WEBVTT

cue-1
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That he had not articulated any remedy as
against the for-profit entity,

cue-2
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that there was zero evidence in the
record.

cue-3
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Well, Your Honor, we did not realize that
they were going to pivot away from this

cue-4
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argument until after the deadline for
summary judgment. This was a late change,

cue-5
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-as Your Honor knows.
-I understand that. What was,

cue-6
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uh, it, it's my understanding that this is
the only expert they have on damages.

cue-7
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-That is correct, Your Honor.
-And that this expert was identified for

cue-8
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all damages for all defendants.

cue-9
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That, that's correct. Uh, and we did not
understand, and I, I frankly still don't

cue-10
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understand exactly

cue-11
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how this works. I've, I'm not aware of a
principle of law where an expert's report

cue-12
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can be agnostic as to who benefited and
who was harmed.

cue-13
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That seems to be what Dr. Wazzan is
planning to testify to today.

cue-14
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But

cue-15
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we asked the questions that we asked at
the deposition because we wanted to be

cue-16
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clear, at least about the economics of the
way he was proposing to present this

cue-17
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testimony. He made clear that it was all
coming from the nonprofit. The testimony

cue-18
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was

cue-19
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not ambiguous on that subject, and he gave
it repeatedly. And, and I know this may

cue-20
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be a little unorthodox, but I'd, I'd like
to, if I could, Your Honor, show you a

cue-21
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slide that Dr. Wazzan is going to present
to the court today

cue-22
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from this morning's presentation. Mr. Krye
sent this to me last night. I, I think

cue-23
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it's a very nice visualization

cue-24
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-of what we're saying. And so-
-So

cue-25
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it's...

cue-26
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Well, let's just get on with the
evidentiary hearing.

cue-27
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-Understood.
-And, um,

cue-28
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I, I, I can deal with it. I mean, this all
b- may be moot.

cue-29
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-Understood.
-And I can deal with it,

cue-30
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uh,

cue-31
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in the context of dealing with something
if I have to get there. So let's just,

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I'll take it under submission,

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and

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let's just get on with the evidence.

cue-35
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Very, very happy to do that, Your Honor.
Thank you.

cue-36
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All right.

cue-37
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-Thank you, Your Honor.
-Now, the, um, are all the experts gonna

cue-38
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sit and listen to the testimony of the
other experts?

cue-39
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Uh, Dr. Strebelov is in the, in the, uh,
courtroom today, yes.

cue-40
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Okay. And Dr. Arnold?

cue-41
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-Dr. Arnold is here as well, Your Honor.
-In the courtroom?

cue-42
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-Yes, Your Honor.
-Okay. All right. Dr. Wazzan, Wazzan?

cue-43
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Yes, Dr. Wazzan is also in the courtroom,
Your Honor.

cue-44
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All right. We should pr- Come on up.

cue-45
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Your Honor, one, one last question. Before
we get, dive into Dr. Wazzan's testimony,

cue-46
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I do have, um, some very brief remarks
just to situated by way of, I mean, a

cue-47
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short opening for remedies. D- would Your
Honor entertain that or, or do you want-

cue-48
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Mr. Wazzan,

cue-49
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-have a seat.
-Okay.

cue-50
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-No.
-Thank you.

cue-51
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Uh, may I give a witness binder to the
witness?

cue-52
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-You may. You need to remain standing.
-Please remain standing and ra-

cue-53
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raise your right hand to be sworn.

cue-54
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Do you solemnly

cue-55
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swear and affirm that the testimony you're
about to give before this court shall be

cue-56
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the truth, the whole truth, and nothing
but the truth, so help you God, or so you

cue-57
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affirm? Please say, "I do," or, "I
affirm."

cue-58
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I do.

cue-59
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Thank you, sir. Please be seated. Speak
clearly into the microphone.

cue-60
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Please state your full name and spell your
last name for the record.

cue-61
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Christopher Paul Wazzan, W-A-Z-Z-A-N.

cue-62
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-Good morning.
-Morning, Your Honor.

cue-63
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-You may proceed.
-May I hand up a binder, Your Honor?

cue-64
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You may.

cue-65
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Dr.

cue-66
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Wazzan, could you please introduce
yourself to the court?

cue-67
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Uh, Christopher Paul Wazzan.

cue-68
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What opinions are you here to provide
today?

cue-69
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I'm essentially here to

cue-70
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determine the

cue-71
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value unlawfully captured by Microsoft and
the OpenAI for-profit entity that are

cue-72
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-properly attributable to Mr. Musk.
-And are you prepared to do that as to each

cue-73
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particular entity? I'm sure you just
heard the discussion we had.

cue-74
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I did. I don't follow all the legal
intricacies of that. As I see it, it's the

cue-75
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wrongful gains occur in the for-profit
entity,

cue-76
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but the nonprofit owns a piece of that
for-profit. So sort of by transitivity,

cue-77
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it doesn't really matter to my analysis

cue-78
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-where it comes from.
-But your analysis seems to be devoid

cue-79
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of connection to the underlying facts.

cue-80
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That is, you don't seem to connect any of
the particular conduct,

cue-81
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you lump it all together.

cue-82
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-I-
-D- do I understand your report right in

cue-83
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that sense, that you don't make any
distinctions between the conduct that's

cue-84
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actually engaged in by the various
players?

cue-85
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I'm not sure I follow. As I understand it,
the conduct occurs, the, the wrongful

cue-86
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conduct occurs by the creation of the
for-profit-

cue-87
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You did no analysis

cue-88
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of the individual conduct of the
individual, uh, defendants and assess

cue-89
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wrongful,

cue-90
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uh, gains depending on what that, those
individuals

cue-91
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did, right? You didn't do that. I didn't
read that in your report.

cue-92
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I was asked to assume liability, and that
the creation of the for-profit entity was

cue-93
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-the wrongful act.
-And, and

cue-94
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you were, you were also, um, told to
assume that every single defendant's

cue-95
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conduct was equal, right, in terms of,

cue-96
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of their wrongful conduct.

cue-97
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So let's say someone's wrongful conduct
attributed to 5%,

cue-98
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and the other is

cue-99
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20%, 20%, whatever.

cue-100
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You, you weren't asked to do any analysis
of their individual conduct, right?

cue-101
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-That's correct.
-You just said

cue-102
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they're all bad guys. They're all
wrongfully a- uh, acting inappropriately.

cue-103
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And so here's the number, and it should be
equally assessed to all of them, except

cue-104
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for maybe Microsoft.

cue-105
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Well, they're not equally assessed.
They're e- they're assessed predicated on

cue-106
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the percentages that they hold in the
for-profit.

cue-107
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-But n-
-So there's different percentages that each

cue-108
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-party holds
-... but on the backside, not on the front

cue-109
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side.

cue-110
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You're just assessing it based upon their
interest, not on their conduct.

cue-111
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U- unless I'm misunderstanding your
report.

cue-112
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Y- Your Honor, could I ask, ask some
questions that might help clarify this?

cue-113
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No,

cue-114
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after he has asked this, answers this
question.

cue-115
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I, I thought I was fairly clear in the
deposition, in the report I've-

cue-116
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-I haven't read your deposition.
-I'm sorry, Your Honor. I, I, I assume

cue-117
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liability

cue-118
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for the wrongful acts, and the wrongful
act was all the parties that

cue-119
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created the

cue-120
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for-profit, and so I'm treating them all
equally.

cue-121
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Yeah. So that's what I said. So the answer
to my question is yes, right?

cue-122
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-Yes.
-Okay. Now-

cue-123
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Just to be clear, Dr. Wasan, y- you didn't
do any assessment of wrongful gains

cue-124
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specifically with respect to Sam Altman,
right?

cue-125
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-No, I didn't.
-And you did not do any, uh, assessment of

cue-126
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wrongful gains specifically with respect
to Greg Brockman, right?

cue-127
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-Correct.
-You did an assessment for OpenAI's

cue-128
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-wrongful gains?
-Yes.

cue-129
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And you did an assessment for Microsoft's
wrongful gains?

cue-130
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-Yes.
-And for OpenAI's wrongful gains, is it

cue-131
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your opinion that the amount of wrongful
gains is the same, whether you look at it

cue-132
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from the perspective of the for-profit or
the nonprofit?

cue-133
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-Yes.
-Objection. Leading.

cue-134
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Sustained.

cue-135
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Dr. Wasan, in your opinion, what's the
relationship,

cue-136
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uh, between the wrongful gains of the
OpenAI for-profit and the OpenAI

cue-137
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nonprofit?

cue-138
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Like I said, the wrongful gains occur in
the for-profit-

cue-139
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Move closer to that mic so people can hear
you.

cue-140
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The wrongful gains occur in the for-profit
entity, but the nonprofit owns a stake of

cue-141
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that

cue-142
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for-profit entity.

cue-143
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When you say that the wrongful gains occur
in the for-profit entity, what do you

cue-144
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mean by that?

cue-145
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Well, all the wrongful gains occur in the,
in the for-profit. There's no, there's no

cue-146
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gains in the nonprofit.

cue-147
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Um, but to the extent that the nonprofit
holds an equity stake of the for-profit,

cue-148
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they, they have gained in that fashion.

cue-149
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-And so-
-I don't understand what you mean by that

cue-150
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-statement.
-Uh, okay.

cue-151
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[clears throat] That is, did you look at
the Hemming Morris

cue-152
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analysis of the value of the nonprofit?

cue-153
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Uh, yes.

cue-154
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Okay.

cue-155
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And what was the value of the nonprofit at
the time the report was done?

cue-156
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-It was very low.
-What was it, do you recall?

cue-157
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Uh, not from memory.

cue-158
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And there was no gain from that position?

cue-159
00:09:00.800 --> 00:09:06.319
Well, the value of OpenAI for-profit is
increasing over time, so if you go back

cue-160
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-far enough, it's-
-You just-- I'm trying to understand your

cue-161
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statement. You said there was no gain in
the nonprofit.

cue-162
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No, no, no. No, I'm sorry. That's... Uh,
you're misunderstanding me.

cue-163
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All the profits, all the value is created
or is captured in the for-profit.

