unjustly enriched themselves. OpenAI, in turn, has said Musk supported plans to form a for-profit company and filed his 2024 lawsuit to undercut the ChatGPT maker’s success as he built his own AI company, xAI.
The federal jury in Oakland, California, never got to deliver a verdict on the merits of the case, determining Musk’s lawsuit missed a statutory deadline and dismissing it Monday after a three-week trial.
But the trial put on record details of internal battles that presaged today’s societal and political debates over AI’s impacts and costs.
“It’s sort of hard to imagine at this point, given where AI has gotten,” testified Kevin Scott, Microsoft’s chief technology officer, as he explained to jurors why his company opted to invest billions of dollars to help build OpenAI’s technology after founding donor Musk quit OpenAI’s board in 2018.
“It was before ChatGPT,” Scott said. “It was before these remarkable things that are happening right now and so most of the people at Microsoft were very skeptical about whether or not all of these claims were going to materialize into reality.”
Microsoft, a defendant in the lawsuit, at the time was also looking for a way to compete with Google in AI research. OpenAI told Microsoft what they needed was more data and more computing resources — and if they had that, their AI systems would grow far more powerful.
“The things that they wanted and ultimately that we helped them do were very capital-intensive projects like building giant data centers, full of very expensive computers and networks,” Scott said.
It remains in dispute how much profit was the prime motivator for the shift to OpenAI’s capitalistic enterprise, which is not yet profitable but likely headed for an initial public offering as soon as later this year.
What is clear, however, is how the costs involved constrained the company’s options.
