TBPN – "The Elon vs OpenAI Lawsuit and Ads in ChatGPT"

Date: January 17, 2026
Hosts: John Coogan & Jordi Hays
Format: Diet TBPN (highlight clips, under 30 min)

Overview

This episode dives deep into the intensifying legal feud between Elon Musk and OpenAI, exploring new discoveries and contrasting arguments about the lawsuit. The team juxtaposes both the "Elon should lose" and "Elon should win" perspectives, analyzes leaked internal documents, and discusses the implications for OpenAI’s future, including the addition of ads to ChatGPT. Interspersed with humor, the hosts also touch on recent tech, finance, and policy news, including Ford/BYD battery talks and California’s asset tax controversy.

1. The Elon vs OpenAI Lawsuit: Both Sides Explored

Steelmanning Sam Altman/Greg & "Elon Should Lose"

[00:40–05:46]

• Donation Not Critical to Success:
  • Alex argues Elon’s donation (reported between $38–$45 million) was significant, but not critical. OpenAI could have survived, albeit more “scrappy,” without Musk's money.

    "If Elon had never donated, maybe Sam would have just stepped up his donation...OpenAI wouldn't exist—right? It's totally possible everything would have been the same." - Alex [01:22]

• Mission Alignment:
  • The nonprofit's mission persists. Now, it’s just the holding entity for a massive stake in the for-profit arm.
• Economic Reality:
  • Building AGI requires more capital than possible in the nonprofit sector unless a mega-donor (like Musk) provided tens of billions.

    “If Elon really believed in the nonprofit mission...I'm staying with the nonprofit strategy and I'm going to put up the $50 billion." - Alex [03:37]

• Competing with Google:
  • Google can spend billions through its economic flywheel—a nonprofit OpenAI couldn't keep pace.

Steelmanning Elon’s Side & "Elon Should Win"

[06:16–10:12]

• Breach of Donor Intent:
  • Alex highlights that Musk was promised a nonprofit mission; OpenAI’s shift to for-profit—especially after accepting a massive investment from Microsoft—breaches this commitment.
• Direct Evidence via Emails:
  • Elon’s pivotal email:

    “Guys, I've had enough. This is the final straw. Either go do something on your own or continue with OpenAI as a nonprofit. Otherwise I’m out. I’m not donating anymore.” - Quoting Elon Musk [06:54]

• Donor Rights:
  • As with university donors dictating how their gift is used, Musk’s contribution came with intended use.

    “If you give that to a university and you want a building, they need to build that building...you can dictate these things in a nonprofit donation.” - Alex [08:55]

• Bait-and-Switch Narrative:
  • Framing OpenAI’s path as “13 San Francisco elites promised AI for humanity, took Musk’s money, then built a $500B for-profit empire. Jury is going to hate this." - Paraphrased [09:16]
• Legal Nuance:
  • The donation was actually via a donor-advised fund, not directly, complicating “donor intent” claims. [11:12–11:56]

2. Key Lawsuit Implications

IPO Complications

[11:01]

• OpenAI's potential IPO could be derailed by this lawsuit, given it “goes at the foundation of the entity itself.”

Sam’s & Others’ Equity

[12:42–13:16]

• Sam Altman’s real stake in OpenAI is unclear; speculation is around 7%, possibly via indirect exposure through YC.

Leaked Documents and Internal Friction

[14:00–16:00]

• Sutskever’s hesitance on open source, worries about not “hurting stability.”

  “My trepidation around open source is that we’re treating it as a sideshow...if open source takes off, everyone could standardize on that.” - Sutskever, summarized by Alex [14:02]

• Discord within OpenAI about setting standards and managing competitive threats.
• Elon’s email about not wanting to work with Bezos (Amazon):

  “I think Jeff is a bit of a tool and Satya is not. So I slightly prefer Microsoft, but I hate the marketing department.” - Quoting Elon Musk [17:03]

• Altman’s response to Amazon:

  “Amazon had started, quote, really dicking us around.” - Sam Altman [17:18]

Microsoft’s Deals with OpenAI

[15:41–18:25]

• Microsoft’s $1B investment capped at a $500B upside.