cue-164
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The charity doesn't generate profits. The
for-profit generates profits, but the

cue-165
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charity piece,

cue-166
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the charity parent owns a piece of that
for-profit entity.

cue-167
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So as the value of the for-profit
increases,

cue-168
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the value of the piece held by the
nonprofit also increases.

cue-169
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Proceed.

cue-170
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Dr. Wasan, based on that analysis, what,
in your opinion, are the wrongful gains

cue-171
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that OpenAI derived from Elon's
contributions?

cue-172
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Which OpenAI? You've gotta be very clear.

cue-173
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What are the amount of the wrongful gains
that the OpenAI for-profit derived from

cue-174
00:10:03.460 --> 00:10:04.430
Elon's contributions?

cue-175
00:10:05.180 --> 00:10:10.240
Somewhere between sixty-five billion and a
hundred and nine billion. Sixty-five

cue-176
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billion to one hundred and nine billion,

cue-177
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predicated on the October twenty
twenty-five value.

cue-178
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And what is the amount of wrongful gains
that the OpenAI nonprofit derived from

cue-179
00:10:21.120 --> 00:10:24.140
-Elon's contributions?
-The same figure.

cue-180
00:10:24.140 --> 00:10:27.760
What is the amount of wrongful gains that
Microsoft derived from Elon's

cue-181
00:10:27.760 --> 00:10:28.460
contributions?

cue-182
00:10:29.090 --> 00:10:31.360
Between thirteen and twenty-five billion.

cue-183
00:10:33.260 --> 00:10:36.060
How much did Elon originally donate to
OpenAI?

cue-184
00:10:37.420 --> 00:10:38.700
Around thirty-eight million.

cue-185
00:10:40.680 --> 00:10:46.340
What do OpenAI and Microsoft's wrongful
gains represent as a multiple of that

cue-186
00:10:46.340 --> 00:10:47.340
initial contribution?

cue-187
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It's a,

cue-188
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a very large number, like two thousand
percent.

cue-189
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Do you consider a two thousand times
return on initial contribution to be

cue-190
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extraordinary by Silicon Valley standards?

cue-191
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No.

cue-192
00:11:00.600 --> 00:11:04.720
Are there examples of Silicon Valley
entrepreneurs who have achieved two

cue-193
00:11:04.720 --> 00:11:07.240
thousand times returns on their initial
investments?

cue-194
00:11:08.180 --> 00:11:10.220
There are many, uh, going back all the way
to,

cue-195
00:11:11.900 --> 00:11:16.340
uh, Hewlett-Packard or Apple or any
company founded in Silicon Valley that

cue-196
00:11:16.340 --> 00:11:17.590
became very successful,

cue-197
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-all the way up through, um-
-What is the rate of failure of the

cue-198
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-startups in Silicon Valley?
-Quite high.

cue-199
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What is the number?

cue-200
00:11:27.340 --> 00:11:29.150
I'd have to look at the literature. I
don't-

cue-201
00:11:29.150 --> 00:11:31.020
And you're an expert. You can't give me a
ballpark?

cue-202
00:11:32.440 --> 00:11:33.260
What's the ballpark?

cue-203
00:11:33.880 --> 00:11:37.320
More than half. More than probably around
eighty percent.

cue-204
00:11:37.980 --> 00:11:39.340
-More than eighty percent?
-Yes.

cue-205
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And in that case, the, um, gain, had it
failed, would have been zero.

cue-206
00:11:45.840 --> 00:11:46.040
Yes.

cue-207
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Proceed.

cue-208
00:11:48.540 --> 00:11:52.860
Uh, do you consider a two thousand times
return on initial contribution

cue-209
00:11:52.860 --> 00:11:58.420
extraordinary for a venture founded by
Elon Musk in particular?

cue-210
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He has a really successful track record
through Tesla, through SpaceX.

cue-211
00:12:03.650 --> 00:12:08.480
Have you analyzed every single contr-- or
every single, uh, startup that he's

cue-212
00:12:08.480 --> 00:12:09.460
-funded?
-No.

cue-213
00:12:10.396 --> 00:12:15.115
So then how can you make that... I mean,
yeah, we all know about the big ones, but

cue-214
00:12:15.116 --> 00:12:18.966
you did no analysis of your client's, um,

cue-215
00:12:21.136 --> 00:12:25.296
all of his ventures? All of the monies
that he's given all these startups?

cue-216
00:12:25.956 --> 00:12:28.636
-No.
-So you don't know what the failure rate is

cue-217
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then?

cue-218
00:12:29.476 --> 00:12:31.976
For Mr. Musk's particular investments, I
do not.

cue-219
00:12:31.976 --> 00:12:34.836
All right. Then next question. He doesn't
have foundation for that statement.

cue-220
00:12:35.756 --> 00:12:38.416
-I-
-The record can reflect, we know the big

cue-221
00:12:38.416 --> 00:12:38.676
ones.

cue-222
00:12:40.096 --> 00:12:43.256
-Next question.
-With respect to the big ones, Dr. Wasan,

cue-223
00:12:43.256 --> 00:12:43.836
how did they fare?

cue-224
00:12:44.556 --> 00:12:45.276
Extremely well.

cue-225
00:12:46.356 --> 00:12:51.096
And was that a, was that fact commonly
known among, uh, Silicon Valley investors?

cue-226
00:12:51.096 --> 00:12:52.276
How would he know that?

cue-227
00:12:53.156 --> 00:12:54.876
In the industry? Reframe your question.

cue-228
00:12:55.656 --> 00:12:55.796
Uh,

cue-229
00:12:56.436 --> 00:12:56.556
well,

cue-230
00:12:57.596 --> 00:13:01.516
we'll return to that after I, after we
discuss your background in venture capital

cue-231
00:13:01.516 --> 00:13:01.996
investing.

cue-232
00:13:04.556 --> 00:13:05.236
On that topic,

cue-233
00:13:05.836 --> 00:13:06.036
um,

cue-234
00:13:07.736 --> 00:13:08.916
what's your educational background?

cue-235
00:13:09.576 --> 00:13:13.396
I have an undergraduate degree in
economics from Berkeley, and a PhD in

cue-236
00:13:13.396 --> 00:13:16.796
-finance from UCLA.
-You're currently a managing director at

cue-237
00:13:16.796 --> 00:13:18.316
-Berkeley Research Group?
-Yes, I am.

cue-238
00:13:18.916 --> 00:13:19.936
What do you do in that role?

cue-239
00:13:20.996 --> 00:13:23.036
It's a variety of things. I manage the LA
office,

cue-240
00:13:24.036 --> 00:13:24.296
um,

cue-241
00:13:25.076 --> 00:13:30.796
and I engage in consulting projects like
this. I do valuation work. I do a fair

cue-242
00:13:30.796 --> 00:13:32.116
amount of public policy work.

cue-243
00:13:33.176 --> 00:13:33.436
Um,

cue-244
00:13:34.576 --> 00:13:36.175
kind of general things like that.

cue-245
00:13:36.176 --> 00:13:39.816
Do you also have real-world experience as
an investor?

cue-246
00:13:39.816 --> 00:13:42.996
-Yes, I do.
-Uh, could you tell the court about that?

cue-247
00:13:42.996 --> 00:13:48.136
Yes, I'm the president and CEO of Wasan
and Company Investment LLC,

cue-248
00:13:48.956 --> 00:13:54.616
a company that provides, uh, seed-level
financing to startups primarily out of the

cue-249
00:13:54.616 --> 00:13:55.936
UCLA School of Engineering.

cue-250
00:13:57.216 --> 00:14:00.396
How many startups has Wasan and Company
invested in?

cue-251
00:14:00.396 --> 00:14:00.696
Seven.

cue-252
00:14:01.576 --> 00:14:04.756
What types of tech startups have those
been?

cue-253
00:14:04.756 --> 00:14:10.016
They're basically semiconductor and
biomedical, biomechanical firms.

cue-254
00:14:10.016 --> 00:14:13.916
Well, what are the big players in Silicon
Valley? What is the number of startups

cue-255
00:14:13.916 --> 00:14:16.276
that they typically are known to have
funded

cue-256
00:14:17.336 --> 00:14:20.236
in any given year or any given time period
that you know of?

cue-257
00:14:20.895 --> 00:14:22.296
For example, like Sequoia?

cue-258
00:14:22.916 --> 00:14:25.625
Like, like Musk and others. Yeah, Sequoia.
How many?

cue-259
00:14:25.625 --> 00:14:25.816
Sequoia,

cue-260
00:14:27.676 --> 00:14:28.036
dozens.

cue-261
00:14:29.056 --> 00:14:32.296
-Dozens over what period of time?
-Dozens per year.

cue-262
00:14:32.296 --> 00:14:37.116
And of those dozens per year, we're still
getting 80% failure rates?

cue-263
00:14:39.416 --> 00:14:39.936
You know, I,

cue-264
00:14:41.936 --> 00:14:45.936
I couldn't speak specifically to Sequoia
or some of the biggers, but overall in the

cue-265
00:14:45.936 --> 00:14:48.296
industry, most startups fail.

cue-266
00:14:48.956 --> 00:14:51.996
Some firms have much higher success rates
than others.

cue-267
00:14:51.996 --> 00:14:55.756
Do you have any idea whatsoever how many
Musk has funded

cue-268
00:14:56.376 --> 00:14:58.016
-over his career?
-I do not.

cue-269
00:14:59.276 --> 00:15:00.536
Seven's a pretty small number,

cue-270
00:15:01.576 --> 00:15:06.496
isn't it, given how Silicon Valley
operates in terms of the big venture

cue-271
00:15:07.276 --> 00:15:08.316
-funders?
-Yes.

cue-272
00:15:09.156 --> 00:15:09.536
Proceed.

cue-273
00:15:10.496 --> 00:15:11.116
Dr. Wasan,

cue-274
00:15:11.956 --> 00:15:13.856
of those seven investments, have some of
them

cue-275
00:15:14.476 --> 00:15:16.516
-yielded successful results?
-Yes.

cue-276
00:15:16.516 --> 00:15:17.736
Could you describe those for the court?

