WEBVTT - Monologue: OpenAI Was Never A Non-Profit

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<v Speaker 1>Aw Zone Media. Hello On, Welcome to this week's Better

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<v Speaker 1>Offline Monologue. I'm your host ed ZiT Trump, and I

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<v Speaker 1>know some of you are going to say, Ed, didn't

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<v Speaker 1>you say we'd get a second part? Didn't you say

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<v Speaker 1>we get a second part? Ed? Where's the second part?

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<v Speaker 1>It's coming tomorrow. You get a monologue as well. Good Lord.

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<v Speaker 1>The complaints from some of you just kidding. You're all

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<v Speaker 1>very nice. Now, because I deeply hate myself, I decided

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<v Speaker 1>to sit down and read case four to two four

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<v Speaker 1>CV zero four seven two to two ygr from the

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<v Speaker 1>United States District Court of West the Northern District to California. Nevertheless,

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<v Speaker 1>what I'm talking about, of course, is Elon Musk's lawsuit

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<v Speaker 1>against Open a I, filed in August. November of last year,

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<v Speaker 1>there was an amended complaint. Nevertheless, Elon Musk is alleging

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<v Speaker 1>multiple kinds of fraud, as well as violations of the

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<v Speaker 1>Sherman Act and to monopoly law from the late eighteen hundreds,

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<v Speaker 1>which most notably was the same law that might lead

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<v Speaker 1>to the breakup of Google's ad taken search businesses. Elon Musk,

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<v Speaker 1>he's suing, and he loves to sue, but in Layman terms.

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<v Speaker 1>Musk alleges that Sam Wortman tricked him into funding open

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<v Speaker 1>ai as a charity when he actually wanted it to

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<v Speaker 1>be more like a for profit entity, a classical start

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<v Speaker 1>up model. Musk also alleges a conspiracy by open ai

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<v Speaker 1>to stop people who invested in open ai from investing

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<v Speaker 1>in other generative AI companies, specifically Musk zons Ai as

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<v Speaker 1>long as others like Anthropic. This sounds like some Musky

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<v Speaker 1>and bullshit, but this is actually true. It was reported

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<v Speaker 1>by The Information and other outlets. The lawsuit itself is contrived,

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<v Speaker 1>including annoying things like Musk's lawyers referring to open AI's

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<v Speaker 1>tax exempt nonprofit as a for profit market paralyzing Gorgan

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<v Speaker 1>Just you don't need to write like this. He fucking

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<v Speaker 1>loses anyway. It is pretty interesting, though, and it explores

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<v Speaker 1>the deeply weird beginnings of open ai itself. To explain

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<v Speaker 1>Joe and was originally founded in twenty fifteen by Elon Musk,

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<v Speaker 1>Sam Mortman and a selection of other engineers specifically as

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<v Speaker 1>a non profit making open source artificial intelligence, and it

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<v Speaker 1>was meant to be a research house. Now another thing

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<v Speaker 1>is it was specifically made as a reaction to Google's

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<v Speaker 1>acquisition of artificial intelligence firm deep Mind. The plan, according

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<v Speaker 1>to emails shared as part of the lawsuit, was to

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<v Speaker 1>beat Google to the punch by making artificial general intelligence,

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<v Speaker 1>you know, the entirely fictional concept of a conscious autonomous computer,

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<v Speaker 1>and then they go and open source it in what

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<v Speaker 1>Sam Moortman called an AI Manhattan project. Just I could

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<v Speaker 1>go into the history there, but is that really what

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<v Speaker 1>you want to compare this anyway? Anyway? Aortmand would go

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<v Speaker 1>on to tell Elon Musk that the mission would be

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<v Speaker 1>to create the first general AI AGI and use it

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<v Speaker 1>for an individual empowerment i e. The distributed version of

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<v Speaker 1>the future that seems the safest. More generally, safety should

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<v Speaker 1>be a first class requirement. And that is a quote,

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<v Speaker 1>by the way, with the technol owned by the foundation

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<v Speaker 1>referring to open AI and use for the gift of

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<v Speaker 1>the world. Just a lot of bollocks really, Anyway. Things

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<v Speaker 1>began to get tense in September twenty sixteen when Sam

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<v Speaker 1>Wortman arranged a deal with Microsoft to buy sixty million

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<v Speaker 1>dollars of Compute for Well for ten million dollars in

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<v Speaker 1>exchange for evangelizing Microsoft as zero as their preferred cloud provider,

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<v Speaker 1>along with some sort of vague consultancy services over Microsoft's models.

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<v Speaker 1>Musk would respond to the terms by saying, fine with me.

