Vanity Fair New Establishment Summit - Day 1

Elon Musk and Sam Altman in 2015. (Michael Kovac/Getty Images)

MUSK BEEF

OpenAI: Elon literally wanted us to be for-profit!

OpenAI brings receipts showing Musk wanted them to be for-profit before he sued them for doing just that.

12/13/24 4:30PM

“You can’t sue your way to AGI.”

That is the pointed message from OpenAI to cofounder Elon Musk that appears in a lengthy blog post today on the company’s website, the second such post to publicly push back on Musk’s legal attacks on the company.

In a post titled “Elon Musk wanted an OpenAI for-profit” the company makes the case that Musk, who has filed multiple lawsuits to stop OpenAI from altering its core structure to a for-profit business, actually wanted that structure in the first place and even filed the paperwork to do that.

Currently, the company is structured as primary nonprofit entity, with a smaller for-profit arm.

OpenAI lays out a timeline to the key events in the feud since OpenAI’s founding in 2015. The post showed the receipts in the form of text-message threads detailing Musk meetings as well as redacted emails to and from Musk that all appear to show that Musk was indeed in favor of the for-profit approach to raise the huge amounts of capital needed to build the computing infrastructure and produce the first tangible results of their efforts.

According to a reading of OpenAI’s version of events, Musk seemed to be supportive and on-board until September 2017, when the founders were discussing the equity allocation for the for-profit arm. According to the post, Musk wanted 50% to 60% ownership of the company and to be CEO.

“On one call, Elon told us he didn’t care about equity personally but just needed to accumulate $80B for a city on Mars.”

After detailing his preferred terms for the new for-profit entity, Musk told founders Ilya Sutskever and Greg Brockman in an email:

“I’ve been really impressed with the quality of discussion with you guys on the equity and board stuff. I have a really good feeling about this. “

Two days later, Musk’s agents registered a public-benefit corporation named “Open Artificial Intelligence Technologies, Inc.” in Delaware.

Sutskever responded with the OpenAI team’s concerns in an email to Musk titled “Honest Thoughts,” which did not land well with Musk. Sutskever wrote:

“The goal of OpenAI is to make the future good and to avoid an AGI dictatorship. You are concerned that Demis [presumably Nobel Prize recipient and Google DeepMind CEO Demis Hassabis] could create an AGI dictatorship. So do we. So it is a bad idea to create a structure where you could become a dictator if you chose to, especially given that we can create some other structure that avoids this possibility.”

That appeared to trigger the famously mercurial Musk, as evidenced by his curt reply:

“Guys, I’ve had enough. This is the final straw.
Either go do something on your own or continue with OpenAI as a nonprofit. I will no longer fund OpenAI until you have made a firm commitment to stay or I’m just being a fool who is essentially providing free funding for you to create a startup.
Discussions are over.”

The post goes on to detail more examples of Musk supporting the for-profit model and urging the company to raise vast sums of capital as quickly as possible. In January 2018, Musk suggested rolling OpenAI into publicly traded Tesla, offering the company a $1 billion budget, which Altman and the others were opposed to.

While things appeared chilly heading into 2018, Musk still communicated with Sam Altman and the others, casting doubt on their chosen path forward. Musk wrote to the OpenAI team:

“My probability assessment of OpenAI being relevant to DeepMind/Google without a dramatic change in execution and resources is 0%. Not 1%. I wish it were otherwise.
Even raising several hundred million won’t be enough. This needs billions per year immediately or forget it.”

After Musk saw OpenAI’s fundraising achieve a valuation of $20 billion, Musk was angry. In a text to Altman, Musk said that he provided the bulk of the seed funding for OpenAI and was left without any equity (which OpenAI says he declined).

“This is a bait and switch,” Musk wrote.

A few months later, Musk founded his OpenAI competitor, xAI, and cosigned a letter calling for an industry-wide pause on AI development.

Jon Keegan25m

Report: Hollywood talent agencies were blindsided by OpenAI’s Sora and its hazy opt-out scheme

Just before OpenAI unleashed its Sora app on the world, reports emerged that the company was taking a novel approach to dealing with intellectual property rights – rights owners would have to opt-out of the service to prevent their likeness or characters from being featured in objectionable or disturbing ways.