cue-277
00:15:18.456 --> 00:15:20.836
-Sure, um-
-First of all, how many of the seven?

cue-278
00:15:22.256 --> 00:15:27.096
-Uh, four of the seven were successful.
-So just over 50%.

cue-279
00:15:27.096 --> 00:15:27.276
Yes.

cue-280
00:15:28.596 --> 00:15:31.236
-Go ahead.
-For the record, what, what was the amount

cue-281
00:15:31.236 --> 00:15:35.056
that Wasan and Company invested in total
in those startups?

cue-282
00:15:35.056 --> 00:15:36.136
In total, it was around

cue-283
00:15:36.876 --> 00:15:37.776
40 to 50 million.

cue-284
00:15:39.016 --> 00:15:42.716
And among the four successful ventures,
what was the nature of the success?

cue-285
00:15:44.316 --> 00:15:44.586
Um,

cue-286
00:15:45.636 --> 00:15:47.416
Cognet was acquired by Intel.

cue-287
00:15:48.156 --> 00:15:50.056
G+ was acquired by SST.

cue-288
00:15:50.996 --> 00:15:52.176
Mankind went public.

cue-289
00:15:53.636 --> 00:15:53.916
Um...

cue-290
00:16:00.465 --> 00:16:00.526
Hmm.

cue-291
00:16:01.216 --> 00:16:02.616
There's one more I'm forgetting.

cue-292
00:16:03.516 --> 00:16:06.396
Was the last of the fourth also acquired
by another company?

cue-293
00:16:06.396 --> 00:16:06.596
Yes.

cue-294
00:16:07.376 --> 00:16:09.736
Oh, I'm sorry, Nomads. Nomads was also
acquired.

cue-295
00:16:11.116 --> 00:16:15.616
What was your role personally in
connection with the investments that Wasan

cue-296
00:16:15.616 --> 00:16:16.256
and Company made?

cue-297
00:16:17.876 --> 00:16:21.286
So my job was to do the financial
forecasting for firms that we're,

cue-298
00:16:22.416 --> 00:16:23.596
we were considering investing in,

cue-299
00:16:24.456 --> 00:16:28.806
and then to raise money from the limited
partners, and then to place the money with

cue-300
00:16:28.806 --> 00:16:29.506
the firms, and then-

cue-301
00:16:30.176 --> 00:16:33.116
And of the three that failed, how much
money did you put into those?

cue-302
00:16:35.256 --> 00:16:35.696
Um,

cue-303
00:16:40.476 --> 00:16:40.976
let me think.

cue-304
00:16:48.856 --> 00:16:52.916
I'd say combined it was about 5 million
for those three.

cue-305
00:16:54.296 --> 00:16:56.116
The 40 to 50 million was yours?

cue-306
00:16:57.186 --> 00:16:58.816
-It was-
-I'm looking for apples to apples

cue-307
00:16:58.816 --> 00:16:59.436
comparison.

cue-308
00:17:00.076 --> 00:17:03.896
The 40 to 50 million was some of my money
plus money contributed by limited

cue-309
00:17:03.896 --> 00:17:06.896
-partners.
-Okay. And the same then, using that

cue-310
00:17:06.896 --> 00:17:09.416
metric, how much was invested in the
three?

cue-311
00:17:10.696 --> 00:17:15.855
So I think it was around 5 million
combined for those three, and then about

cue-312
00:17:15.856 --> 00:17:17.476
40 million went into the other

cue-313
00:17:18.136 --> 00:17:18.396
four.

cue-314
00:17:20.056 --> 00:17:20.336
Go ahead.

cue-315
00:17:21.356 --> 00:17:22.636
Of those three, um,

cue-316
00:17:23.436 --> 00:17:26.936
you said they hadn't succeeded yet, but is
one of those still existing?

cue-317
00:17:27.536 --> 00:17:32.076
One of them is still kind of on its last
legs, Gene Fluidics. Um, I, it's about to

cue-318
00:17:32.076 --> 00:17:32.576
go under.

cue-319
00:17:34.096 --> 00:17:34.746
Uh, now-

cue-320
00:17:35.516 --> 00:17:37.176
Did you c- consider that,

cue-321
00:17:38.396 --> 00:17:38.656
um,

cue-322
00:17:40.036 --> 00:17:42.136
the OpenAI

cue-323
00:17:43.256 --> 00:17:48.896
nonprofit was on its last legs about to go
under when it was valued by Hemingway?

cue-324
00:17:55.116 --> 00:17:58.536
Well, it had a very low value. That
doesn't necessarily mean it was about to

cue-325
00:17:58.536 --> 00:18:01.795
-go under.
-So you did or did not consider that fact?

cue-326
00:18:01.796 --> 00:18:06.086
Not explicitly, but I did review those,
those documents, and I did consider them

cue-327
00:18:06.856 --> 00:18:08.936
when I did the parsing of where the gains
occurred.

cue-328
00:18:12.216 --> 00:18:19.148
Would it have changed your opinion if you
had found that it had, in fact-Been

cue-329
00:18:19.148 --> 00:18:22.728
on its last legs, and that there was no
way it was going to succeed without

cue-330
00:18:22.728 --> 00:18:23.488
further investment

cue-331
00:18:28.708 --> 00:18:32.888
I don't think so, and I can give you an
example as to why. Um,

cue-332
00:18:34.348 --> 00:18:38.648
for example, Amazon did not generate a
profit for the first 15 years of its

cue-333
00:18:38.648 --> 00:18:39.228
existence.

cue-334
00:18:40.188 --> 00:18:40.368
-Mm.
-So

cue-335
00:18:41.368 --> 00:18:42.528
it raised money initially,

cue-336
00:18:43.788 --> 00:18:43.988
um,

cue-337
00:18:44.708 --> 00:18:47.468
and it's trying to build something, and
then in subsequent years it had to raise

cue-338
00:18:47.468 --> 00:18:50.888
more money, and it had to raise more money
in round three and round four and round

cue-339
00:18:50.888 --> 00:18:53.228
five. Eventually it became very
profitable.

cue-340
00:18:53.228 --> 00:18:54.618
-If it had raised-
-But the original-

cue-341
00:18:54.618 --> 00:18:57.308
... no more money, though,

cue-342
00:18:58.608 --> 00:19:02.368
-that wouldn't have changed your opinion?
-If it had raised no further money, then it

cue-343
00:19:02.368 --> 00:19:04.288
probably would have gone under at some
point.

cue-344
00:19:06.228 --> 00:19:06.688
Proceed.

cue-345
00:19:08.488 --> 00:19:09.588
Dr. Wason, um,

cue-346
00:19:10.308 --> 00:19:12.668
with respect to the questions a few
moments ago about Mr.

cue-347
00:19:13.448 --> 00:19:14.608
Musk's other companies,

cue-348
00:19:15.768 --> 00:19:20.408
for a company like SpaceX, was Musk an
outside venture capital investor or was he

cue-349
00:19:20.408 --> 00:19:22.428
-a founder?
-He was a founder.

cue-350
00:19:22.428 --> 00:19:27.288
And for a company like Tesla, was Mr. Musk
an outside venture capital or investor,

cue-351
00:19:27.288 --> 00:19:28.908
or was he a founder or near founder?

cue-352
00:19:29.968 --> 00:19:31.688
He was a near founder. He, he,

cue-353
00:19:32.448 --> 00:19:33.288
he acquired it.

cue-354
00:19:34.028 --> 00:19:39.508
And, and so do you even know that Mr. Musk
ever invests in companies as an outside

cue-355
00:19:39.508 --> 00:19:42.988
venture capital investor where he has no,
no control over the company?

cue-356
00:19:42.988 --> 00:19:43.728
Object to the form.

cue-357
00:19:44.648 --> 00:19:46.868
I don't have any visibility into what he
does with his-

cue-358
00:19:46.868 --> 00:19:48.788
Overruled. He says he doesn't know.

cue-359
00:19:50.088 --> 00:19:53.467
Uh, apart from your professional
experience, do you teach courses in

cue-360
00:19:53.468 --> 00:19:56.908
-economics and finance?
-I have previously taught at USC and at Cal

cue-361
00:19:56.908 --> 00:19:58.168
-State LA.
-What topics?

cue-362
00:19:59.128 --> 00:20:02.588
-Corporate finance and valuation.
-Have you published research in economics

cue-363
00:20:02.588 --> 00:20:05.988
-and finance?
-I've published about 25 papers in econ

cue-364
00:20:05.988 --> 00:20:06.968
journals and law reviews.

cue-365
00:20:07.788 --> 00:20:08.128
You test-

cue-366
00:20:09.508 --> 00:20:10.628
Econ journals and law,

cue-367
00:20:11.328 --> 00:20:12.068
about 25.

cue-368
00:20:13.308 --> 00:20:15.888
Have you testified before legislative
bodies?

cue-369
00:20:15.888 --> 00:20:18.268
-Yes, I have.
-On what topics?

cue-370
00:20:18.268 --> 00:20:19.658
Typically public policy,

cue-371
00:20:20.328 --> 00:20:21.678
um, economic impact studies.

cue-372
00:20:22.488 --> 00:20:25.128
And have you testified before as an expert
witness?

cue-373
00:20:25.128 --> 00:20:26.897
-Yes, I have.
-Approximately how many times?

cue-374
00:20:28.088 --> 00:20:31.328
I think at trial around 15 or 16. Um...

cue-375
00:20:35.328 --> 00:20:39.748
Returning to your methodology, can you
just provide an overview for the court of

cue-376
00:20:39.748 --> 00:20:46.548
the methodology you use to determine the
portion of the for-profit's wrongful

cue-377
00:20:46.548 --> 00:20:48.557
gains that were attributable to Mr. Musk?

cue-378
00:20:50.728 --> 00:20:55.668
Yes, there's a three-step process. I start
with the value of the for-profit.