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<v Speaker 1>If they don't use the active messaging would be worth

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<v Speaker 1>way more than fifty million. Nots seemed like a Microsoft's

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<v Speaker 1>marketing bitch. Two months later, Microsoft were put out a

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<v Speaker 1>blog post saying that open ai was choosing as zero

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<v Speaker 1>as their primary cloud platform and that open ai would

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<v Speaker 1>become an early adopter of as zure En series virtual machines,

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<v Speaker 1>some of Microsoft's early GPU compute instances. It's been going

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<v Speaker 1>quite a while. A year later, in an exhibit from

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<v Speaker 1>the trial from September twenty to twenty seventeen, things would

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<v Speaker 1>get a little more fraid with Iliasuitskava, a gifted engineer

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<v Speaker 1>recruited by Musk in AI's earliest days, sending an email

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<v Speaker 1>to both Musk and Aortman sharing concerns about the future.

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<v Speaker 1>Aortman worried about how much money would cost the fund.

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<v Speaker 1>Open Ai had been considering finding a way to make

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<v Speaker 1>it a wouldn't you guess it? For profit entity, but

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<v Speaker 1>Sitzkev had other problems and was far more worried about

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<v Speaker 1>Altman and Musk. In the email, Suitzkeave of raised concerns

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<v Speaker 1>that Elon Musk wanted unilateral absolute control over the AGI,

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<v Speaker 1>and that while Musk had claimed otherwise in negotiating how

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<v Speaker 1>to keep open Ai going, it was very clear that

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<v Speaker 1>and I quote absolute control was extremely important to him.

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<v Speaker 1>As an example, Suitzkeaver added that Musk had said that

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<v Speaker 1>he needed to be CEO of the new company so

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<v Speaker 1>that everyone would know that he was the one in charge,

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<v Speaker 1>even though he also stated that he hated being CEO

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<v Speaker 1>and would much rather not be CEO. Suitzkeva added the

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<v Speaker 1>Musk's concerns that there would be an AGI dictatorship run

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<v Speaker 1>by Demis Hassabis, CEO of Deep Mind, but that in

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<v Speaker 1>the current structure that Musk was suggest he would become

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<v Speaker 1>a dictator if he chose to all very good stuff.

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<v Speaker 1>Siitzkav bizarrely then immediately moved on to say something very

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<v Speaker 1>very similar to Sam Altman, saying that and I quote

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<v Speaker 1>he didn't understand why the CEO title was so important,

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<v Speaker 1>and that Sam Altman's reasons had changed, and that it

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<v Speaker 1>was really hard to understand what was driving them Siitzkev

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<v Speaker 1>also added a question and I quote, is AGI truly

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<v Speaker 1>your primary motivation? How does it connect to your political goals?

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<v Speaker 1>How has your thought process changed over time? Ortmand would

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<v Speaker 1>reassure Musk, both personally and through others, that he remained

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<v Speaker 1>focused on open AI's nonprofit mission. In January twenty eighteen,

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<v Speaker 1>Orton would suggest a ridiculous idea selling cryptocurrency to fund

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<v Speaker 1>open Ai, which Musk would warn would simply result in

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<v Speaker 1>a massive loss of a credibility for open Ai everyone

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<v Speaker 1>associated with the ico, referring of course, to an initial

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<v Speaker 1>coin offering, a flimsy idea that just means just buy

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<v Speaker 1>a bunch of tokens before the thing goes live, basically

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<v Speaker 1>how crypto works. I guess it was a whole boom.

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<v Speaker 1>I'm not doing a fucking podcast about it. Let's move on.

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<v Speaker 1>Musk would step down from open ai in February twenty eighteen,

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<v Speaker 1>and a month later, Sam Wonan would propose a fixed

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<v Speaker 1>maximum term equity race, essentially selling stock in open ai

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<v Speaker 1>but an associated entity. Yet it was still a nonprofit

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<v Speaker 1>at the time, and that had a maximum amount you

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<v Speaker 1>could make on buying it. It's just very confusing and

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<v Speaker 1>What it basically means is it means that they would

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<v Speaker 1>create an entity on the side that you could raise

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<v Speaker 1>money for that would also own all the bits. I'll

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<v Speaker 1>get to that in a second. Nevertheless, this is all

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<v Speaker 1>extremely dodgy and weird. Around a year later, in twenty nineteen,

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<v Speaker 1>Sam Wonman would eventually create the legally precarious for profit

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<v Speaker 1>arm of open Ai what I was just talking about,

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<v Speaker 1>and it was called open AILP and immediately, according to

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<v Speaker 1>Elon Musk's lawsuit, transferred most of the company's assets and stuff.

