It’s about whether a company can change its mission
Elon Musk and Sam Altman They have stood before a court in Oakland to settle the future of OpenAIwith a lawsuit claiming more than $130 billion and calling for the removal of Sam Altman as CEO. The hearing started this Tuesday with opening statements that have revealed the real dimension of the case: it is not just a fight between two billionaires, but a very basic question that still does not have a clear answer. Why is it important. The underlying question is not whether Musk, as it is colloquially said, ‘was messed up’. It is whether an organization founded as an NGO can pivot towards profit after having attracted donations, talent and credibility under another model. If the answer is ‘no’ (or if it can at least be judicially challenged), there are a few technology companies in a similar situation: Mozilla, Anthropic or Wikipedia / Wikimedia Foundation live in similar realities. The precedent that this trial sets may be a blow to other groups. The context: OpenAI was born in 2015 with a mission: to develop AI for the benefit of humanity, as a wise man said“non-profit”. Musk contributed about $38 million in his first years. In 2019, the company launched a for-profit subsidiary to raise capital at scale. In 2023, it signed a 10 billion agreement with Microsoft that, according to the accusation, was the point of no return: from then on, OpenAI no longer operated for humanity but for its shareholders. Today, the lucrative subsidiary is valued at $852 billion and could go public before the end of 2026, although There are some cracks in that plan.. Between the lines. Musk’s legal thesis depends on proving that there was fraud at the time of the donation, not simply that he doesn’t like where the company has gone. According to Sam Brunson, professor of nonprofit law at Loyola University in Chicago, cited by Fortunethe general principle of law is that whoever donates to an organization has given that money and has no recourse if they later do not like its decisions. The only way out is to prove that there was fraud, that they lied to you at the time of donating. And that proof is very difficult to obtain. What comes closest to that proof are the private notes of Greg Brockman, co-founder of OpenAI. In September 2017, Brockman wrote that this was “the only opportunity to get out from under Elon” and that accepting his conditions would destroy his decision-making capacity and his economic side. After a meeting in November of that year in which Musk was assured that OpenAI would remain an NGO, Brockman noted that if they converted the company to a for-profit entity three months later, “it would have been a lie.” The judge who sent the case to trial cited these notes directly in his January ruling. Yes, but. The fact that there are compromising notes does not mean that Musk’s legal theory is solid. The original NGO still exists. Its technology was licensed to the for-profit subsidiary, but the nonprofit foundation maintains nominal control of the company and retains the economic appreciation of that subsidiary. NGOs can generate profits, they simply cannot distribute them among shareholders. If OpenAI did not make an explicit and documented promise to never create a for-profit subsidiary, the fraud argument has very little meaning. Most of the experts consulted by the Anglo-Saxon press these days believe that Musk has little chance of winning in the responsibility phase. Marking agenda. On Sunday, less than 48 hours before the trial began, OpenAI published its new framework of five principles for AGI: democratization, empowerment, universal prosperity, resilience and adaptability. The 2018 document mentioned AGI twelve times. The new one, only two. He timing It is no coincidence: Altman publishes a manifesto that portrays him as the guardian responsible for the development of AI just when a court is going to judge whether he betrayed the company’s original mission or not. The big question. The trial will last, in principle, about three weeks. But the question it raises goes beyond the verdict: can a company that started as a non-profit organization (attracting donations, talent and legitimacy under that banner) freely pivot towards profit without anyone having the right to complain? If the answer ends up being ‘yes’, without much nuance, there will be something wrong. Not because Musk is right about everything, but because the underlying argument makes sense: if you benefit from tax favors and an altruistic reputation to boot, then you can’t pivot just like that without distorting competition. The question does not have an easy answer. That a jury in Oakland is answering it says a lot about how much the law lacks to keep up with the speed with which the technology industry moves. In Xataka | OpenAI is already worth $852 billion: never has a company been so valuable while burning so much money Featured image | Xataka