  “That’s not bad—a 500x bagger is gonna move the needle for Microsoft for sure.” - Alex [17:29]

• Later, a secret $2B investment with even lower upside, in exchange for broader licensing.
• Musk’s view: OpenAI’s profit pivot is “plain and simple, they stole a charity.” [19:00]

3. Jury & Public Perception

• Jury Selection Challenges:

  “I mean, this is gonna be the big challenge, finding 12 regular people in Oakland...Four of them are driving Teslas!” - Ben [10:12, 19:23]

• Vibe War: Alex frames this as more “vibes” than existential—jury might decide on narrative, not legal minutiae. [10:36]

4. Ads in ChatGPT: Reaction & Analysis

[23:29–26:30]

• OpenAI’s Position:
  • Ads are coming to ChatGPT Free & Go tiers, "clearly labeled" and firewalled from model output.

    “Responses in ChatGPT will not be influenced by ads. That is, there’s a firewall...they don't interface with each other at all.” - Alex [24:02]

• Host Opinions:
  • Not concerned, see this as analogous to Google search ads.
  • “People seem to be really riled up about this...The whole point is that ads have made it so that wonderful services on the Internet have been free for decades.” – Ben [25:22]
  • Humor about bad school essays with AI copying ads, “maybe that’s a feature.” [26:10]

5. Other Tech & Policy News Highlights

Ford & BYD Battery Deal

[21:48–23:02]

• Ford in talks with BYD for hybrid vehicle batteries as U.S. car market shifts away from all-EV.

California Asset Seizure Tax & Wealth Exodus

[27:45–30:32]

• Underreported exodus of wealth from California due to proposed asset seizure tax.

  “It’s not about billionaires. It’s a new tax system that simply destroys private property rights in America...All private property is now public property.” - Alex [28:53]

• Fears of fiscal crisis, federal/state friction, or even talk of secession if discontent grows.

AGI as the Solution?

[30:27]

• “The answer is clearly just AGI-pilling all of the California regulators. AGI will solve the deficit...AGI is here to save it.” – Alex [30:32]

6. Memorable Moments & Running Jokes

• Ben & Jerry’s Scooping Reference

  “Bro scooping harder than a Ben and Jerry’s employee.” – Vergov, relayed by Alex [14:28]

• “Claude boys” at School
  • Anecdote about students who base all decisions on what Claude AI tells them. [27:40]
• Claude Logo’s Mathematical Roots
  • Flowers and exponential growth references, humorously linked to the AI incubator logo. [26:30]

7. Notable Quotes with Timestamps

• “If Elon had never donated...OpenAI wouldn't exist—right?...maybe everything would have been the same.” – Alex [01:22]
• “If Elon really believed in the nonprofit mission...I'm going to put up the $50 billion.” – Alex [03:37]
• "This whole lawsuit is clearly just corporate lawfare...Let the best product win." – Alex [05:45]
• "Guys, I've had enough. This is the final straw. Either go do something on your own or continue with OpenAI as a nonprofit. Otherwise I’m out." – Quoting Elon Musk [06:54]
• "You can dictate these things in a nonprofit donation...He has every right to demand results." – Alex [08:55]
• "They stole a charity, plain and simple." – Musk’s perspective, relayed by Alex [19:00]

8. Tone and Style

• Conversational: Lively, irreverent, occasionally sardonic.
• Deeply Informed: References to lawsuit legal details, equity structures, leaked docs.
• Tech-Insider Jokes: Plenty of inside-baseball references to startups, AI labs, and venture norms.

9. Episode Timeline (Select Timestamps)

| Time | Segment/Topic | |------------|-----------------------------------------------------------| | 00:40–05:46| Elon Should Lose (OpenAI’s Side) | | 06:16–10:12| Elon Should Win (Elon's Side, Donor Intent, Legal details)| | 14:00–16:00| Leaked Docs & Internal Power Struggles | | 17:03 | Emails re: Amazon vs Microsoft partnerships | | 23:29–26:30| Ads in ChatGPT | | 27:45–30:32| California’s Asset Tax and Wealth Exodus |

10. Final Takeaways

• The Elon vs. OpenAI lawsuit is a high-stakes “vibes war,” pitting narratives of mission betrayal against inevitable strategic pivots in AI development.
• Big money, egos, and shifting governance models in AI are colliding in both courtrooms and markets.
• As OpenAI nudges further toward commercialization (ads in ChatGPT), the debate around its foundational promises, donor intent, and the fate of nonprofit tech deepens.
• California’s policy experiments could trigger profound shifts in tech wealth allocation, with national implications.
• Through it all, the TBPN team maintains their signature mix of sharp insight and deadpan comedy.