cue-379
00:20:56.648 --> 00:21:00.228
I then apply a percentage, which is the,
um,

cue-380
00:21:02.568 --> 00:21:02.728
the,

cue-381
00:21:03.528 --> 00:21:06.708
the nonprofit's ownership stake of the
for-profit,

cue-382
00:21:07.648 --> 00:21:10.328
and then I apply Mr. Musk's percentage,

cue-383
00:21:11.908 --> 00:21:13.367
um, to the

cue-384
00:21:14.568 --> 00:21:15.788
nonprofit's piece.

cue-385
00:21:16.448 --> 00:21:21.308
And in your view, is that an appropriate
method to apply to determine the portion

cue-386
00:21:21.308 --> 00:21:25.367
of the for-profit's gains that are
attributable to Mr. Musk's investments?

cue-387
00:21:25.968 --> 00:21:27.228
-Absolutely.
-Why is that?

cue-388
00:21:28.868 --> 00:21:33.768
Well, it's a way to clearly get at the
value of his contributions relative to the

cue-389
00:21:33.768 --> 00:21:37.488
-whole. Um-
-So I'm, I'm s- still thinking about your

cue-390
00:21:37.488 --> 00:21:43.048
Amazon, uh, analogy. I take it, though,
that the Amazon analogy is different

cue-391
00:21:43.048 --> 00:21:43.638
because

cue-392
00:21:45.128 --> 00:21:49.848
Mr. Bezos stayed with Amazon as opposed to
Mr. Musk, who

cue-393
00:21:50.588 --> 00:21:52.108
abandoned OpenAI, right?

cue-394
00:21:54.228 --> 00:21:57.708
He did stay, but he has, you know, he has
since stepped down, and the value

cue-395
00:21:57.708 --> 00:22:01.908
-continues to increase. It's, it's-
-Yeah, but it had already been successful

cue-396
00:22:01.908 --> 00:22:02.768
once he stepped down.

cue-397
00:22:03.528 --> 00:22:06.088
He didn't step down when it was on its
last legs, did he?

cue-398
00:22:07.128 --> 00:22:07.228
No.

cue-399
00:22:07.968 --> 00:22:11.308
In fact, how long did he stay with it
before, between the time

cue-400
00:22:11.968 --> 00:22:16.268
it was on its last legs and the time that
he stepped down? How long was that?

cue-401
00:22:16.268 --> 00:22:17.528
Oh, a long time.

cue-402
00:22:19.288 --> 00:22:20.168
-Do you know?
-Many years.

cue-403
00:22:21.108 --> 00:22:22.868
-Over a decade?
-Yes.

cue-404
00:22:22.868 --> 00:22:23.708
Over two decades?

cue-405
00:22:27.088 --> 00:22:28.208
Probably, yes.

cue-406
00:22:29.908 --> 00:22:30.288
Continue.

cue-407
00:22:31.008 --> 00:22:31.628
Dr. Wason,

cue-408
00:22:33.048 --> 00:22:34.488
do you have an opinion about whether

cue-409
00:22:35.428 --> 00:22:38.658
OpenAI would have been able to launch its
for-profit at all

cue-410
00:22:39.307 --> 00:22:43.838
but for Mr. Musk's, uh, contributions
between 2015 and 2020?

cue-411
00:22:44.448 --> 00:22:49.128
That's not my reading of, of the record,
that he was instrumental and foundational

cue-412
00:22:49.128 --> 00:22:53.388
-to the launch of OpenAI.
-So I, I thought you were told to assume

cue-413
00:22:55.188 --> 00:22:56.448
the factual basis.

cue-414
00:22:57.848 --> 00:22:59.228
For the wrongful acts, yes.

cue-415
00:23:00.288 --> 00:23:02.328
But you were not told to assume,

cue-416
00:23:03.448 --> 00:23:04.728
uh, this issue?

cue-417
00:23:08.208 --> 00:23:09.228
Did, did you go in

cue-418
00:23:10.408 --> 00:23:14.888
depth into the factual record to make that
opinion, or were you told to assume that?

cue-419
00:23:14.888 --> 00:23:19.028
Um, honestly, I don't recall. It's

cue-420
00:23:19.028 --> 00:23:21.368
-probably both.
-Did you do the work or not?

cue-421
00:23:21.368 --> 00:23:24.828
I, I did. I looked into it. He, he did all
the primary recruiting. He made all the

cue-422
00:23:24.828 --> 00:23:27.098
-original contributions.
-So did you then-

cue-423
00:23:27.098 --> 00:23:28.588
-It was his-
-... listen to the trial testimony?

cue-424
00:23:29.988 --> 00:23:32.568
-I listened to some of it.
-What did you listen to?

cue-425
00:23:33.228 --> 00:23:36.188
Well, there was an audio feed that I had
that I was listening to.

cue-426
00:23:36.188 --> 00:23:37.808
Did you listen to particular,

cue-427
00:23:38.848 --> 00:23:39.048
um,

cue-428
00:23:40.128 --> 00:23:44.068
to any particular examinations relative to
your opinion today?

cue-429
00:23:47.968 --> 00:23:48.388
Um,

cue-430
00:23:49.088 --> 00:23:53.028
no, but, but they provided me with the,
with the transcripts from the trial.

cue-431
00:23:53.028 --> 00:23:55.448
-Okay, so-
-So I had those, and I did review those.

cue-432
00:23:55.448 --> 00:23:57.288
-Did you read them all?
-I, I, I did.

cue-433
00:23:57.928 --> 00:23:58.068
Okay.

cue-434
00:24:00.608 --> 00:24:04.688
So I'd like to know what the factual basis
is for any opinion that is factual

cue-435
00:24:05.308 --> 00:24:08.588
because I was under the impression that he
was told to assume liability.

cue-436
00:24:09.548 --> 00:24:14.548
That impression was correct, Your Honor,
but Dr. Wason, in c- computing or forming

cue-437
00:24:14.548 --> 00:24:18.948
an opinion about wrongful gains, did you
consider the non-monetary contributions

cue-438
00:24:18.948 --> 00:24:22.088
that Mr. Musk made to the nonprofit in its
early years?

cue-439
00:24:22.088 --> 00:24:24.688
-Yes, I did. I mean-
-But did you feed those to him, or did he

cue-440
00:24:24.688 --> 00:24:28.388
come up with those on his own? That's the
distinction I'm trying to make, Mr. Kryj.

cue-441
00:24:28.388 --> 00:24:33.268
So you need to make sure that those
questions clearly

cue-442
00:24:33.268 --> 00:24:39.412
delineate-His review of the evidence
versus what you, the lawyers, are telling

cue-443
00:24:39.412 --> 00:24:40.312
him to assume

cue-444
00:24:42.352 --> 00:24:42.712
Did we,

cue-445
00:24:43.332 --> 00:24:46.172
Dr. Wason, did your lawyers tell you to
assume that

cue-446
00:24:46.832 --> 00:24:52.252
Elon Musk made important non-monetary
contributions to OpenAI, or did you come

cue-447
00:24:52.252 --> 00:24:55.171
to that conclusion based on your own
analysis?

cue-448
00:24:55.172 --> 00:25:00.132
I, I came to that conclusion on my own.
You guys asked me to determine the value

cue-449
00:25:00.132 --> 00:25:01.212
of his contributions.

cue-450
00:25:02.112 --> 00:25:06.432
And as I read the record, and I was doing
my work, th- his contributions are

cue-451
00:25:06.432 --> 00:25:11.992
monetary and non-monetary. And so I
pursued both of those avenues of analysis.

cue-452
00:25:11.992 --> 00:25:14.232
And so in, in performing that analysis,

cue-453
00:25:14.232 --> 00:25:18.952
you made your own determinations about the
importance of those contributions to

cue-454
00:25:18.952 --> 00:25:20.432
-OpenAI's success?
-Yes.

cue-455
00:25:22.792 --> 00:25:22.952
Um,

cue-456
00:25:23.592 --> 00:25:24.552
turning to the first step

cue-457
00:25:25.232 --> 00:25:30.472
of your three-step analysis, what is your
opinion of the value of the OpenAI

cue-458
00:25:30.472 --> 00:25:31.072
for-profit?

cue-459
00:25:31.802 --> 00:25:35.012
Well, at the time of the report, October
twenty twenty-five, it was five hundred

cue-460
00:25:35.012 --> 00:25:35.312
billion.

cue-461
00:25:36.832 --> 00:25:39.372
What did you principally rely on to
estimate that figure?

cue-462
00:25:41.812 --> 00:25:42.072
Um,

cue-463
00:25:43.172 --> 00:25:48.251
Microsoft and OpenAI had entered into a
agreement whereby the firm would be,

cue-464
00:25:49.052 --> 00:25:49.272
um,

cue-465
00:25:51.272 --> 00:25:53.212
sort of reconstituted as a for-profit
entity,

cue-466
00:25:54.012 --> 00:25:57.272
as a public benefit corporation. And as
part of that

cue-467
00:25:58.972 --> 00:25:59.592
agreement,

cue-468
00:26:00.292 --> 00:26:04.872
a value, a market price was, was arrived
at of five hundred billion.

cue-469
00:26:04.872 --> 00:26:08.352
Uh, I will show you plaintiff's exhibit
two eighty-six, which was introduced into

cue-470
00:26:08.352 --> 00:26:12.872
evidence earlier this morning, and in
particular, the panel on the right. What

cue-471
00:26:12.872 --> 00:26:14.832
does that portion of the document show?

cue-472
00:26:17.872 --> 00:26:22.292
Uh, it just came up. At the top it says
the entire value is five hundred billion.

cue-473
00:26:22.292 --> 00:26:24.212
You can put... You can display it.

cue-474
00:26:30.292 --> 00:26:34.092
Uh, in addition to the, this figure from
the public benefit

cue-475
00:26:34.712 --> 00:26:38.972
corporation conversion transaction, did
you also look at other data sources to

cue-476
00:26:38.972 --> 00:26:42.332
help you evaluate the value of OpenAI
for-profit?

cue-477
00:26:42.951 --> 00:26:47.782
Yes, I did a number of things. Um, one, I
created my own discounted cash flow model.

cue-478
00:26:47.782 --> 00:26:54.622
Two, uh, some of the employee shares had
been tendered for sale, um,

cue-479
00:26:55.872 --> 00:26:57.372
to third parties like SoftBank.