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<v Speaker 1>The same year, open Ai would strike an exclusive partnership

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<v Speaker 1>with Microsoft to provide the compute for their models. As

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<v Speaker 1>part of the deal, open Ai would give Microsoft full

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<v Speaker 1>license to use their pre AGI intellectual property and research,

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<v Speaker 1>which is to say, literally everything they've ever made, and

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<v Speaker 1>this would in turn make well, this is the funny,

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<v Speaker 1>weird part. This is the really crazy. This is the

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<v Speaker 1>part that really gets me. They would own everything. Microsoft

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<v Speaker 1>would own everything until they hit AGI. Now, AGI at

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<v Speaker 1>this point has been defined by open Ai and Microsoft

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<v Speaker 1>as when they hit one hundred billion dollars in profit.

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<v Speaker 1>Every time I read about and talk about this stuff,

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<v Speaker 1>I just think, who is the idiot? Here, is it

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<v Speaker 1>Satching the Dellar, Is it Sam Altman or they both

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<v Speaker 1>just the kind of mediocre rich guy who just bounces

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<v Speaker 1>their skulls together and they say who has the shittiest idea?

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<v Speaker 1>Who will be the dumbest boy today. Nevertheless, Microsoft owns

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<v Speaker 1>everything open Ai makes until they invent Agi, by which

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<v Speaker 1>I mean they make one hundred billion dollars in profit.

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<v Speaker 1>It's all so goddamn stupid. It's also stupid. Now at

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<v Speaker 1>some point I want to do an entire episode on

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<v Speaker 1>this lawsuit because it's got so many exhibits and so

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<v Speaker 1>many warring incentives. Elon Musk's Xai competes directly with open

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<v Speaker 1>ai to make large language models that no one really

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<v Speaker 1>needs and that cost more to run than they will

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<v Speaker 1>ever make. And this lawsuit, as with others, features broad

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<v Speaker 1>demands for discovering depositions of people at LinkedIn co founder

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<v Speaker 1>and former open ai board member Read Hoffman, and attempts

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<v Speaker 1>to name both Microsoft and Hoffman himself as co defendants.

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<v Speaker 1>Since filing the lawsuit, and the Elon Musk led consortium

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<v Speaker 1>of Bias has offered ninety seven point four billion dollars

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<v Speaker 1>for the assets of open AI's charity, an often that

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<v Speaker 1>would require multiple different government agencies to approve, which open

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<v Speaker 1>Aies board has now declined either way. While Musk is

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<v Speaker 1>regularly full of ship, he's right about one thing. Sam

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<v Speaker 1>Woman clearly had no intention of ever keeping open ai

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<v Speaker 1>as nonprofit, nor was he ever dedicated to doing so,

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<v Speaker 1>or really anything of them make in himself CEO and

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<v Speaker 1>getting a billion dollars. Since twenty nineteen, open ai has

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<v Speaker 1>raised over twenty billion dollars in funding, and it's reportedly

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<v Speaker 1>raising as much as forty billion dollars in the next round,

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<v Speaker 1>led by fucking Masayoshi son of soft Bank. It's so good.

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<v Speaker 1>I love it. And they're likely doing this because the

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<v Speaker 1>company burned five billion dollars in twenty twenty four, and

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<v Speaker 1>it is said to as much as double that in

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<v Speaker 1>twenty twenty five, according to estimates. Musk lawsuit is likely

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<v Speaker 1>an attempt to interfere with this funding or to destabilize

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<v Speaker 1>open Ai. It's week its point, it's flimsy status as

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<v Speaker 1>a nonprofit that will require a great deal of legal

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<v Speaker 1>effort to unwind if it's even possible at all, And

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<v Speaker 1>I must be clear it may not be possible. I

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<v Speaker 1>don't think there's any precedent of anyone ever taking a

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<v Speaker 1>nonprofit of this size, of this weirdness connected to like

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<v Speaker 1>twenty different for profit entities, and turning it into a

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<v Speaker 1>for profit. It just doesn't make sense. But I will

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<v Speaker 1>tell you something that might make you happy or might

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<v Speaker 1>just make your laugh, which is open AI only has

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<v Speaker 1>a a year and a half to do so, a

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<v Speaker 1>year and a half to turn from a nonprofit into

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<v Speaker 1>a for profit because a year and a half all

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<v Speaker 1>that equity they raised, but it's not equity, it's some

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<v Speaker 1>weird for profit sharing. Nevertheless, all the money they've raised

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<v Speaker 1>in the last round, the six point something billion dollar one, yeah,

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<v Speaker 1>it all turns into debt. Oh well, I'm sure they'll

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<v Speaker 1>work it out. They sure haven't yet