Hello, and welcome to TechScape. I’m your host, Blake Montgomery, US tech editor at The Guardian, writing to you from sunny Mountain View, California, where I’ll be attending Google’s annual developer conference, I/O, when you read this. Stay tuned next week for a dispatch from the heart of the AI boom.
What’s next for OpenAI?
On Monday morning, a jury in Oakland, California handed a resounding victory to Sam Altman and OpenAI in their long, bitter courtroom battle with Elon Musk.
The federal jury found Altman, OpenAI and its president, Greg Brockman, not liable for Elon Musk’s claims that they unjustly enriched themselves and broke a founding contract made with Musk when founding the startup. The unanimous verdict, delivered after less than two hours of deliberation, is a stark rebuke of Musk and his lawyer’s claims that Altman “stole a charity” through his leadership of OpenAI.
The jury’s decision, affirmed immediately by the judge’s dismissal of all charges, provides the AI firm with a stamp of approval for its for-profit plans, already in motion, and a clear path ahead to go public later this year at around a $1tn valuation. Musk’s demands that Altman be removed as CEO and that the for-profit arm of the company transfer about $150bn to the nonprofit arm would have jeopardized the blockbuster initial public offering.
A delay to OpenAI’s financial bonanza may have been one of Musk’s goals. SpaceX – the centibillionaire’s mega-business that combines a titular rocket launching business, the satellite internet service Starlink, and OpenAI competitor xAI – is reportedly planning to go public in June.
OpenAI’s plans now seem all but guaranteed, given that the world’s richest person couldn’t put a stop to them. Wall Street, ever wary of upheaval and uncertainty, is likely breathing a sigh of relief, said Sarah Kreps, a professor and director of the Tech Policy Institute at Cornell University. She called the ruling a reflection of the tough reality that developing frontier AI is expensive and that maintaining nonprofit status is not viable in the face of fierce, capital-intensive competition.
“The decision is likely to reassure investors and the broader AI sector because it avoids a potentially chaotic outcome that could have challenged OpenAI’s commercial structure, Microsoft partnership, and future fundraising plans,” she said. “Purely nonprofit models are difficult to sustain at the cutting edge.”
What the trial did not deliver, though, were answers to major questions of the AI boom about safety, governance and labor. Musk had little claim to the mantle of champion of AI safety, given his own company’s many egregious lapses in reining in its chatbot’s offenses.
“Let’s not confuse the jury’s verdict with justice or accountability for the people of California,” said Catherine Bracy, CEO of the organization Tech Equity. She said Musk lost “on a technicality,” referencing the lawsuit’s statute of limitations and called for the state’s attorney general to revisit his agreement with OpenAI that allowed for its conversion to a for-profit enterprise. The jury found that Musk’s suit, which was filed in 2024, did not fall within the statute of limitations to bring his case. One of the key legal arguments in the trial surrounded whether the harms that Musk alleged took place – including his breach of charitable trust claim – occurred before certain dates. OpenAI argued that Musk was well aware of the company’s plans to pursue a for-profit structure as early as 2017 and therefore his case was filed outside the three-year limit.
Kreps echoed Bracy’s point: “That the trial turned on a procedural issue about timing leaves a lot of questions and debates unresolved, like how these systems should be governed, and who benefits from them economically, and whether the pace of deployment is becoming disconnected from broader public comfort with the technology.”
Musk’s lawyers said he would appeal the case. Despite their loss, they claimed they had achieved their goal of exposing Sam Altman’s deceptions. Attorney Steven Molo claimed that the testimony was “valuable for the world to see” and that the jury’s decision was a “technical” one.
OpenAI’s statement was a more straightforward proclamation of victory: “Mr Musk can tell his stories,” said attorney William Savitt. “What the jury found today is just that: Stories, not facts.” He added that the jury’s verdict was “not a technical decision; it’s a substantive one”.
Whoever the victor, the trial demonstrated that a small cabal, mostly men, rules the AI industry. As I wrote in April, this trial’s central element was not a fight over AI’s benefit to humanity as it was the hateful vendetta that Musk brought against Altman.