cue-480
00:26:57.992 --> 00:27:00.792
Those had also set a market price of
around five hundred billion.

cue-481
00:27:01.632 --> 00:27:04.332
Um, in addition, some of those shares are
traded on,

cue-482
00:27:05.352 --> 00:27:09.382
um, they're not exactly exchanges, but
Notice and Forge. Um,

cue-483
00:27:10.552 --> 00:27:12.422
Notice and Forge, uh, they're companies,

cue-484
00:27:13.592 --> 00:27:18.272
um, where, where you can sort of buy
non-trading shares,

cue-485
00:27:18.972 --> 00:27:20.752
also with values around five hundred
billion.

cue-486
00:27:22.272 --> 00:27:23.772
Uh, we can take this exhibit down.

cue-487
00:27:24.772 --> 00:27:29.332
S- since October twenty twenty-five, have
other developments impacted the value of

cue-488
00:27:29.332 --> 00:27:33.392
-the OpenAI for-profit?
-Yes. The for-profit has since had a round

cue-489
00:27:33.392 --> 00:27:34.192
of financing

cue-490
00:27:35.052 --> 00:27:38.832
that set a value at eight hundred and
forty to eight hundred and fifty billion,

cue-491
00:27:39.552 --> 00:27:40.992
depending on various reports.

cue-492
00:27:42.432 --> 00:27:46.042
To your knowledge, does OpenAI have any
other plans that may affect its valuation?

cue-493
00:27:46.042 --> 00:27:49.092
There have been press articles indicating

cue-494
00:27:49.092 --> 00:27:53.332
they're trending to an IPO, where the
value, um, is expected to be even higher.

cue-495
00:27:54.892 --> 00:28:00.352
W- what impact would those developments
have on your opinion about OpenAI's

cue-496
00:28:00.352 --> 00:28:01.021
wrongful gains?

cue-497
00:28:02.112 --> 00:28:04.712
They would increase the value of those
holdings dramatically.

cue-498
00:28:06.552 --> 00:28:11.512
Dr. Wason, let's turn to step two of your
three-step analysis. You testified earlier

cue-499
00:28:11.512 --> 00:28:16.172
that you estimated the portion of the
OpenAI for-profit's value that's

cue-500
00:28:16.172 --> 00:28:18.752
attributable to OpenAI nonprofit.

cue-501
00:28:20.192 --> 00:28:24.272
What different entities hold interests in
OpenAI for-profit?

cue-502
00:28:26.112 --> 00:28:27.612
So Microsoft holds a stake.

cue-503
00:28:28.232 --> 00:28:31.152
Uh, the OpenAI nonprofit holds a stake.

cue-504
00:28:32.112 --> 00:28:35.232
There are, um, first closed limited
partners that hold a stake.

cue-505
00:28:35.992 --> 00:28:40.912
There are employees that hold stakes and
employee vehicles that also hold stakes.

cue-506
00:28:40.912 --> 00:28:45.852
Did those other investors and employees
also contribute value to OpenAI

cue-507
00:28:45.852 --> 00:28:46.992
-for-profit?
-Yes.

cue-508
00:28:47.912 --> 00:28:54.511
So w- when you a- allocated, um, that
value between OpenAI nonprofit and those

cue-509
00:28:54.512 --> 00:28:58.212
other stakeholders, why did you do that at
step two of your analysis?

cue-510
00:28:59.072 --> 00:29:04.131
Because those other entities that created
value, um, I'm letting them keep their

cue-511
00:29:04.132 --> 00:29:07.772
value. I'm not assuming any wrongful acts
on their behalf in my analysis.

cue-512
00:29:09.312 --> 00:29:14.052
What did you conclude about the portion of
OpenAI for-profit's value that's

cue-513
00:29:14.052 --> 00:29:18.432
attributable to the nonprofit as opposed
to the other investors and employees?

cue-514
00:29:19.472 --> 00:29:22.012
It's somewhere between twenty-six and
twenty-nine percent.

cue-515
00:29:22.632 --> 00:29:26.112
What information did you rely on to reach
that conclusion?

cue-516
00:29:26.112 --> 00:29:30.772
Primarily a cap table that the parties
themselves, Microsoft and OpenAI, had, had

cue-517
00:29:30.772 --> 00:29:33.232
-made public.
-Your Honor, may I show the witness

cue-518
00:29:33.232 --> 00:29:36.432
plaintiff's exhibit two eighty-six that
was introduced this morning?

cue-519
00:29:36.432 --> 00:29:36.872
You may.

cue-520
00:29:37.472 --> 00:29:39.982
And if I can focus you on the table in the
upper left.

cue-521
00:29:39.982 --> 00:29:40.832
And if it can be published,

cue-522
00:29:43.612 --> 00:29:43.842
-um-
-Um,

cue-523
00:29:44.552 --> 00:29:48.632
this is labeled "OpenAI Summary Post
Recapitalization Cap Table."

cue-524
00:29:49.632 --> 00:29:51.732
Dr. Wason, what is this chart?

cue-525
00:29:52.712 --> 00:29:55.672
It's the capitalization table that shows
the

cue-526
00:29:56.652 --> 00:29:58.632
ownership percentages for the various
parties.

cue-527
00:29:59.732 --> 00:30:05.892
At the top, there's a row labeled NFP,
including NFP FCLP. What does that

cue-528
00:30:05.892 --> 00:30:09.032
-represent?
-That's the nonprofit plus the first closed

cue-529
00:30:09.032 --> 00:30:14.712
-limited partners.
-Um, the... Well, well, does the nonprofit

cue-530
00:30:14.712 --> 00:30:19.032
have a stake of the for-profit in its
capacity as one of the first closed

cue-531
00:30:19.032 --> 00:30:19.852
-holders?
-No.

cue-532
00:30:20.532 --> 00:30:24.692
And so that, um, what does the first row,

cue-533
00:30:25.612 --> 00:30:25.622
uh,

cue-534
00:30:26.232 --> 00:30:29.912
show you about the size of the nonprofit
stake in the for-profit?

cue-535
00:30:30.992 --> 00:30:34.292
Well, if you look at the middle column,
the diluted for warrant present value

cue-536
00:30:35.212 --> 00:30:40.240
percentage, you get twenty-four point
seven percentTo which you would add the

cue-537
00:30:40.240 --> 00:30:44.160
4.5% to get 29.2%.

cue-538
00:30:45.200 --> 00:30:49.860
And you referenced the second row there,
the 4.5%, which is labeled NFP warrant

cue-539
00:30:49.860 --> 00:30:51.740
shares. W- what does that represent?

cue-540
00:30:52.400 --> 00:30:57.480
Warrants are just options that the NFP
holds that they could exercise. Um,

cue-541
00:31:00.560 --> 00:31:05.420
there are options. The warrants are
options that the nonprofit holds.

cue-542
00:31:06.660 --> 00:31:07.420
And where did the,

cue-543
00:31:08.040 --> 00:31:09.960
or how did the nonprofit acquire those
warrants?

cue-544
00:31:10.740 --> 00:31:11.220
By grant.

cue-545
00:31:11.860 --> 00:31:14.400
In connection with the, the public benefit
company

cue-546
00:31:15.320 --> 00:31:16.660
-recapitalization?
-Yes.

cue-547
00:31:17.820 --> 00:31:21.480
Uh, and I think you just mentioned this,
but the sum of those, those first two rows

cue-548
00:31:21.480 --> 00:31:21.740
is,

cue-549
00:31:22.360 --> 00:31:25.539
-uh, 29.2%, is that correct?
-Yes.

cue-550
00:31:25.540 --> 00:31:25.680
Um,

cue-551
00:31:27.920 --> 00:31:32.440
w- what does the third column, the one
labeled fully diluted percent for warrant

cue-552
00:31:32.440 --> 00:31:32.880
PV,

cue-553
00:31:33.500 --> 00:31:35.720
EV sponsored pool, and EIP

cue-554
00:31:36.920 --> 00:31:37.300
reflect?

cue-555
00:31:38.000 --> 00:31:39.480
So some additional shares,

cue-556
00:31:40.120 --> 00:31:43.380
-if you look down towards the bottom-
-Hold on, let me get a hard copy.

cue-557
00:31:54.180 --> 00:31:57.700
I apologize in advance, Your Honor, but
the hard copy's gonna be very small

cue-558
00:31:57.700 --> 00:32:01.680
because this document had a lot of
information on it, and so we zoomed in on

cue-559
00:32:01.680 --> 00:32:04.760
it for the screen, but it may be
challenging to read in hard copy.

cue-560
00:32:10.780 --> 00:32:13.640
Uh, and I'm afraid I don't think we did in
the witness binders, Your Honor.

cue-561
00:32:19.180 --> 00:32:19.340
Um,

cue-562
00:32:19.940 --> 00:32:21.640
you referenced additional, um,

cue-563
00:32:22.340 --> 00:32:26.660
pools and incentive plans in the third
column. To your knowledge, had those plans

cue-564
00:32:26.660 --> 00:32:31.110
actually been, uh, funded with equity
grants at the time of this cap table?

cue-565
00:32:31.110 --> 00:32:35.160
Not at the time, but, but they could be
potentially, which is why there would be

cue-566
00:32:35.160 --> 00:32:36.130
additional dilution.

cue-567
00:32:36.940 --> 00:32:40.740
And I, uh, you may have mentioned already,
but what is the sum of the first two rows

cue-568
00:32:40.740 --> 00:32:43.520
-for that third column?
-26.2%.

cue-569
00:32:44.200 --> 00:32:49.279
So based on those two columns, what is
your opinion about the portion of the

cue-570
00:32:49.279 --> 00:32:50.080
for-profit

cue-571
00:32:50.780 --> 00:32:53.600
that is attributable to the nonprofit?

cue-572
00:32:54.240 --> 00:33:00.600
-It's between 26.2% and 29.2%.
-And I take it this is not in his written

cue-573
00:33:00.600 --> 00:33:03.260
-testimony either.
-It is, Your Honor. I can, I'm happy to

cue-574
00:33:03.260 --> 00:33:03.820
direct you to that.

