GM. This is Milk Road AI, your front-row seat to the AI cage match. We track the billions, decode the beefs, and help you make sense of the chaos.
Here’s what we’ve got for you today:
- ✍️ Musk sues OpenAI for $134B.
- 🎙️ The Milk Road AI Show: Google and Anthropic Are Pulling Away From Everyone Else w/ Ejaaz.
- 🍪 Micron’s $1.8B powerchip deal.
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MUSK VS OPENAI: $134B WAR
There is an old saying: "Hell hath no fury like a woman scorned."
Whoever wrote that clearly never met a tech billionaire who got cut out of the deal of the century.
We are witnessing the messiest divorce in Silicon Valley history.
On one side, you have Elon Musk, the richest man on Earth.
On the other, Sam Altman and OpenAI, the kings of the AI revolution.
We are looking at a potential $134B lawsuit (breakup fee) that makes even the messiest Hollywood divorce look cheap.
But the lawyers just emptied the group chat, and it is messy.
We have private journals being used as ammo, harassment claims flying like Starship, and a rejection so sharp it probably hurt more than that time the Cybertruck window smashed.
Let’s unroll the yellow police tape and look at the evidence.
The Birthday Party from hell
The year was 2015. Elon Musk was celebrating his 44th birthday at a resort in Napa Valley.
The champagne was flowing, and the guest list included his best friend, Google co-founder Larry Page.
But as the night went on, the party turned dark.
Page began arguing for a future of "digital superintelligence", claiming that replacing humans with AI was just the next step in evolution.
When Musk pushed back, arguing for safety rails, Page dropped the ultimate insult:
He called Musk a "speciesist" for favoring humans over digital lifeforms.
Ouch. Imagine getting called a bigot for liking people more than a toaster.
And just a year earlier, in 2014, Google had snatched up DeepMind, the world's smartest AI lab.
Musk, an early investor, had desperately tried to block the sale, scraping together counter-offers to keep the company independent.
Why? Because he didn't trust his "best friend" Larry and Google's long-term intentions for AI safety.
But Google’s wallet was deeper, and the acquisition went through, handing the most powerful AI lab to the person who had just finished telling Musk that favoring human survival over robots was a form of bigotry.
Musk realized then: if he couldn't buy the future, he’d have to build a rival one.
He teamed up with Sam Altman, Greg Brockman, and research wizard Ilya Sutskever (whom they poached from Google) and seven others to start OpenAI in 2015.
Funny enough, only 3 of the original co-founders remain at OpenAI, talk about drama.
Anyway, they had backing from legends like Reid Hoffman and Peter Thiel, with a collective pledge of $1B.
Their goal was to build safe AGI to "benefit humanity", pledging to remain a non-profit forever, explicitly "unconstrained by a need to generate financial return".
*Narrator voice: They would, in fact, generate a lot of financial return.*
Who actually paid the tab?
Musk loves to say he "founded" OpenAI. And to be fair, court documents confirm he provided roughly 60% of the seed funding (~$44M).
Compare that to Sam Altman, who contributed closer to $3.8M.
Hence, one of the main reasons Musk is suing:
He feels like he paid for the entire group project, did the heavy lifting, and is now watching the guy who bought the poster board accept the A+.
But here is the brutal irony: Even Musk’s $44M turned out to be pocket change.
By 2017, the cost of training AI was skyrocketing.
The team realized that idealism doesn't buy GPUs.
They were bringing a knife to a nuclear war against Google, and their non-profit piggy bank was running on fumes.
Musk looked at the math and realized that without massive resources, they were doomed.
In fact, the pivot wasn't even a surprise.
In September 2017, Musk was already caught on call notes calling for a structural change.
He told the team they needed to transition to a "B-corp or C-corp or something", insisting they had to "tell the story and not lose moral high ground".
Translation: "We need to make money, but we need to look like saints doing it."
But despite the tough talk, nothing actually happened in 2017.
The board dragged its feet, the "moral high ground" kept burning cash, and the big structural change stalled out.
So in a now-infamous email dated February 1, 2018, Musk forwarded a brutal reality check to the founders.
The memo laid out that Google was an "$800B company" (at the time) with massive infrastructure, while OpenAI was just "burning cash".
Musk endorsed the memo’s conclusion as "exactly right", telling the team:
"Tesla is the only path that could even hope to hold a candle to Google. Even then, the probability of being a counterweight to Google is small. It just isn't zero."
The proposal he presented was radical: Merge OpenAI into Tesla.
