Inside the Courtroom Battle Between Elon Musk and OpenAI

[00:00:00] [SPEAKER_00] This podcast is brought to you by Atlassian Rovo, AI that takes your team from AI novice to AI native. What if AI handled the busy work for you? Updating JIRA tickets, drafting campaign briefs and confluence, writing project updates, all without you lifting a finger. Meet Rovo, AI that works where your team already works, using your company's data and permissions to take action. Get started with Rovo at rovo.com. That's rovo.com.

[00:00:33] [SPEAKER_03] Welcome to Tech News Briefing. It's Tuesday, May 5th. I'm Peter Ciampelli for The Wall Street Journal. After almost a decade of swinging between hype, disappointment and back, autonomous taxis are finally hitting the streets across the U.S. But which companies are winning the robo-taxi race? We're going under the hood. And then. Elon Musk and Sam Altman, two titans of tech, were once friends. But last week they were facing off in federal court.

[00:00:59] [SPEAKER_03] Musk is suing OpenAI, saying the company, quote, stole a charity. We'll unpack those allegations and break down what might happen next in this blockbuster trial. But first, self-driving taxis have been the focus of dozens of tech startups and have attracted billions of dollars of investment over the last decade. The path to getting them on the road has been long and winding. But the future these companies promised might finally be here.

[00:01:26] [SPEAKER_03] Morgan Stanley estimates about half of the American population will have access to a robo-taxi within three years. Our Imani Moise talked with Wall Street Journal reporter Sean McClain to check in on the state of the robo-taxi rollout.

[00:01:38] [SPEAKER_02] So unless you're in a few cities, mostly places with good weather, robo-taxis feel like unicorns. What's been taking so long for them to be rolled out across the country?

[00:01:47] [SPEAKER_04] It's a combination of something you hinted at and the reality of doing business in the United States. So today, robo-taxi regulations are handled by individual states and in some cases, individual cities. And so these companies have to navigate a complex set of regulations, local rules, individual traffic concerns, community concerns before they can deploy their vehicles. And there's different testing requirements and different regulatory requirements depending on where you want to operate.

[00:02:15] [SPEAKER_04] And the second part of it is a tech problem. These vehicles today are mostly operating in places like Austin, Texas, Houston, Dallas, San Francisco, L.A., Phoenix. Places that have good infrastructure and nice sunny weather most of the time. So these vehicles that rely on cameras, LIDAR, the technology has been operating in places where they can be on the road more days than not.

[00:02:42] [SPEAKER_02] But now, analysts are saying that we might be poised to see these cars in even more environments. What's different now?

[00:02:48] [SPEAKER_04] There's a couple of things. One, if you've been in some place like Austin or Phoenix or Los Angeles or San Francisco, robo-taxis are increasingly commonplace. I personally take a Waymo around the west side of L.A. quite often. It's very convenient. It feels very safe. There are hiccups, like getting lost in a parking lot. And there has been some sort of highly public incidents and accidents on the road.

[00:03:13] [SPEAKER_04] But the market and analysts feel that the technology is becoming more stable and people are becoming more comfortable with it. And that's giving the industry confidence to roll out into more places like Detroit, Minneapolis, even trying to tackle midtown Manhattan.

[00:03:29] [SPEAKER_02] So it's a bit of a horse race in the robo-taxi world right now. Can you give us a scouting report? Who's currently out front?

[00:03:35] [SPEAKER_04] It's currently a one-horse race. If we look at a map of where these cars are deployed, how many vehicles on the road, right now it's Waymo. There are a host of challengers, including Tesla with his robo-taxis and Uber, who's aggregating a bunch of different robo-taxi players into their network. And, you know, even startups like Zoox. All of these companies are starting to deploy vehicles or getting close to being able to deploy their vehicles.

[00:04:01] [SPEAKER_04] And I think that's why it feels like a moment of pressure building where these things are about to explode onto the roads.

[00:04:09] [SPEAKER_02] Some of those companies' robo-taxis are also unconventional vehicles. What challenges do they face?

[00:04:15] [SPEAKER_04] There are additional hurdles for companies like Tesla and Zoox who want to build a vehicle without a steering wheel or brake pedals or gas pedals. And that presents a challenge both from a technical and a safety concern standpoint, but also from a regulatory standpoint. The federal government sort of sets safety standards for vehicles. And one of the key requirements is that it have a steering wheel and pedals.

[00:04:40] [SPEAKER_04] And so they need to apply for a special exemption not only to test these vehicles on the road, but also to operate a ride-hailing service.

[00:04:49] [SPEAKER_03] That was our colleague Amani Moise talking with Wall Street Journal reporter Sean McClain. Have you taken a robo-taxi? What did you think? If you're a listener on Spotify, leave us a comment with your thoughts. Coming up, we're taking you inside the legal battle and federal courtroom that's become a showdown between many of the biggest names in tech. That's after the break.

[00:05:13] [SPEAKER_00] This podcast is brought to you by Atlassian Rovo. Tired of 10 different AI tools creating knowledge gaps? Rovo takes your team from AI novice to AI native by working where you already work, like Jira and Confluence, so your team stays aligned.

