Nadella says Musk by no means requested him about Microsoft offers

Microsoft CEO Satya Nadella took the stand within the Musk v. Altman trial on Monday, the place he testified that Elon Musk by no means contacted him with issues that Microsoft’s investments in OpenAI had been in violation of any particular phrases or commitments.

Nadella, sporting a navy swimsuit with a blue tie, started his testimony in federal court docket in Oakland, California, by answering questions in regards to the early days of Microsoft’s strategic partnership with OpenAI. He mentioned he was “very proud” that Microsoft took the danger to put money into OpenAI when “nobody else was prepared” to wager on the fledgling lab.

In 2024, Musk sued OpenAI, its CEO, Sam Altman, and its president, Greg Brockman, alleging that they went again on their vow to guard the synthetic intelligence firm’s nonprofit construction and comply with its charitable mission. Microsoft is known as as a defendant within the lawsuit, as Musk accuses the corporate of aiding and abetting OpenAI’s purported breach of charitable belief. 

Microsoft has been certainly one of OpenAI’s main backers since 2019, years earlier than the corporate rocketed into the mainstream with the launch of its ChatGPT chatbot in late 2022. Microsoft’s greater than $13 billion value of investments in OpenAI, together with a $1 billion funding in 2019, a $2 billion funding in 2021 and $10 billion in 2023, have come up repeatedly over the course of the trial. 

Musk, who testified late final month, mentioned Microsoft’s $10 billion funding was the key tipping level that made him consider OpenAI was violating its nonprofit mission. He testified that the size of the funding bothered him, and it prompted him to open a authorized investigation into OpenAI. 

“I used to be involved they had been actually making an attempt to steal the charity,” Musk mentioned from the stand.

Nadella mentioned from the stand that he didn’t consider Microsoft’s investments in OpenAI had been donations, and that there was a transparent industrial ingredient to their partnership from the outset.

He mentioned throughout the partnership’s early years, Microsoft gave OpenAI sharp reductions on computing sources, and Microsoft believed it might reap advertising advantages from doing so.

Throughout a separate video deposition that was performed on Monday morning, Michael Wetter, a company growth govt at Microsoft, mentioned the corporate has acknowledged roughly $9.5 billion in income up to now by means of its partnership with OpenAI.

Musk co-founded OpenAI alongside Altman, Brockman and a handful of different executives and researchers in 2015. After quite a lot of disagreements about OpenAI’s course, together with a failed effort to affix it along with his automaker Tesla, Musk left the OpenAI board in 2018. He went on to launch a competing AI startup, xAI, which he merged with SpaceX earlier this yr. 

OpenAI established a for-profit subsidiary within the months following Musk’s departure, which allowed the corporate to boost outdoors funding extra simply. Traders, together with Microsoft, have since poured billions of {dollars} into OpenAI’s for-profit arm, and the corporate’s valuation has swelled to greater than $850 billion. 

In October, OpenAI accomplished a recapitalization that cemented its construction as a nonprofit with an fairness stake in its for-profit enterprise. As a part of that announcement, Microsoft disclosed that it held a roughly 27% stake in OpenAI’s for-profit unit that was valued at round $135 billion.

The connection between OpenAI and Microsoft has proven indicators of pressure in latest months, whilst each firms proceed to tout it as strategic and core to their companies. Late final month, the identical day that jury choice kicked off in Musk v. Altman, the businesses introduced a revamped partnership settlement that permits OpenAI to cap income share funds and serve clients throughout any cloud supplier.

OpenAI mentioned in a launch that the settlement aimed to “simplify our partnership and the way in which we work collectively.”

Musk testified that he’s not solely towards OpenAI having a for-profit unit, however he mentioned it grew to become “the tail wagging the canine.” He repeatedly accused Altman and Brockman of enriching themselves from a charity whereas additionally reaping the constructive associations that come from operating a nonprofit.

“Microsoft has their very own motivations, and that may be completely different from the motivations of the charity,” Musk mentioned from the stand. “All due respect to Microsoft, do you really need Microsoft controlling digital superintelligence?”

Throughout a videotaped deposition proven in court docket final week, former OpenAI director Tasha McCauley recalled a dialogue with Nadella and her fellow board members after the 2023 determination to dismiss Altman as OpenAI’s CEO.

“To the very best of my recollection, Satya needed to revive issues to as they’d been,” McCauley mentioned. The board members did not suppose that was the precise transfer, she mentioned.

WATCH: The Musk vs. OpenAI trial is underway — right here’s the place issues stand