>>> WELCOME BACK TO "SQUAWK BOX." IT IS THE STORY OF THE MORNING AND THE STORY POTENTIALLY OF THE YEAR DEPENDING HOW IT PLAYS OUT. ELON MUSK SUING OPENAI AND SAM ALTMAN, CLAIMING THEY BREACHED THE COMPANY'S FOUNDING DECISION. JOINING US SEE IT KOVAC. WE'VE BEEN GOING THROUGH THE LAWSUIT. >> WILD. >> IT IS WILD TO SEE. IT IS ALSO WILD BECAUSE WE WERE TALKING ABOUT WHAT THE OUTCOME OF THIS CASE COULD BE. IT'S UNIQUE IN THAT ELON MUSK IS ONE OF THE FEW PEOPLE THAT HAS STANDING TO BRING A CASE LIKE THIS. YOU HAVE TO THINK ABOUT WHAT THE, QUOTE, UNQUOTE DAMAGES ARE IF YOU ARE A JUDGE. HE IS SEEKING TO OPEN UP OPENAI SO THAT IT IS EFFECTIVELY TRULY AN OPEN SOURCE SITUATION. >> AND TO STOP MICROSOFT FROM USING IT. >> AND TO STOP MICROSOFT FROM USING IT. THE QUESTION IS WHETHER A JUDGE WOULD STOP THAT OR A JUDGE WOULD SAY, WE'LL GIVE YOU BACK YOUR $50 MILLION INITIALLY BECAUSE THOSE ARE THE DAMAGES TO YOU PERSONALLY. BUT IT ALSO MEANS WE COULD GET REAL DISCOVERY IN THE CASE ABOUT ALL OF THE THINGS THAT HAVE TRANSPIRED AND HOW OPENAI HAS OPERATED. >> HE SAYS -- IN THE LAWSUIT THAT ONLY OPENAI KNOWS WHAT'S IN THIS CHATGPT 4. THEY SUSPECT MICROSOFT DOES, TOO. >> WE'VE BEEN TALKING ABOUT IN A.I., OPEN SOURCE AND CLOSED SOURCE. YOU HAVE THAT EUROPEAN COMPANY WHO ALSO RAISED MONEY FOR MICROSOFT, FACEBOOK IS OPEN SOURCE, YOU HAVE GOOGLE AND OPENAI AS CLOSED SOURCE, YOU CAN'T TELL. ONE THING THAT STUCK OUT TO ME IS PART OF THE CASE AGAINST OPENAI, THE ARGUMENT THAT MUSK IS LAYING OUT IS THEY'VE ACHIEVED WHAT'S CALLED ARTIFICIAL GENERAL INTELLIGENCE, AGI, IS WHAT -- WHAT THE ACRONYM IS FOR. THEY'RE ALLEGING CHATGPT 4 HAS ALREADY ACHIEVED THAT. IF YOU TALK TO THE FOLKS AT MICROSOFT, THEY SAY, NOWHERE CLOSE TO AGI. SO A BIG CHUNK OF THE CASE -- >> IT RESTS ON THAT? >> THAT'S WHAT IT SOUNDS LIKE. WE BELIEVE, SOMETHING TO THAT EFFECT, BASED ON OUR OUTSIDE VIEW, THEY'VE ALREADY ACHOOEED THIS MILESTONE OF ARTIFICIAL GENERAL INTELLIGENCE THEREBY NEGATING THE DEAL BECAUSE THEIR DEAL SAYS ONCE OPENAI ACHIEVES AGI, THEY CAN'T USE IT. >> I READ THE CASE DIFFERENTLY. I READ THAT -- BUT I DON'T BELIEVE THE WHOLE CASE RESTS ON IT. >> IT DOESN'T REST -- >> BUT IT'S A PROBLEM. IT'S A COMPONENT PART OF THE CASE. I THINK THE OTHER ISSUES ARE -- BECAUSE OTHERWISE IF YOU WERE A JUDGE, YOU COULD RULE AGAINST THIS CASE IN ABOUT TEN SECONDS AND SAY THERE'S NO AGI. IF YOU LOOKED AT HOW THEY DID IT, THEY SEPARATED THE ISSUES SO THAT IS SORT OF -- >> IT'S THE CONTRACT. IT'S BREACH OF -- IT'S BREACH OF CONTRACT. >> AND THE CONTRACT IS THE FOUNDING AGREEMENT THAT MUSK AND ALTMAN SAT DOWN AND AGREED TO. >> THEY HAVE TO PROVE -- WE KNOW HOW THE STRUCTURE GOT CHANGED. OPENAI WOULD TELL YOU THE WAY WE HAVE IT STRUCTURED TODAY, WE'RE STILL A NONPROFIT. WE JUST HAVE THIS OTHER DIVISION HERE THEY CALL CAPPED PROFIT. WHAT THAT MEANS, WE'VE NEVER QUITE UNDERSTOOD. THAT SEEMS TO BE THE DIVISION THEY'RE GOING AFTER AND SAYING THIS IS EFFECTIVELY BECOMING THE R&D VERSION -- OR SITUATION FOR MICROSOFT. >> THE BIGGER QUESTION I HAVE, IF YOU'RE OPENAI AND MICROSOFT, YOU ACTUALLY WANT TO SETTLE THIS CASE? THE TRUTH IS -- I'M OF THE VIEW THIS CASE IS ALL ABOUT DISCOVERY. THIS CASE HAS NOTHING TO DO WITH ANYTHING ELSE OTHER THAN -- >> THEY'RE NOT ASKING FOR MONEY. >> THEREFORE, IF