cue-575
00:33:04.820 --> 00:33:05.100
I see it.

cue-576
00:33:06.280 --> 00:33:07.340
Paragraph 54.

cue-577
00:33:18.980 --> 00:33:19.220
Um,

cue-578
00:33:19.920 --> 00:33:23.160
that's exactly right, Your Honor. In, in
effect, the whole, the whole section from

cue-579
00:33:23.160 --> 00:33:24.380
paragraph 49 to

cue-580
00:33:25.260 --> 00:33:27.640
paragraph 71 covers this material.

cue-581
00:33:28.740 --> 00:33:29.120
The, um...

cue-582
00:33:30.880 --> 00:33:36.120
Does this table also indicate Microsoft's
share of the for-profit?

cue-583
00:33:36.120 --> 00:33:38.660
-Yes, it does.
-What does it indicate that share as?

cue-584
00:33:39.720 --> 00:33:42.380
It's 25.5%,

cue-585
00:33:43.300 --> 00:33:46.240
um, to 22.9% diluted.

cue-586
00:33:46.880 --> 00:33:50.920
And does this table also reflect the share
that the employees have through the

cue-587
00:33:50.920 --> 00:33:54.480
-existing employee vehicle, ESTES?
-Yes, it does.

cue-588
00:33:54.480 --> 00:33:55.100
What is that share?

cue-589
00:33:56.840 --> 00:34:03.500
Uh, the employee vehicle outstanding
amount is 25.3% to 22.7%.

cue-590
00:34:03.500 --> 00:34:08.300
And so conducting this second step of your
analysis, were you basically allocating

cue-591
00:34:08.300 --> 00:34:12.500
between the nonprofit's share and the
share of these other investors and

cue-592
00:34:12.500 --> 00:34:13.380
-employees?
-Yes.

cue-593
00:34:16.020 --> 00:34:17.740
Uh, do you have a graphic that would,

cue-594
00:34:18.400 --> 00:34:18.560
uh,

cue-595
00:34:19.200 --> 00:34:20.400
-illustrate that?
-Yes.

cue-596
00:34:22.620 --> 00:34:25.840
Uh, Your Honor, may I show the witness
this demonstrative from his written

cue-597
00:34:25.840 --> 00:34:26.240
testimony?

cue-598
00:34:28.069 --> 00:34:28.069
I,

cue-599
00:34:29.160 --> 00:34:31.740
I don't understand the question. You're
showing it to him. Yes.

cue-600
00:34:31.740 --> 00:34:33.680
Uh, this is a different exhibit. This
one's a demonstrative.

cue-601
00:34:34.660 --> 00:34:35.780
Okay, go ahead.

cue-602
00:34:36.640 --> 00:34:38.440
Um, and may, may also publish it to the
public.

cue-603
00:34:41.340 --> 00:34:42.900
What does this graphic show, Dr. Wason?

cue-604
00:34:43.740 --> 00:34:48.560
So this pie chart shows the different
holdings of the total amount, which is

cue-605
00:34:48.560 --> 00:34:51.220
five hundred billion. So the whole pie is
five hundred billion.

cue-606
00:34:52.040 --> 00:34:56.999
Microsoft's piece is twenty-three to
twenty-six percent.

cue-607
00:34:57.000 --> 00:34:58.680
Isn't this paragraph 71?

cue-608
00:34:59.720 --> 00:35:00.220
It is, Your Honor.

cue-609
00:35:01.920 --> 00:35:05.100
-Okay. That, that's what I asked.
-I misunderstood. I apologize.

cue-610
00:35:07.340 --> 00:35:07.680
Go ahead.

cue-611
00:35:08.560 --> 00:35:10.560
The, the OpenAI nonprofit

cue-612
00:35:11.220 --> 00:35:14.120
piece in blue is the twenty-six to
twenty-nine percent.

cue-613
00:35:17.400 --> 00:35:20.660
Dr. Wason, turning to the third step of
your three-step analysis,

cue-614
00:35:21.920 --> 00:35:26.840
uh, you mentioned that you determined the
portion of OpenAI nonprofit's value that's

cue-615
00:35:26.840 --> 00:35:29.220
attributable to Elon's contributions.

cue-616
00:35:29.860 --> 00:35:33.860
What types of contributions did Elon make
to the nonprofit?

cue-617
00:35:33.860 --> 00:35:37.380
He made both monetary and non-monetary
contributions.

cue-618
00:35:37.380 --> 00:35:39.600
Who else contributed value to the
nonprofit?

cue-619
00:35:41.300 --> 00:35:42.180
Um, other

cue-620
00:35:43.020 --> 00:35:48.220
charitable donations were made. Um, other
employees made contributions.

cue-621
00:35:49.700 --> 00:35:55.080
In your opinion, what portion of OpenAI
nonprofit's value is attributable to

cue-622
00:35:55.080 --> 00:35:56.180
Elon's contributions?

cue-623
00:35:56.980 --> 00:35:59.130
Somewhere between 50 and 75%.

cue-624
00:35:59.800 --> 00:36:05.840
Does that mean that Elon is responsible
for 50 to 75% of OpenAI's entire five

cue-625
00:36:05.840 --> 00:36:11.050
-hundred billion dollar valuation?
-No, he would capture 50 to 75% just of the

cue-626
00:36:11.050 --> 00:36:12.600
blue piece of the pie.

cue-627
00:36:13.600 --> 00:36:17.700
So for the financial contributions, how
did you get information about the amounts

cue-628
00:36:17.700 --> 00:36:18.840
that Elon contributed?

cue-629
00:36:20.440 --> 00:36:25.920
Uh, I was provided with tax forms, Form
990s, basically, that indicate,

cue-630
00:36:26.900 --> 00:36:28.920
um, all the charitable contributions into
the firm.

cue-631
00:36:29.740 --> 00:36:34.540
What did those tax forms il- uh,
illustrate to you about the share of

cue-632
00:36:34.540 --> 00:36:35.660
OpenAI's funding

cue-633
00:36:36.340 --> 00:36:41.300
in 2016 and 2017 that came from Elon as
opposed to other donors?

cue-634
00:36:42.532 --> 00:36:45.192
That Mr. Musk had contributed sixty
percent

cue-635
00:36:45.932 --> 00:36:47.921
of all the contributions in the first two
years

cue-636
00:36:49.092 --> 00:36:49.692
W-what did those-

cue-637
00:36:50.512 --> 00:36:50.972
Two years

cue-638
00:36:51.952 --> 00:36:56.532
What did those firms indicate to you about
the percentage of OpenAI's funding that

cue-639
00:36:56.532 --> 00:36:59.762
came from Elon during the entire history
of the charity?

cue-640
00:37:00.372 --> 00:37:01.912
He was just under thirty percent.

cue-641
00:37:02.732 --> 00:37:08.692
As between those two numbers, which one do
you consider more relevant to, uh, th-

cue-642
00:37:08.692 --> 00:37:10.612
the value that was contributed to OpenAI?

cue-643
00:37:12.992 --> 00:37:16.172
Well, I think they're both relevant
figures. They're both, you know, actual

cue-644
00:37:16.172 --> 00:37:21.152
hard numbers. Um, but if you have to land
somewhere, I would tend towards the sixty

cue-645
00:37:21.152 --> 00:37:22.652
-percent figure.
-Why is that?

cue-646
00:37:23.292 --> 00:37:27.812
For a variety of reasons, um, which we'll
get into, but for one thing, the early

cue-647
00:37:27.812 --> 00:37:30.232
money is more valuable than the later
money typically.

cue-648
00:37:31.092 --> 00:37:32.812
-Um, and that's really-
-But if it all runs out?

cue-649
00:37:34.992 --> 00:37:36.912
-If it all runs out-
-If it almost did here.

cue-650
00:37:39.892 --> 00:37:42.952
Like I said, last legs, all runs out, then
what?

cue-651
00:37:44.252 --> 00:37:47.492
If it all ran out, and then it folded,
then there would be nothing left.

cue-652
00:37:49.012 --> 00:37:51.502
So how did you figure that into the
analysis? [laughs]

cue-653
00:37:52.392 --> 00:37:57.712
I didn't. It's like y- it's like if you're
building a fire, and, um, the first

cue-654
00:37:57.712 --> 00:38:02.812
person who builds the little twigs and
strikes a match and lights it has created

cue-655
00:38:02.812 --> 00:38:07.312
the fire. Now, if others come in later and
add logs and cut down trees and make a

cue-656
00:38:07.312 --> 00:38:11.472
huge bonfire out of it, without the
original match strike, you have no fire.

cue-657
00:38:12.292 --> 00:38:15.532
And even if it's very small, and it's very
small, and it's very small for a period

cue-658
00:38:15.532 --> 00:38:15.952
of time,

cue-659
00:38:17.232 --> 00:38:19.742
it's still the predicate act which creates
the big bonfire.

cue-660
00:38:22.312 --> 00:38:23.612
Dr. Wason, at the time,

cue-661
00:38:24.312 --> 00:38:24.552
um,

cue-662
00:38:25.672 --> 00:38:28.392
the judge referenced that there was
evidence that OpenAI

cue-663
00:38:29.092 --> 00:38:32.932
would start to need more money around
twenty nineteen. Had OpenAI already

cue-664
00:38:32.932 --> 00:38:34.872
achieved a number of milestones by that
point?

cue-665
00:38:36.892 --> 00:38:42.052
-Like technical milestones? Yes. Yes.
-Um, and how does that compare to the

cue-666
00:38:42.052 --> 00:38:46.332
situation OpenAI was in when it was
initially set up in December twenty

cue-667
00:38:46.332 --> 00:38:47.532
-fifteen?
-Well,

cue-668
00:38:49.452 --> 00:38:52.652
I mean, there was nothing when it was
originally set up. It was just an idea.

cue-669
00:38:52.652 --> 00:38:54.732
So if you were looking for future
investors-

cue-670
00:38:54.732 --> 00:38:58.332
But, but you've heard Dr. Sutskever's
testimony, right?