[00:05:32] [SPEAKER_03] The second week of the hotly anticipated trial between Elon Musk and OpenAI kicked off Monday. Musk alleges OpenAI took $38 million in donations when it was founded as a nonprofit, then used it to turn it into a for-profit company. The chat-sharp team maker says Musk was aware of the conversion plans and even supported them. Wall Street Journal finance and tech reporter Angel Aoyoung has been closely following the case and joins us to explain the latest. And before we get into it, a disclaimer.

[00:06:02] [SPEAKER_03] News Corp., the owner of the Wall Street Journal, has a content licensing partnership with OpenAI. Angel, thanks so much for joining us. Can you explain Musk's argument and what are his claims that he's making to the court?

[00:06:13] [SPEAKER_01] Sure. So Elon Musk is suing OpenAI and two of its co-founders, Sam Altman and Greg Brockman, for breach of charitable trust and unjust enrichment. And in terms of what he's asking the courts to do, it's a number of remedies.

[00:06:30] [SPEAKER_01] So they include removing Altman and Brockman from their leadership roles at OpenAI, up to $180 billion in damages to be transferred from the company's for-profit arm into its nonprofit parent. And he's also asking the courts to unwind a recent conversion that OpenAI did to a more traditional corporate governance structure.

[00:06:56] [SPEAKER_03] Has OpenAI filed any claims against Musk throughout this process?

[00:07:01] [SPEAKER_01] What OpenAI has said is that this is a way for Elon to slow down OpenAI's progress. The company has said that this is all just a ruse, a strategy for Elon to help his own AI company. So OpenAI has said that there is no merit to this lawsuit.

[00:07:23] [SPEAKER_01] And in fact, the company actually called this lawsuit the latest quote-unquote variant for Elon's efforts to disrupt OpenAI's progress.

[00:07:32] [SPEAKER_03] So how was the trial going? What were the biggest standout moments from the first week?

[00:07:37] [SPEAKER_01] There weren't too many surprises in the first week. The biggest surprise probably was the fact that Elon himself testified. I think the most interesting parts came out of cross-examination when OpenAI lawyers asked him a number of questions. Those interactions, it did get a little heated. Elon seemed very frustrated with the cross-examination. Surprising things that we learned actually were mostly about XAI, Elon's own AI company.

[00:08:07] [SPEAKER_01] He admitted that XAI is a very small company in comparison to the other AI labs. And one part of the trial that I thought was really interesting was that Elon, he started ranking the AI labs without prompting from any attorneys. And along the way, he slighted OpenAI. In his ranking, he put Anthropic as number one and OpenAI as number two.

[00:08:33] [SPEAKER_01] And he put XAI as the fifth biggest AI company. Something interesting that did happen over the weekend, though, was that there was a new filing from OpenAI. The company alleged that Elon had actually texted Greg Brockman, co-founder and current president of OpenAI, asking if they wanted to settle. And Greg Brockman, he suggested to Elon that both sides should drop their claims.

[00:09:02] [SPEAKER_01] Elon apparently responded with a threat. But he texted Greg, by the end of this week, you and Sam will be the most hated men in America. If you insist, so it will be.

[00:09:16] [SPEAKER_03] And yesterday saw OpenAI president Greg Brockman take the stand and more. Is there anything notable so far this week?

[00:09:22] [SPEAKER_01] One new piece of information that we have learned from Brockman's testimony is that he actually revealed on the witness stand that his stake in OpenAI is now worth close to $30 billion. And that's something that we did not know before. Pieces of evidence that have come up during the course of this lawsuit include some private diary entries that Greg Brockman actually wrote around 2017.

[00:09:49] [SPEAKER_01] And he wrote, we've been thinking that maybe we should just flip to a for profit. Making the money for us sounds great and all. And so this journal entry came out during Discovery. And Elon's attorneys have basically pointed to those journal entries as basically evidence that the OpenAI founders have been plotting against him all along and trying to start a for profit company.

[00:10:14] [SPEAKER_03] We've had a lot of big names testify so far, but there are still more to come this week. Can you give us a preview of who we can expect to see take the stand?

[00:10:22] [SPEAKER_01] Yes. So one witness who is expected to testify this week is a woman named Siobhan Zilis. And she was a former board member of OpenAI, but she is also the mother to four of Elon Musk's children. She's getting pulled into this trial because she was a board member at OpenAI. But she also did chief of staff like work for Elon during OpenAI's early years.

[00:10:51] [SPEAKER_01] Other people who are also expected to testify include Satya Nadella, CEO of Microsoft. Mira Maradi, who was formerly chief technology officer at OpenAI, but has now started her own competing AI company. As well as Ilya Setskiver, who is also a former OpenAI co-founder and is one of the leading AI scientists in the world.

[00:11:16] [SPEAKER_03] That was our reporter Angel Aoyoung. And that's it for Tech News Briefing. If you're a listener on Spotify, be sure to leave us a comment. Today's show was produced by Julie Chang with supervising producer Katie Ferguson. I'm Peter Ciampelli for The Wall Street Journal. We'll be back later this morning with TNB Tech Minute. Thanks for listening.

[00:11:39] [SPEAKER_00] This podcast is brought to you by Atlassian Rovo. Tired of 10 different AI tools creating knowledge gaps? Rovo takes your team from AI novice to AI native by working where you already work, like Jira and Confluence, so your team stays aligned.