Musk vs. Altman in Court, and the AI Industry’s Profit Problem

Musk vs. Altman: The Trial That Could Reshape AI

Elon Musk and Sam Altman are finally facing off in court this week, and the stakes couldn’t be higher. The case isn’t just about OpenAI’s IPO—it’s about whether the company can even exist as a for-profit entity. If the judge rules against OpenAI, we could see leadership ousted and the whole structure unraveled.

Musk, who was an early co-founder and bankrolled the project, claims Altman tricked him into funding a non-profit that secretly planned to go commercial. He’s asking for $134 billion in damages, the removal of Altman and president Greg Brockman, and a return to non-profit status.

This is higher than I expected. $134 billion is a number that says “I’m not here to settle.” And honestly, the outcome could ripple through the entire global AI race. If OpenAI gets forced back to non-profit, it changes the funding dynamics for every AI startup watching.

AI’s Missing Step: From Hype to Profit

There’s a classic South Park episode where underpants gnomes pitch a business plan: Phase 1: Collect underpants. Phase 2: ? Phase 3: Profit. That’s basically where AI is right now.

Companies have built the tech (Step 1) and promised transformation (Step 3). But Step 2—the actual path to profit—is still a giant question mark. Will Douglas Heaven wrote about this in The Algorithm newsletter, and it’s a problem I’ve been watching for a while.

The hype is real. The models are impressive. But turning that into sustainable revenue? That’s the hard part. We’ve seen this before with blockchain, with the metaverse, with every other tech trend that promised to change everything. The difference here is that AI actually works. The question is whether the business models can catch up.

Weaponized Deepfakes Are Here

Remember when deepfakes were just funny videos of Nicolas Cage in movies he wasn’t in? Those days are long gone. As Eileen Guo reports, we’re now in the era of weaponized deepfakes—sexually explicit images, political propaganda, and content that looks startlingly real.

The scary part is how cheap and accessible these tools have become. They’re already inciting violence, changing minds, and sowing mistrust. Women and marginalized groups are disproportionately affected, which is exactly what you’d expect when powerful tech falls into the hands of people with bad intentions.

Experts are worried about the erosion of trust and critical thinking. I think that’s an understatement. When you can’t trust video evidence, you can’t trust anything. We’re watching the foundations of shared reality crumble in real time.

Quick Hits from the Week

A few stories caught my eye:

OpenAI ended its exclusive partnership with Microsoft. The new deal lets OpenAI court rivals like Amazon. Microsoft still gets to license the tech, but exclusivity is dead. This feels like a sign of OpenAI scrambling ahead of its IPO—growth targets are reportedly missing.

Google signed a classified AI deal with the Pentagon. It permits AI use for “any lawful government purpose.” Over 600 Google workers called for a block on the deal, but it went through anyway. AI firms are now training military versions of their models on classified data. Make of that what you will.

Weaponized deepfakes made MIT Technology Review’s list of 10 Things That Matter in AI Right Now. It’s worth paying attention to, especially if you’re building or deploying AI systems.

I’ve been in this field long enough to know that hype cycles come and go. But this trial, the profit problem, and the deepfake threat are all real structural issues that won’t just disappear. The next few months will tell us a lot about where this industry is really headed.