cue-671
00:38:59.412 --> 00:39:01.452
-I, I believe I-
-Listened to it or you read it-

cue-672
00:39:01.452 --> 00:39:02.872
-Yes
-... because e- it's gotten lots of

cue-673
00:39:02.872 --> 00:39:03.612
publication.

cue-674
00:39:04.352 --> 00:39:07.232
-Yes. Yes, Your Honor.
-That it was an ant,

cue-675
00:39:09.012 --> 00:39:14.552
that the technology, the value of the
technology at that time was effectively

cue-676
00:39:14.552 --> 00:39:15.432
the size of an ant.

cue-677
00:39:16.992 --> 00:39:18.591
-Did you read that?
-I did.

cue-678
00:39:18.592 --> 00:39:21.272
-And how does it affect your testimony?
-It does not.

cue-679
00:39:23.212 --> 00:39:27.012
-Proceed.
-Dr. Wason, would the cat have existed if

cue-680
00:39:27.012 --> 00:39:28.132
the ants didn't come first?

cue-681
00:39:30.812 --> 00:39:33.012
-Objection, beyond the scope.
-Sustained.

cue-682
00:39:34.372 --> 00:39:35.032
Dr. Wason,

cue-683
00:39:35.852 --> 00:39:36.112
when

cue-684
00:39:37.092 --> 00:39:42.012
was OpenAI a riskier proposition to
investors? Back in twenty fifteen where it

cue-685
00:39:42.012 --> 00:39:44.632
-was-
-Investors, is that what you're asking, or

cue-686
00:39:44.632 --> 00:39:46.012
charitable donors?

cue-687
00:39:46.752 --> 00:39:50.872
Thank you, Your Honor. When was-- when
would OpenAI have appeared to be a riskier

cue-688
00:39:50.872 --> 00:39:55.712
proposition for people contributing
money, twenty sixteen or twenty nineteen?

cue-689
00:39:57.292 --> 00:39:57.552
Well,

cue-690
00:39:58.552 --> 00:40:00.631
actually, can, can you explain that to me?

cue-691
00:40:01.472 --> 00:40:02.012
That is,

cue-692
00:40:03.432 --> 00:40:08.452
how you leap from the fact that he made
investments in a charity

cue-693
00:40:10.072 --> 00:40:10.432
to

cue-694
00:40:11.472 --> 00:40:13.052
a later entity that was

cue-695
00:40:13.932 --> 00:40:14.652
not a charity.

cue-696
00:40:17.692 --> 00:40:18.092
W-was he--

cue-697
00:40:18.712 --> 00:40:23.592
y-you seem to assume that his
contributions to a charity

cue-698
00:40:24.752 --> 00:40:28.312
should be treated like his contributions
to a startup.

cue-699
00:40:32.172 --> 00:40:35.612
-Not explicitly. I-
-Well, implicitly, that's what you-- that's

cue-700
00:40:35.612 --> 00:40:36.712
why I used the word assume.

cue-701
00:40:39.512 --> 00:40:40.592
Well, I'm trying to value--

cue-702
00:40:41.572 --> 00:40:42.612
I'm trying to capture the,

cue-703
00:40:43.392 --> 00:40:47.712
-the value of his contributions.
-But they were, they were contributions to

cue-704
00:40:47.712 --> 00:40:51.892
-a charity.
-Yes. But those contributions have value-

cue-705
00:40:51.892 --> 00:40:52.752
In a case where he got no return

cue-706
00:40:53.732 --> 00:40:53.732
...

cue-707
00:40:54.812 --> 00:40:58.771
as originally set up, right. But then when
it converts to a for-profit, I, my

cue-708
00:40:58.772 --> 00:41:01.651
understanding is that he has an
expectation now of capturing-

cue-709
00:41:01.652 --> 00:41:04.872
Well, who told you that his current
expectation

cue-710
00:41:05.612 --> 00:41:07.412
should have any value based upon

cue-711
00:41:09.052 --> 00:41:11.372
a a- as compared to his original
expectation?

cue-712
00:41:12.292 --> 00:41:15.092
Well, that's, that's, that's the
assignment I was given by counsel.

cue-713
00:41:15.092 --> 00:41:15.892
I see. All right.

cue-714
00:41:16.582 --> 00:41:16.952
Proceed.

cue-715
00:41:17.732 --> 00:41:21.312
Dr. Wason, just to be clear, did counsel
instruct you that you should base your

cue-716
00:41:21.312 --> 00:41:25.412
analysis on Mr. Musk's current
expectations about what he would have

cue-717
00:41:25.412 --> 00:41:28.232
received had this been a for-profit
venture?

cue-718
00:41:28.232 --> 00:41:28.262
No.

cue-719
00:41:29.252 --> 00:41:35.312
Did, did counsel instruct you to determine
the portion of the nonprofit's value that

cue-720
00:41:35.312 --> 00:41:38.832
can be attributed to Mr. Musk's
contributions as opposed to contributions

cue-721
00:41:38.832 --> 00:41:39.912
-by other parties?
-Yes.

cue-722
00:41:43.832 --> 00:41:47.852
Was another factor that you considered in
your analysis a pro forma cap table?

cue-723
00:41:48.552 --> 00:41:49.952
-Yes.
-What was that?

cue-724
00:41:51.352 --> 00:41:54.032
Um, that was a document that I was
provided,

cue-725
00:41:54.792 --> 00:41:55.052
um,

cue-726
00:41:57.532 --> 00:42:01.142
that, that showed relative, um, stakes.

cue-727
00:42:01.852 --> 00:42:04.832
To your knowledge, what were the
circumstances in which that document was

cue-728
00:42:04.832 --> 00:42:05.212
created?

cue-729
00:42:06.072 --> 00:42:07.792
So my understanding is that, um,

cue-730
00:42:09.152 --> 00:42:11.432
Mr. Musk and, and the OpenAI parties

cue-731
00:42:12.132 --> 00:42:16.182
were contemplating converting the firm to
a f- for-profit entity,

cue-732
00:42:17.012 --> 00:42:20.292
and they were trying to determine who
would own what, um,

cue-733
00:42:22.652 --> 00:42:24.052
share, what percentage of shares.

cue-734
00:42:24.992 --> 00:42:25.872
And Mr.,

cue-735
00:42:26.852 --> 00:42:28.212
I believe, Brockman and,

cue-736
00:42:28.832 --> 00:42:34.472
and Sutskever presented an option to Mr.
Musk. My understanding, the parties agreed

cue-737
00:42:34.472 --> 00:42:35.912
as to the division of,

cue-738
00:42:36.632 --> 00:42:37.352
of shares,

cue-739
00:42:38.032 --> 00:42:41.432
but the deal ultimately fell apart over a
disagreement on board seats.

cue-740
00:42:43.552 --> 00:42:47.716
On board seats?Your Honor, I'd like to
show, um,

cue-741
00:42:48.576 --> 00:42:53.476
the witness what we marked as exhibit 373,
but this is a, a table that's included in

cue-742
00:42:53.476 --> 00:42:54.786
his written testimony,

cue-743
00:42:55.776 --> 00:42:57.556
uh, which Your Honor can find at,

cue-744
00:42:58.636 --> 00:43:02.236
uh, paragraph 108 of the written
testimony. Is it okay if I put that on the

cue-745
00:43:02.236 --> 00:43:02.956
-screen?
-You may.

cue-746
00:43:04.656 --> 00:43:06.396
Dr. Wason, what does this table represent?

cue-747
00:43:08.656 --> 00:43:08.716
Uh,

cue-748
00:43:10.696 --> 00:43:10.856
yeah.

cue-749
00:43:13.076 --> 00:43:14.296
This is the,

cue-750
00:43:15.196 --> 00:43:19.456
as I understand it, the agreement between
the parties where they discussed who would

cue-751
00:43:19.456 --> 00:43:20.076
own what

cue-752
00:43:21.036 --> 00:43:26.376
-percentage of a for-profit entity. What-
-How did you factor into the, um, into your

cue-753
00:43:26.376 --> 00:43:30.806
analysis that he, uh, that all of this
assumed he was going to give,

cue-754
00:43:31.976 --> 00:43:33.656
what's that top number, 100 billion?

cue-755
00:43:35.516 --> 00:43:37.576
-That's, those are shares.
-Shares.

cue-756
00:43:38.316 --> 00:43:42.976
You, you understood that he was going to
contribute a, a billion dollars.

cue-757
00:43:44.616 --> 00:43:45.756
-Did you understand that?
-I-

cue-758
00:43:45.756 --> 00:43:46.676
To make the venture

cue-759
00:43:47.956 --> 00:43:49.736
-succeed?
-Yes, I believe all... Well,

cue-760
00:43:50.376 --> 00:43:52.536
I thought it was 100 million, but I think
all the parties

cue-761
00:43:53.216 --> 00:43:55.336
had agreed to contribute additional funds.

cue-762
00:43:56.016 --> 00:43:59.236
He, Mr. Musk, agreed to give a billion
dollars.

cue-763
00:43:59.236 --> 00:43:59.436
Okay.

cue-764
00:44:00.216 --> 00:44:02.156
Do you have that understanding or not?

cue-765
00:44:02.796 --> 00:44:05.616
Y- Y- Your, Your Honor, may I interject
here, because I think we're crossing wires

cue-766
00:44:05.616 --> 00:44:07.536
-on two different time periods.
-All right, go ahead.

cue-767
00:44:08.336 --> 00:44:12.456
Dr. Wason, do you know whether in 2015
when OpenAI was

cue-768
00:44:13.896 --> 00:44:18.776
first launched and put up a public blog
post, whether that blog post included an

cue-769
00:44:18.776 --> 00:44:22.016
aspirational number of, that, that OpenAI
planned to raise?

cue-770
00:44:22.856 --> 00:44:24.995
-Yes.
-Uh, and does that number have anything to

cue-771
00:44:24.996 --> 00:44:28.896
do with the numbers that are shown on this
2017 pro forma cap table?

cue-772
00:44:28.896 --> 00:44:29.076
No.

cue-773
00:44:30.056 --> 00:44:36.215
Uh, and so, um, as you noted, uh, this cap
table listed a $100 million investment

cue-774
00:44:36.216 --> 00:44:38.336
for Musk. What did it list for the other
founders?

