The Full Founding Story of OpenAI, Beginning to Lawsuit

learn about the crazy fascinating history of OpenAI and what this lawsuit means for the future of AI

Weā€™re So Back

The newsletter you know and love (or maybe forgot about, but thatā€™s ok) is back. What was formerly ā€œThe Week in GenAIā€œ and prior to that ā€œThe Week in ChatGPTā€, is now rebranding once again to ā€œUncharted AIā€œ. Weā€™ll see if this will be the last rebrand and if history is any judge, probably not.

The new newsletter format will be the biggest piece of news in the world of AI broken down by me, your handsome newsletter writer. Then, every week, we discuss the impact AI is having and will continue to have in new industries. Every week will be a different industry. We keep going until we run out of industries or we run out of AI. Letā€™s goooooo.

Big Story Alert šŸšØ

The Elon OpenAI Lawsuit

You might be thinking, I already know about this one! Itā€™s been all over the news for the past two weeks. That is completely true. But itā€™s important to know the whole story of how did we get here, to this moment in time, and what are the stakes of this lawsuit. So buckle up as I retell you the whole story of what went down between good olā€™ Elon and OpenAI from start to finish (as told by the mfm podcast).

The founding of open AI goes back to a failed buyout of Deepmind, googleā€™s AI powerhouse. The same Deepmind that merged with Google Brain and has been responsible for Googleā€™s flasghip AI products like Gemini and Bard.

Before Deepmind was owned by Google they were a nice little startup in the UK. But around 2014-2015, Google came sniffing around to acquire itself a nice AI startup. Around this same time Elon Musk was getting very concerned about AI safety. He went to Larry Page and other AI executives and he was not impressed by the measures they were taking to ensure responsible development of AI. 

So he approached a friend from the PayPal mafia and attempted a buyout of Deepmind before Google acquired them. The going price was half a billion and Elon was unable to piece together a deal in time and Deepmind went to Google. Tough nuggets Elon.

Because of this failed buyout and his very valid concerns about AI safety, when Sam Altman, chairman of YC at the time, approached Elon with the idea to make an open source, nonprofit AI company, Elon was immediately on board. He replied to Samā€™s email ā€œagree with all of the aboveā€. And so with a 20 million dollar down payment, OpenAI, a name actually coined by Elon, came into this world. 

OpenAI was originally a YC company actually, procuring funding from Sam Altman, Greg Brockman, Elon Musk, Jessica Livingston, Peter Thiel, Microsoft, Amazon Web Services, Infosys, and YC Research.

Early on, the problem that OpenAI immediately ran into was that Deepmind had a monopoly on the best minds in AI. These AI experts being paid in the millions in salary every year and YC stock wasnā€™t going to be enough to get them on board. If OpenAI was going to stand a chance, Sam needed more of this talent and Elon bankrolled his acquisition of this top tier talent by putting in tens of millions more dollars. When itā€™s all said and done, Elon contributed a tidy sum of 44 million to back OpenAI both in its funding and hiring spree. Elon was also instrumental in the acquisition of OpenAIā€™s chief deep learning scientist Ilya, a name you might recognize as one of the chief people who got Sam Altman removed as CEO of OpenAI temporarily back in November (nows Samā€™s back and on the board this time lol). Elon poached him from DeepMind, further souring his already strained relationship with Larry Page.

Given Elonā€™s substantial investment into OpenAI and the founding agreement he had with Sam, it came as quite a surprise to him when in 2018, OpenAI transitioned to a for-profit company. Ever since this move by OpenAI, Elon has been a vocal critic of what went down. And so after waiting almost 6 years, he has decided its time to take legal action, leading us to the current point in time.

Now, as for the stakes of this lawsuit here is the general state of things:

The lawsuit claims that OpenAI shifted from its original mission of developing artificial intelligence for the benefit of humanity to focusing on profit, particularly through partnerships with Microsoft. Musk asserts that OpenAI's release of the powerful language model GPT-4 in 2023 deviated from the agreed-upon goal of working on artificial general intelligence (AGI) to benefit humanity. Musk is seeking to compel OpenAI to make its research and technology, including GPT-4, available to the public. Additionally, Musk's lawsuit contends that GPT-4 and a new technology called Q* should be considered AGI. The legal case also involves allegations related to OpenAI's creation of a for-profit arm and licensing technology to Microsoft without proper transparency. Despite Musk's claims, legal experts have expressed doubts about the strength of the lawsuit, highlighting challenges in proving the existence and terms of any contract between Musk and OpenAI. And they are right for the most part that there seems to be no such contract beyond the unspoken agreement present in their early emails.

Basically, the strongest argument for Elonā€™s case can be summed up as follows: how is it you can create a non-profit (tax-exempt), open source company that takes millions of dollars from donors and then becomes a for-profit company owned by Microsoft, the biggest company in the world. If that were possible to do, then why would that not be the default for every startup. Either itā€™s illegal or everybody should be doing it. Thatā€™s a pretty strong argument in my opinion and whatever the ruling, there will be some serious ripple effects either way.

The first hearing is scheduled to take place April 1st. Until then, my friends, we wait with baited breath.

Industry Deep Dive Time šŸŠā€ā™‚ļø

Jk

For this week, Iā€™d like you to reply to this email with which industries youā€™d be most interested to explore in future editions. We will be delving into how AI is changing and will continue to change these industries and make certain predictions about what the end state of affairs might look like. So please reply so I can get an idea of where the industry interest lies amongst the readership.

Also, Iā€™ll use this freebie to selfishly promote a ProductHunt launch for a product Iā€™ve been working on for a while now! Itā€™s an AI personal shopping assistant that seriously simplifies online shopping by doing research on your behalf and giving you personalization way beyond what can you can get on marketplaces like Amazon or Temu. Please, if you have a second, click this link below and give me an upvote please! ā¤ļø

Parting is Such Sweet Sorrow

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