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The Musk Lawsuit Feels Like There is Something Major We Don't Know About

Austin Smith

Published: November 23, 2024 8:51 am

Key Points:

• Original OpenAI investor Musk is suing both Microsoft (NASDAQ: MSFT) and OpenAI claiming the company prioritized profit over their mission
• His complaint criticizes OpenAI’s management choices, particularly its change to a for-profit model
• Musk’s large AI investments and aggressive posture point to a lawsuit aiming more on slowing down competitors than on seeking financial damages.
• Also: forget the drama around this lawsuit and look at ‘The Next Nvidia’ stocks for life changing returns in 2025. Click here to read more.

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Transcript:

[00:00:00] Lee: Well, Doug, it’s pretty funny to me that after all Elon Musk has been through over the last 90 and 120 days, that now he’s decided to file suit against Microsoft and open AI, and if I’m not mistaken, he was one of the original founders slash investors in open AI and, what do you think about that, given that he’s the richest man in the world, and he’s going after, one of the biggest corporations in the world?

[00:00:36] Doug: Well, I know that he’s upset because he put money into OpenAI when it was supposed to be a non profit and, he complained about how it was run and, he claims he was kicked out, which is probably true. Now, here’s the point. He has the largest server operation in the world, in Tennessee, for artificial intelligence.

[00:01:04] Doug: It is massive. It is basically it’s going to be one ludicrously large supercomputer. So I don’t understand how the lawsuit works. If you go into court and say. Well, what are you suing these guys for? Like, you, want us to believe that they’re a monopoly when you’re, potentially this far ahead of them?

[00:01:27] Doug: Well,

[00:01:27] Lee: I, you hit along. The biggest point you really did is that remember it was supposed to be non-profit. Remember?

[00:01:36] Doug: No, Listen. for it wasn’t until, it wasn’t until it wasn’t, as they say, and then the management thought, well, we’d be better off. We can make more money on our options if,

[00:01:47] Lee: yeah. Yeah, Well. The suit in the suit, and this is just a kind of a scattershot that I had to read through it. Obviously, it’s long and the lawyers again will always win. But, Musk, if I’m correct, alleges that they’re putting profits over humanity. And that’s the main gist of the suit. And the, question is could he win this?

[00:02:17] Lee: and if he does, what are the, is he asking for a lot of damages? Is he asking for them to change thing? Or is he asking to come back in and help, redirect things?

[00:02:27] Doug: Well, the nature of a suit like this, based on what it says in the complaint is that you change. So I invested in something and then you changed one of the critical dynamics.

[00:02:40] Doug: Okay. Right. I’m not quite sure how he pulls Microsoft into this, although I know Microsoft bought a Pete, invested in open AI, but they weren’t a controlling shareholder. As far as I know, they don’t even get a board seat. one of the reasons they don’t have a board seat is they’re worried about antitrust problems.

[00:03:02] Doug: They don’t want to be close to a open AI. And I don’t see Microsoft’s role in this at all, quite frankly. I mean, maybe Microsoft wanted it to be a for profit organization, but they never had a big say about that.

[00:03:18] Lee: Yeah. I don’t know if I get it unless there’s, and this is, I get the sense this is indeed, there’s something here that we just don’t know about something that probably might not even end up in the court documents because it’s between Musk the open AI between him and Altman between who knows, but I’ll tell you one thing that could be it, something that was either, not put into any written document or something like that, that, the whole profit over humanity, angle.

[00:03:47] Lee: Um, maybe he just wants to ship things up.

[00:03:51] Doug: He may just want to slow them down. He is now one of the three major competitors in that space. And it may be that anything that they can throw in front of them and, trip them a little bit is to his advantage, but he is sinking billions of into this. And I, yeah,

[00:04:11] Lee: Yeah.

[00:04:12] Doug: I think you’re right. Look, it’s a funny business. It costs billions of dollars to get into, but it doesn’t have a big moat. And, you’ve got three or four decent sized players. And then about 20 that are, in niche pieces of this. So the only person who wins in all of this is NVIDIA (NASDAQ: NVDA).