Elon Musk Claimed He Donated $100 Million in OpenAI – Now He’s Saying It Was $50 Million

It’s without a doubt that Elon Musk, the CEO of Tesla and Twitter feels deeply dissatisfied by the now popular OpenAI five years after stepping down from its board in February 2018 – frustrations that forced him to write an open letter requesting the Sam Altman-led company to consider applying breaks before continuing with the development of its most powerful systems.

In an interview with CNBC on Wednesday, following Tesla’s shareholders’ meeting, Musk expressed his concerns regarding how the company he helped launch as a “nonprofit” and “open source” transformed “itself into for profit” backed by one of the world’s largest tech giants.

“It does seem weird that something can be a nonprofit, open source, and somehow transform itself into a for-profit, closed source,” Musk said in the interview. “This would be like, let’s say you funded an organization to save the Amazon rainforest, and instead they became a lumber company, and chopped down the forest and sold it for money.”

Elon Musk Contradicts Himself

Besides claiming “I am the reason OpenAI exists” Elon Musk is unsure of how much funding he gave the then-nonprofit OpenAI. You see, in March this year, the outspoken billionaire fired at OpenAI for changing their business model and becoming “a $30B market cap for-profit.”

He said at the time that he donated the first $100 million to OpenAI and contributed immensely to the initial hiring efforts, which would later set the company up for success.

“I’m still confused as to how a non-profit to which I donated ~$100M somehow became a $30B market cap for-profit. If this is legal, why doesn’t everyone do it?” he tweeted in mid-March. A week later he lamented on Twitter again: “I donated the first $100M to OpenAI when it was a non-profit, but have no ownership or control.”

However, when David Faber, the interviewer asked how much money he channeled into the young artificial intelligence company, Musk responded, “I’m not sure the exact number, but it’s some number on the order of $50 million.”

“It wouldn’t exist without me,” he continued.

Elon Musk together with Sam Altman, Greg Brockman, John Schulman, Ilya Sutskever, and Wojciech Zaremba co-founded OpenAI in December 2015.

Almost seven years later and five years after Musk resigned from the board, OpenAI released its first version of the now popular ChatGPT chatbot, whose predecessors are revolutionizing markets and industries globally.

“I was instrumental in recruiting the key scientists and engineers, most notably Ilya Sutskever,” Musk said. “Ilya joining was the linchpin for OpenAI being ultimately a success.”

According to the Tesla CEO, the name OpenAI was deliberately chosen and refers to open-source software. Open-source principles require the source code of a particular program or platform be made freely accessible, and available for redistribution—and even modification by the general public.

He argues that the idea behind OpenAI was to build an organization that was the exact opposite of the likes of Google, whose programs and platforms are closed-sourced and for-profit companies.

“That profit motivation can be potentially dangerous,” he cautioned.

Going down memory lane, Musk said that he and the founder of Google, Larry Page would have frequent conversations centered around artificial intelligence and its potential dangers.

“I would be constantly urging him to be careful about the danger of A.I.,” Musk said. “He was really not concerned about the nature of AI and was quite cavalier about it.”

Google will later acquire, DeepMind Technologies, a UK-headquartered artificial Intelligence research laboratory in a deal worth $500 million.

The Million Dollar Question – Was it $100 Million or $50 Million?

Rolling back to the amount of money Elon Musk handed over to OpenAI, we carry out an analysis, with the help of TechCrunch – more like an investigation on how much the company at the helm of AI received in donations.

TechCrunch started looking into the matter in March after Musk proclaimed that he had given the then-non-profit OpenAI $100 million. A quick analysis of the documents filed with the Internal Revenue Service (IRS) disapproved Musk’s claim on the original $100 million.

It was an uphill task trying to figure out OpenAI’s other financiers but official filings indicate that Musk has given the company roughly $15 million in donations – explicitly traced back to him.

A request sent to Musk’s lawyer regarding the analysis gathered or to shed more light on the donations went answered.

The tax filings also painted a picture of OpenAI’s early days including free Teslas that engineers received following an investment by Reid Hoffman. It would soon dawn on the organization’s leadership that demand for computing resources was increasing – a situation that could have driven the company to Microsoft for a $1 billion initial investment.

Committed But Not Donated

Since OpenAI’s launch in December 2015, its funding has been murky with some investors committing significant amounts but never actually donating.

OpenAI had its mandate cut out clearly from the beginning and aimed to “advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return,” AI researchers Greg Brockman and Ilya Sutskever wrote in a blog post announcing the company.

As a non-profit organization, the company would rely on donors, including Altman, Musk, Brockman, Peter Thiel, Redi Hoffman, Y Combinator partner Jessica Livingston, Amazon, Infosys, and YC Research a separate nonprofit company birthed from the startup accelerator.

“In total, these funders have committed $1 billion,” the researchers wrote.

However, OpenAI would soon learn that “committed” did not necessarily mean “actually donated.” Evidence from the federal tax filings proved that YC Research did not send any funds to OpenAI, not even a single dollar.