The email explicitly argued that the most promising option was for OpenAI to "attach to Tesla as its cash cow", using the car company’s revenue and massive compute power to fund the war against Google.
Musk’s logic was simple: Google owns the game.
Unless we attach ourselves to a giant like Tesla, our chance of success is literally zero.
But the board gave him a hard no.
They refused to let one person control the mission or turn their non-profit into a subsidiary of a car company.
When the board rejected the takeover, Musk took his ball and went home.
He stopped funding them, told them they would fail without him, and left them to die.
Until someone else stepped up to play sugar daddy.
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MUSK VS OPENAI: $134B WAR (P2)
Left without Musk's wallet, OpenAI was desperate.
They had the brains, but they were broke.
Enter Satya Nadella and Microsoft.
In 2019, OpenAI invented a legal Frankenstein called the "Capped-Profit" model.
This allowed them to take a massive $1B investment from Microsoft, while still technically answering to a non-profit board.
Musk was furious.
He felt he had donated to a charity to save the rainforest, only to watch that charity start selling lumber to Microsoft.
But for OpenAI, the gamble paid off.
With the help of Microsoft, in November 2022 they dropped ChatGPT like it was the hottest album of the decade.
And the world as we knew it changed forever.
ChatGPT became the fastest-growing app ever; it hit 1 million users in just 5 days.
To put that insane speed into perspective: it took Instagram 75 days and Spotify 150 days to reach that same milestone.
Today, Chat is sitting at roughly 800 million weekly users.
Overnight, the "charity case" that Musk left for dead became the most important company in the world.
Fighting a war on two fronts
Now, you might be wondering: Why is all of this exploding right now? Does Musk actually care about the $134B?
My best guess is no.
This isn't about the money, it’s about the squeeze.
Musk is trying to crush OpenAI from every single angle because he knows that in this game, if they win, his own AI venture, xAI (Grok), eats their dust.
And to make matters worse, for the last few months, OpenAI has been fighting a defensive war.
On one front, you have Google, which is using its massive distribution advantage to shove Gemini onto every phone and browser in existence.
"Oh, you want to search for a recipe? Here's an AI summary instead."
On the other front, you have Musk, who is trying to bleed OpenAI dry in court and in numerous other ways.
Even just yesterday, the feud spilled onto X.
Musk tweeted a warning calling ChatGPT unsafe, and Sam Altman, usually the quiet diplomat snapped back, pointing out Tesla's own safety struggles.
"Your cars crash!", "Your chatbot lies!". Daddy, chill.
But there is a bigger risk here than just to hurt feelings.
OpenAI has pinky-promised to spend a staggering $1.4T on infrastructure over the next few years.
A majority of the AI economy is built on those commitments.
If Musk succeeds in slowing them down or even just wobbling the table, those trillion-dollar promises start to look terrifyingly shaky.
And if worse comes to worst, we will see a massive rewriting of valuations for numerous companies, and this event will not be pretty for the entire market.
Alright, that’s it for this edition of Milk Road AI. We want to hear from you.
Reply to this email with your vote:
Pick your fighter:
- Team Elon: Burn it down. The non-profit was a lie.
- Team Sam: Elon is just jealous of ChatGPT.
- I just hope mom and dad stop fighting.
AI GIANTS SHIFT INTO OVERDRIVE 🤖
In today’s episode, we sat down with Ejaaz to talk about how Google and Anthropic are pulling ahead as AI moves from lab breakthroughs to real world distribution and adoption.
Here’s what you’ll hear:
- Why Google flipped a data plus distribution switch with Gemini across Gmail, Search and billions of devices.
- How Anthropic’s Claude Code and Claude Cowork signal the rise of agent driven automation and real revenue traction.
- What 2026 means for devices, robotics, autonomy and an AI fueled healthcare breakout.
- The investment and infrastructure implications as compute, memory and energy constraints shape winners.
Don’t sleep on this one 👇
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BITE-SIZED COOKIES FOR THE ROAD 🍪
Elon Musk says Tesla is restarting Dojo3, this time for “space-based AI compute”. Tesla previously shut the project down, but Musk says hiring is underway again.
Anthropic CEO Dario Amodei slammed the U.S. decision to allow Nvidia H200 exports to China. He compared it to “selling nuclear weapons”, despite Nvidia being a key partner.
Micron is buying a Taiwan chip fab from Powerchip for $1.8B to boost DRAM production. The ramp is expected in 2027 as AI data centers drive huge memory demand.
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