YOU DON'T WANT TO PARTICIPATE IN THE DISCOVERY PROCESS -- >> WRITE A CHECK. >> THE QUESTION IS WHAT KIND OF CHECK COULD YOU WRITE? IS THERE A CHECK YOU COULD WRIGHT? >> OR DOES THE RICHEST GUY IN THE WORLD WANT A CHECK? >> I DON'T THINK HE DOES. THE QUESTION IS, HOW DOES THIS PLAY OUT? >> LET'S ZOOM BACK, WHAT'S HAPPENING IN MUSK'S X WORLD. HE'S TRYING TO CREATE XAI, A COMPETITOR TO OPENAI, A CHATBOT CALLED GROK, UNWOKE OR SOMETHING. FINE. IT HASN'T TAKEN OFF. HE'S TRYING TO RAISE MONEY. HE'S UNSUCCESSFULLY -- >> YOU'RE IN THE CAMP OF YOU THINK THIS IS NOT JUST SOUR GRAPES, YOU THINK THIS IS A CYNICAL PLAY TO COMPETE IN A BETTER WAY -- >> YES, THAT WAS MY INITIAL READ. HERE I AM, ELON MUSK, THE RICHEST GUY IN THE WORLD, THE HOTTEST STARTUP IN THE WORLD IS OPENAI -- >> I'M GOING TO TAKE THE OTHER SIDE OF THAT BET, WHICH IS I THINK HE FUNDAMENTALLY AT A VISCERAL AND PERSONAL LEVEL FEELS PHILOSOPHICALLY FRUSTRATED WITH WHAT HAPPENED IN A WAY THAT -- BY THE WAY, MAYBE RIGHT, MAYBE WRONG, MEANING HE SHOULDN'T FEEL THE WAY HE DOES, BUT I DON'T DISBELIEVE HE FEELS THE WAY HE DOES. >> FEELINGS ARE GREAT. DO FEELINGS WORK IN A CASE LIKE THIS OR COURT? >> IN THIS CASE THEY MIGHT ACTUALLY. >> WHAT COULD HE POSSIBLY GET OUT OF -- IN THIS DISCOVERY? WHAT IS HE GOING -- WHAT ADVANTAGE DOES HE GET OUT OF THAT OTHER THAN MAYBE NUKING A COMPETITOR SO HIS PLATFORM COULD GET BETTER? >> WELL, THAT'S THE ISSUE WHERE I'M GOING. I'M NOT SURE IT'S ABOUT NUKING THE COMPETITOR AS A COMPETITOR. I THINK IT'S ABOUT NUKING THE COMPANY THAT HE FEELS ON A VERY PERSONAL BASIS THAT HE EFFECTIVELY CREATED. THIS IS LIKE -- >> WELL, HE'S BEEN TAKING CREDIT SINCE IT BECAME REALLY POPULAR, HE'S BEEN TAKING CREDIT FOR IT. >> YOU'RE SAYING HE SHOULDN'T -- >> NO, NO, HE WAS FOUNDING -- >> YOU SAY IT IN SUCH A UNIQUE WAY. THE REASON I'M MAKING THE POINT, IT'S LITERALLY -- I TRY TO PUT MYSELF IN OTHER PEOPLE'S SHOES TO MEET THEM WHERE THEY ARE. HE'S SOMEBODY WHO LOOKS AT THIS AND SAYS, THIS IS MY BABY. I HELPED BIRTH THIS BABY. >> BUT HE LEFT, TOO. >> WELL, HE LEFT UNDER VERY UNIQUE CIRCUMSTANCES. BY THE WAY, AGAINST THE NARRATIVE OR AGAINST HIM, YOU COULD ARGUE ONE OF THE REASONS HE LEFT IS BECAUSE THERE WAS AN ARGUMENT, A PERIOD OF TIME WHERE HE WAS EVEN TRYING TO TURN OPENAI HIMSELF INTO A COMMERCIAL ENTITY. THAT'S A SEPARATE ARGUMENT ABOUT THIS. BUT I DO THINK IT'S A VERY PERSONAL ISSUE RATHER THAN A COMPETITIVE ONE. >> THAT TOO FEELS SOUR GRAPESISH, RIGHT? >> DOESN'T MATTER. IF HE CONTRIBUTED -- ACCORDING TO THIS COMPLAINT HE CONTRIBUTED $44 MILLION TO OPENAI BETWEEN -- >> THAT'S NOT NOTHING. >> THAT'S NOT NOTHING. >> THE QUESTION COMES DOWN TO, DOES THE FOUNDING AGREEMENT STAND OR NOT? IF THEY VEE LATED THE FOUNDING AGREEMENT, I THINK THAT'S -- >> HE PUTS MICROSOFT IN A REALLY TOUGH POSITION IF THIS GETS UNWOUND BECAUSE MICROSOFT IS SO HEAVILY DEPENDENT -- I DON'T KNOW IF WE HAVE ANY MICROSOFT -- >> IT MAY GET UNWOUND. MAYBE NOTHING HAPPENS BUT IT BECOMES ONE OF THE GREAT DISTRACTIONS FOR OPENAI, FOR ALL OF THE CLIENTS WHO ARE THINKING, DO I WANT TO BE PART OF THIS OR THAT, DO I WANT -- >> IT'S GOOD FOR GOOGLE. >> IT MAY BE GOOD FOR GOOGLE, IT MAY BE GOOD FOR A WHOLE NUMBER OF OTHER A.I. COMPANIES, MAYBE GOOD FOR EVEN SOME OF THE STUFF AMAZON I
