E169: Elon sues OpenAI, Apple's decline, TikTok ban, Bitcoin $100K?, Science corner: Microplastics

**Jason Calacanis** (0:00)
Chamath, who are you giggling with? Are you with your kids? What's going on here? You're making GoogleFace.

**Chamath Palihapitiya** (0:05)
I got a message from that. I don't know. Is it Hellmuth? No, no. I got a message from that. She's so funny. So I was like, blah, blah, blah. She did a Uranus joke into my chat and I lost it.

**Jason Calacanis** (0:20)
It is like Friedberg always says, your anus is right there at the edge of the universe.

**Chamath Palihapitiya** (0:26)
She's like, are you hungry? I could eat a Uranus.

**Jason Calacanis** (0:30)
Oh no, we could go to a great restaurant, Uranus.

**Chamath Palihapitiya** (0:33)
They have served a great meals there.

**Jason Calacanis** (0:36)
They have a great chocolate lava cake.
All right, everybody. Welcome back to your favorite podcast of all time. It's episode 169 of All-In with me again, the chairman dictator, Chamath Palihapitiya, David Friedberg, your Sultan of Science and the Rain Man. Yeah, definitely David Sacks has his Montclair hat back again. I guess they're back in stock. How are we doing boys? Welcome back to the show. Let's get to the docket here. Issue one, Elon has sued OpenAI, begun the meme wars have. After we finished the recording last week, the memes are incredible. After we finished recording last week, Elon sued Sam Waltman, Greg Brockman, and the OpenAI organization. He's suing for breach of contract, fiduciary duty and unfair competition. And his argument is basically, OpenAI started as an open source nonprofit. As you know, he gave them something like 50 or 75 million of what both those numbers quoted. And then of course, everybody knows OpenAI turned into closed AI. They became a closed source for-profit venture after the tech was deployed. This enabled them obviously to benefit from tax, non-profit tax breaks while building the tech, but they now have two corporate entities. There's this nonprofit called OpenAI. There's a for-profit, it's called OpenAI Global LLC. That was created in 2019 And there's all this funky relationship between the two. We'll get into that because it's kind of interesting actually. Elon said that if OpenAI is allowed to do this, then it should be the standard for every company going forward. That's an interesting point. You could start by donating money to a non-profit and then make a for-profit. Seems pretty capital efficient. So what does Elon want to get out of this according to the lawsuit? He wants OpenAI to open source their models. By the way, that's what Facebook and Apple are doing right now. So that seems more than reasonable since that's how the company was formed. And he wants to make sure that shareholders receive no financial benefit from OpenAI. And we can get more into a bunch of the OpenAI non-profit status and their structure. It's super convoluted. But I want to just get your initial reaction, Sacks.

**David Sacks** (2:58)
I haven't read the legal filings, Jason. My knowledge of the case is just coming from following what's on Twitter. And the last time I commented on one of Elon's lawsuits on this pod, I ended up in six hours of deposition. So remember, that was the whole Twitter lawsuit. In any event, my understanding of the case from the tweets that are flying back and forth is I think Elon is making two points. One is that when OpenAI was set up, it was set up to be a non-profit and to promote AI as an open-source technology that everyone could benefit from, and no one large tech company would control. In that case, Elon was primarily concerned about Google. I think now he's more concerned about Microsoft. Nonetheless, the idea was that this would be open-source. So I think point number one is Elon feels like the rug was pulled out from under him after he donated 40-something million dollars to this. They completely changed what it was gonna be. And I think he's used the word swindled before. He feels like he was cheated. And I think usually when there's a lawsuit like this, it's usually because somebody does feel fundamentally cheated by what happened. So I think that's the first point. The second is that I think that Elon's making is, well, wait a second, if you can start a company as a non-profit using pre-tax dollars, and then all of a sudden convert to for-profit, then why wouldn't everybody do this in order to circumvent paying taxes? And I think that's another, I'd say, valid and interesting point that he's made. Now, OpenAI has responded to this by publishing some of Elon's emails to them, and they think that they have a smoking gun here because apparently Elon told them they need to raise far more money in order to have a chance of taking on Google slash DeepMind. I just don't know whether that's the smoking gun they claim it is, but that's basically what they're putting out there. Then to add fuel to the fire, you've got VCs coming over the top, debating different aspects of this. You've got Vinod defending OpenAI. He was the first VC investor in it. He's been out there attacking Elon, and then I think Mark Andreessen is responding to Vinod. I don't know if he's exactly defending Elon. Anyway, it's turned into a whole maelstrom on X, and then everyone else is starting to put out a whole bunch of crazy memes. So I don't know who's going to win this case in court, but the memes are definitely lit. And maybe the funniest one is that Elon has said that if OpenAI will simply change their name to ClosedAI, he'll drop the lawsuit.