This meant that OpenAI had received $133.2 from its inception in 2015 through to 2021 as a non-profit, with the vast majority of the funds received just before the company’s transformation to for-profit in 2019, leaving the non-profit virtually defunct, receiving only $3,066 in the entire 2021.

What was Elon Musk’s Share?

So, of the $133 million, how much came from Musk? TechCrunch asks us to start with the billionaire’s own 501©3 organization—the Musk Foundation.

In 2016, the Musk Foundation contributed $10 million to another non-profit linked to Altman, known as YC.org. Subsequently, YC.org donated the same amount to OpenAI.

According to an OpenAI spokesperson in 2019, this indirect approach was due to a delay in obtaining tax-exempt status for OpenAI from the IRS.

To date, this $10 million donation is the only publicly acknowledged monetary contribution tied to Musk to OpenAI.

However, audited financial statements submitted by YC.org to California charity regulators in 2020 indicate that a single donor provided $15 million of the organization’s 2016 revenue.

Considering that YC’s total revenue for that year was $16.6 million, it is highly plausible that Musk was the donor. In 2017, YC donated another $16 million to OpenAI, with at least $5 million likely to have originated from Musk.

The only other donation that can be traced back to Musk is an undisclosed gift to OpenAI in 2017, consisting of Tesla vehicles valued at $248,295, and a follow-up donation in 2018 for $14,105 in vehicle upgrades.

Audited financial statements indicated that the vehicles were offered to employees as compensation.

It is worth mentioning that direct donations are not the only way high net-worth individuals and institutions give to charitable courses, as they may do so through donor-advised funds (DAFs).

In 2017 the Musk Foundation gave $12.4 million in donations with an additional $6.3 million in 2018 to Fidelity Investments Charitable Gift Fund, a DAF, which contributed $7.8 million to OpenAI in the period between 2018 and 2020.

It is not possible to tie that donation to Musk as the DAF accepts donations from many other donors totaling tens of billions of dollars, but again it is not in our right or anyone’s to rule it out.

Musk’s legal representatives had access to this data from TechCrunch but did not reach out with a comment or a statement to shed more light. Hence, analysts resolved to count known donations from other contributors in a bid to put a cap on Musk’s input.

Other OpenAI Donors

Sam Altman, OpenAI’s CEO started by loaning the newly formed organization $3.75 million which he later wrote off including the interest, amounting to $3,784,637, as shown by the company’s IRS filings in 2016.

Hoffman is believed to have funded OpenAI with a total of $6 million with the first $1 million coming from his own foundation Aphorism in 2016 and the remaining million sent directly to OpenAI by the same foundation in 2017 and 2018, respectively.

Amazon and Microsoft gave OpenAI a minimum of $800,000 in cloud computing services, while Infosys confirmed its donation in a statement to TechCrunch, although none of the companies disclosed the exact figures.

Additionally, OpenAI received various in-kind corporate donations, such as a $129,000 high-performance computer from Nvidia and software and services from several other firms.

OpenAI did not reveal any concrete information regarding contributions made by Brockman or Livingston, and there is no evidence of Peter Thiel or his VC firm financially supporting OpenAI.

However, in 2018, Donor’s Trust, a DAF organization popular among conservatives and libertarians like Thiel, made a modest $100,000 contribution.

In 2017, Open Philanthropy announced a $30 million donation to OpenAI, which was distributed in three annual $10 million installments from 2017 to 2019, which were made via a non-profit managed by Facebook co-founder Dustin Moskovitz.

Open Philanthropy’s CEO, Holden Karnofsky, was granted a position on OpenAI’s board.

“We see some risks, both from unintended consequences of AI use, and from deliberate misuse), and believe that we — as a philanthropic organization, separate from academia, industry, and government — may be well-placed to support work to reduce those risks,” Philanthropy wrote at the time.

The analysis concluded that all donors other than Elon Musk gave OpenAI $75.8 million in cash and in-kind out of the total $133.2 million. With simple subtraction arithmetic, Musk may have donated $57.4 million – a figure significantly below his initial $100 million claim but close to Wednesday’s $50 million.

Nevertheless, we must not forget that the analysis did not have data on contributions that could have come from three founding donors, Thiel included, and six more donors that came later. OpenAI is likely to have received undisclosed amounts of gifts in cash and in-kind from corporate organizations.

It is worth mentioning that this article was meant to shed some light into OpenAI’s initial funding and it is not to discredit the Twitter and Tesla CEO. Considering Musk’s vast wealth and finances, a $35 million, $50 million or even $85 million discrepancy is merely a rounding error.

AI Could Go All Wrong – Musk

Above all that, Musk is still very concerned about the state of AI and what the future would look like if “they (OpenAI) do create some digital super-intelligence, almost godlike intelligence, who’s in control?”

The billionaire worries about OpenAI’s relationship with Microsoft, which has so far invested $13 billion in the most significant AI company in the world.

“I do worry that Microsoft actually may be more in control than, say the leadership team at OpenAI realizes,” he said and explained that Microsoft has significant control and rights over the software and everything that pertains to operating the inference system.

“There’s some chance that it goes wrong and destroys humanity,” Musk said, adding that chance is small, but it’s not zero.

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