“The trial also served as a reminder of how much the future of AI still depends on a remarkably small group of powerful tech figures and their personal rivalries,” said Kreps. “It highlighted a broader disconnect between the people building these systems and many of the people increasingly expected to live and work alongside them.”
What actually came of Trump bringing all those tech CEOs to China?
Last week, Donald Trump visited China with a flock of tech CEOs in tow. The trip had two outcomes in the tech realm. He and Xi Jinping agreed to discuss AI safety, which, in light of recent panic over the capabilities of Anthropic’s Claude Mythos, reads like a response to recent threats to global cybersecurity.
Second, Trump and Xi may have come to an agreement to allow Nvidia to sell its chips in China. But according to an Bloomberg interview with US trade envoy Jamieson Greer, the two sides did not discuss chip export controls. It’s not clear. Observe the confusing sequence of events in headlines:
The Guardian, 13 May: Nvidia’s Jensen Huang joins other US bosses on Trump trip to China
Reuters, 14 May: Exclusive: US clears H200 chip sales to 10 China firms as Nvidia CEO looks for breakthrough
Punchbowl News, 15 May: Trump – China ‘chose not’ to buy Nvidia chips
New York Times, 15 May: Nvidia’s Future in China Remains Unclear After Trump-Xi Summit
In December, Trump approved sales in China of Nvidia’s H200 chip, a product widely considered one step behind the company’s cutting-edge wares. Since then, though, Beijing itself has not approved any purchases.
Despite Huang’s presence and advocacy for greater access to the Chinese market, the visit seems to leave the trade deal even more in limbo than before, clouded over by greater uncertainty.
AI’s effects on us
Imagining an alternative to oligarchy in Vancouver
My colleague Dara Kerr spent much of last week at the Web Summit tech conference in Canada, moderating panels on the future of the AI business and assessing founder Paddy Cosgrave’s campaign to counter the concentration of power in Silicon Valley. Her dispatch from Vancouver:
Web Summit’s Canada confab brought in more than 20,000 people and thousands of startups and investors from around the world. While Web Summit is all about technology and artificial intelligence was the main theme, this year also brought more of an air of skepticism and resistance to big tech and conservative politics than I saw last year.
On opening night, Paddy Cosgrave, the CEO of Web Summit, took the stage welcoming everyone and thanking the Canadian government for its hospitality. “Canada is asserting itself as a global leader at a time when, quite frankly, leadership is in short supply,” Cosgrave said, wearing a sweatshirt from the independent news publication Drop Site News that read “Drop News Not Bombs”.
“We meet at a critical moment in the history of technology,” Cosgrave continued. “On one side, trillions of dollars have been bet on a singular belief – that a small number of American firms will provide proprietary AI services, for a fee, to billions of individuals and businesses. On the other side are open-source AI models, freely available to anyone in the world, with Chinese open-source models dominating the rankings.”
This theme of looking outside the US for tech development came up repeatedly. I moderated a panel with Issam Hijazi, the founder and CEO of Upscrolled. He launched the popular new social media app less than a year ago in response to companies like Meta, X and TikTok and the lack of transparency around how their algorithms work. Hijazi, who is Palestinian Australian, said he believes marginalized people’s voices have been drowned out on mainstream social media platforms. Upscrolled, which has a chronological feed instead of being algorithmic, has soared in popularity over the last few months now boasting more than 6 million users.
In response to my first question about what motivated Hijazi to start a new social media app in such a crowded ecosystem, he said: “What triggered me, personally, is the event of the genocide that started about two and half years ago in Gaza. Looking at the social media space, social media platforms have been complicit in a way, whether that’s with suppressing or silencing people on those platforms or not having people to spread the information about what’s really happening on the ground.”
Other speakers this year included the leftwing political influencer Hasan Piker, Pulitzer prize-winning journalist and foreign correspondent Chris Hedges and labor organizer for Amazon warehouse workers Chris Smalls.
“There’s no such thing as a good billionaire. It’s just that simple,” Smalls said during his panel about the concentration of wealth and what that means for the broader economy. “Exploitation comes in various ways and various forms, but so do solidarity and fighting back.”