Fast-forward a few weeks: Sora sits atop the app store leaderboards, and new details are emerging about how OpenAI engaged with Hollywood talent agencies seeking to protect their clients’ rights. According to a report from The Hollywood Reporter, the agency heads felt blindsided by the company’s ask forgiveness, rather than get permission, approach.

One talent agency executive said OpenAI was “purposely misleading,” in heated discussions about the use of the agency clients’ likenesses, according to the report. OpenAI executives reportedly told talent agency heads that individual clients would have to individually opt-out of the platform, but did not yet have a streamlined process or dedicated staff to process the requests.

Days after Sora’s launch, OpenAI CEO Sam Altman wrote on his blog that the company would “give rightsholders more granular control over generation of characters, similar to the opt-in model for likeness but with additional controls.”

But that hasn’t stopped calls from groups like the Motion Picture Association for OpenAI to respect copyright law, and to “prevent infringement” of rights owners’ intellectual property.

How Sam Altman Played Hollywood

But that hasn’t stopped calls from groups like the Motion Picture Association for OpenAI to respect copyright law, and to “prevent infringement” of rights owners’ intellectual property.

Jon Keegan5h

Apple suffers another AI setback as it loses key AI search leader to Meta

Apple’s efforts to get back into the AI race took another hit with news from Bloomberg that the head of AI search for a revamped Siri is leaving for Meta.

According to the report, Ke Yang took charge of Apple’s “Answers, Knowledge and Information” team just weeks ago. The team is reportedly targeting a March 2026 launch for the new version of Siri, which will feature the ability to search the web for answers to user queries.

Yang’s exit is the latest in a series of executive departures that have plagued Apple, and continues Meta’s hiring spree across the tech industry to lure top AI talent to the company with reported eye-popping nine-figure pay packages.

Bloomberg reports that roughly a dozen members of the Apple Foundation Models team have also departed recently, many joining Meta’s “superintelligence” team.

Apple’s Head of ChatGPT-Like AI Search Effort to Leave for Meta

Bloomberg reports that roughly a dozen members of the Apple Foundation Models team have also departed recently, many joining Meta’s “superintelligence” team.

Rani Molla5h

DoorDash jumps on news it’s partnering with Google’s Waymo for Phoenix deliveries

DoorDash is up more than 4% in early trading following news that it has partnered with autonomous car company Waymo to help deliver food and other goods in Phoenix. The service, which is meant to keep Waymos busy when they’re not in use as taxis, is currently in testing and is slated to roll out publicly later this year.

The Google-owned driverless car company has had a similar partnership with Uber in Phoenix since 2024. Waymo currently operates taxi services in five US cities, including Phoenix, with plans to expand to six more next year.

Driverless Waymos Set to Deliver DoorDash Orders in Phoenix

Jon Keegan6h

Report: Anthropic is catching up to OpenAI, on track for $9 billion annual run rate by the end of 2025

Strong demand for its enterprise AI tools like Claude Code has pushed Anthropic’s annual revenue run rate to $7 billion this month, according to a report from Reuters, with the Amazon-backed company on track to hit $9 billion ARR by the end of 2025.

The company was targeting a $5 billion annual run rate as recently as September.

The acceleration of revenue is helping Anthropic catch up to its larger rival OpenAI. Recently, OpenAI told its investors that the company has a $13 billion annual run rate target, according to The Information.

According to the report, things are picking up so fast for Anthropic that it is nearly tripling its annual revenue targets for 2026 to as much as $26 billion.

Anthropic recently raised an series F round of $13 billion, giving the startup a valuation of $183 billion.

Exclusive: Anthropic aims to nearly triple annualized revenue in 2026, sources say

According to the report, things are picking up so fast for Anthropic that it is nearly tripling its annual revenue targets for 2026 to as much as $26 billion.

Anthropic recently raised an series F round of $13 billion, giving the startup a valuation of $183 billion.

Rani Molla6h

Microsoft is moving most of its production out of China

Microsoft plans to shift the production of the majority of its new hardware, including Surface laptops and data center servers, outside China potentially by early next year, Nikkei Asia reports. It’s the latest effort by Microsoft and other American tech companies, including Amazon, Google, and Apple, to shed some of their dependence on China amid ongoing geopolitical tensions between Washington and Beijing.

A source told Nikkei that Microsoft has asked that at least 80% of the bill of materials for servers, which includes parts, components, and assembly, come from outside China.

Microsoft aims to make most new products outside China from 2026: sources