cue-775
00:44:39.616 --> 00:44:39.776
Um,

cue-776
00:44:41.176 --> 00:44:42.436
10 million for Altman,

cue-777
00:44:43.496 --> 00:44:46.536
uh, 12 million for Sutskever, 10 million
for Brockman.

cue-778
00:44:47.156 --> 00:44:48.976
-And-
-And did it, did it also list equity grants

cue-779
00:44:48.976 --> 00:44:50.396
-for those co-founders?
-Yes.

cue-780
00:44:51.276 --> 00:44:55.995
And based on, uh, this contemplated
structure, what would Musk's ownership

cue-781
00:44:56.696 --> 00:44:58.376
interest have been in this,

cue-782
00:44:59.056 --> 00:45:03.356
-uh, contemplated entity?
-He would've held 52.4%.

cue-783
00:45:05.416 --> 00:45:08.996
-Uh, in addition to this-
-What did he agree at this time then

cue-784
00:45:10.296 --> 00:45:13.836
-to, what did he commit to fund?
-100 million.

cue-785
00:45:16.396 --> 00:45:18.436
-Million.
-But all the parties agreed at this time to

cue-786
00:45:18.436 --> 00:45:20.736
contribute the funds that are shown here,

cue-787
00:45:21.356 --> 00:45:23.496
and those contributions were sort of in,

cue-788
00:45:24.416 --> 00:45:28.116
were proportional to the amounts that had
alr- already been contributed.

cue-789
00:45:29.516 --> 00:45:31.616
So he was sort of gonna maintain his, his

cue-790
00:45:32.316 --> 00:45:37.576
30 to 60% level of monetary contributions.
This deal never went forward,

cue-791
00:45:38.256 --> 00:45:41.036
but it's still a really critical piece of
information because

cue-792
00:45:42.136 --> 00:45:46.196
since the monetary contributions were
envisioned to be in the same proportion,

cue-793
00:45:46.196 --> 00:45:49.636
you can ignore them and focus in on the
52.4%.

cue-794
00:45:49.636 --> 00:45:52.736
Well, assuming that you've got an
operating entity.

cue-795
00:45:55.936 --> 00:45:57.056
Which they did at the time.

cue-796
00:45:57.696 --> 00:46:01.856
Your Honor, I, I move to strike Dr.
Wason's prior answer as lacking in

cue-797
00:46:01.856 --> 00:46:05.456
foundation and inconsistent with ex-
inconsistent with the evidence presented

cue-798
00:46:05.456 --> 00:46:06.536
at the liability trial.

cue-799
00:46:09.756 --> 00:46:11.336
Wh- which particular, um,

cue-800
00:46:12.016 --> 00:46:15.056
-statement, Mr. Wilson?
-Most notably the fact that he testified

cue-801
00:46:15.056 --> 00:46:18.436
that all the parties agreed to these
terms. There's no evidence that that's

cue-802
00:46:18.436 --> 00:46:18.616
true.

cue-803
00:46:21.736 --> 00:46:22.686
May I inquire about that, Your Honor?

cue-804
00:46:25.096 --> 00:46:25.866
Like, didn't I lay foundation for the
witness?

cue-805
00:46:25.866 --> 00:46:28.056
Well, did he, is, do we have a, do...

cue-806
00:46:30.936 --> 00:46:35.035
I h- I would have to go back and check the
record, um, about whether or not there

cue-807
00:46:35.036 --> 00:46:39.116
was an agreement when the parties
testified. Did they testify? You should

cue-808
00:46:39.116 --> 00:46:40.596
-know.
-I do know, Your Honor.

cue-809
00:46:40.596 --> 00:46:43.266
And did they testify that this was the
agreement?

cue-810
00:46:43.876 --> 00:46:48.746
Your Honor, the, the evidence showed, and
Dr. Wason will confirm, that Su- Sutskever

cue-811
00:46:48.746 --> 00:46:52.276
and Brockman proposed these equity terms
to Mr. Musk,

cue-812
00:46:53.056 --> 00:46:57.396
that there was a agreement in principle
between them over that, but there was no

cue-813
00:46:57.396 --> 00:46:59.716
final agreement and that it fell apart
because

cue-814
00:47:00.496 --> 00:47:03.776
Sutskever and Brockman walked back their
position on, uh-

cue-815
00:47:03.776 --> 00:47:04.975
-It wasn't
-... Elon Musk's control rights.

cue-816
00:47:05.896 --> 00:47:06.056
Well,

cue-817
00:47:07.056 --> 00:47:11.386
that's true that there was no final
agreement. I agree with that. Uh, Mr. Kri

cue-818
00:47:11.386 --> 00:47:16.336
did not mention that Mr. Altman did not
even agree in principle, to use his

cue-819
00:47:16.336 --> 00:47:19.416
phrase. There's no evidence that Mr.
Altman was amenable to what Mr.

cue-820
00:47:20.226 --> 00:47:24.176
Brockman and Dr. Sutskever were proposing,
and I think there's a dispute between the

cue-821
00:47:24.176 --> 00:47:27.176
parties as to the reason why this deal
fell apart. The, the one thing that's

cue-822
00:47:27.176 --> 00:47:29.096
clear is that it, it did not actually come
together.

cue-823
00:47:29.796 --> 00:47:31.425
So if there was no agreement,

cue-824
00:47:32.456 --> 00:47:33.596
then that would,

cue-825
00:47:35.576 --> 00:47:37.456
um, then how would your testimony change?

cue-826
00:47:41.296 --> 00:47:44.896
So it would not change there, there, and
because of, for several reasons.

cue-827
00:47:44.896 --> 00:47:45.626
-So, so-
-For several reasons

cue-828
00:47:45.626 --> 00:47:48.596
... it doesn't matter that they agreed?
Does it matter or not?

cue-829
00:47:48.596 --> 00:47:49.746
No, because i- in,

cue-830
00:47:51.116 --> 00:47:51.676
for example,

cue-831
00:47:52.356 --> 00:47:56.516
two firms wanna merge, and the investment
bankers on both sides pr- prepare

cue-832
00:47:56.516 --> 00:48:00.935
documents that include valuations and
who's gonna hold what shares and how it's

cue-833
00:48:00.936 --> 00:48:03.896
gonna go forward. And all those things go
into the record.

cue-834
00:48:04.736 --> 00:48:08.836
If the deal ultimately doesn't go through,
that's still valuable information that

cue-835
00:48:08.836 --> 00:48:12.256
somebody like me can rely upon. This is
what the parties were thinking at the

cue-836
00:48:12.256 --> 00:48:15.836
-time. So it's-
-They were thinking a lot of things, and

cue-837
00:48:15.836 --> 00:48:17.626
some of the things you, um,

cue-838
00:48:19.016 --> 00:48:21.956
you have in your report and some you
ignore,

cue-839
00:48:23.076 --> 00:48:26.296
which goes to the weight of your
testimony. So I'm asking you,

cue-840
00:48:27.216 --> 00:48:31.276
does it matter to your opinion whether or
not they agreed, yes or no?

cue-841
00:48:31.276 --> 00:48:31.416
No.

cue-842
00:48:32.556 --> 00:48:32.736
Okay.

cue-843
00:48:33.756 --> 00:48:36.976
-Go ahead.
-Just to be clear, Dr. Wason, who proposed

cue-844
00:48:36.976 --> 00:48:39.495
the equity figures reflected on this
table?

cue-845
00:48:39.496 --> 00:48:44.216
-Mr. Brockman and Mr. Sutskever.
-And during these negotiations, were they

cue-846
00:48:44.216 --> 00:48:44.816
aligned with

cue-847
00:48:45.496 --> 00:48:49.386
Elon, or were they basically on the other
side of the negotiating table from Elon?

cue-848
00:48:50.536 --> 00:48:50.786
No, they were-

cue-849
00:48:52.056 --> 00:48:52.756
Okay, go ahead.

cue-850
00:48:53.756 --> 00:48:56.376
Well, I, I would assume they were aligned.

cue-851
00:48:56.376 --> 00:48:57.516
Well, it's ... Sorry, they were ...

cue-852
00:48:58.556 --> 00:49:02.836
To the extent they were negotiating equity
stakes, did Brockman and Sutskever have a

cue-853
00:49:02.836 --> 00:49:06.586
financial incentive to inflate the amount
that Elon Musk would receive?

cue-854
00:49:06.586 --> 00:49:07.936
-No.
-Objection. No foundation.

cue-855
00:49:07.936 --> 00:49:08.396
Sustained.

cue-856
00:49:09.156 --> 00:49:10.156
-Then-
-That's an argument.

cue-857
00:49:10.156 --> 00:49:11.296
-Would the-
-It's sustained.

cue-858
00:49:11.296 --> 00:49:11.706
Yes, Your Honor.

cue-859
00:49:12.816 --> 00:49:18.396
What, uh, do you consider the proposal
made by the counterparties to this, or

cue-860
00:49:18.396 --> 00:49:18.456
Mr....

cue-861
00:49:19.996 --> 00:49:24.976
Strike that. Do you consider the proposal
made by Elon's counterparties in this

cue-862
00:49:24.976 --> 00:49:27.856
discussion to be relevant evidence of the,

cue-863
00:49:28.856 --> 00:49:35.236
uh, share of value they ascribed to Elon's
contributions to OpenAI at this point in

cue-864
00:49:35.236 --> 00:49:36.176
-time?
-Hold on one moment.

cue-865
00:49:36.176 --> 00:49:36.976
Objection. Leading.

cue-866
00:49:37.876 --> 00:49:38.276
Sustained.

cue-867
00:49:39.636 --> 00:49:41.196
-You can-
-Uh, can you hold on a moment?

cue-868
00:50:06.356 --> 00:50:07.556
Sir, come forward.

cue-869
00:50:13.896 --> 00:50:16.216
-Good morning, Your Honor.
-Good morning. What is your name?

cue-870
00:50:17.276 --> 00:50:20.396
-Sir, what is your name?
-Uh, Martin Ng.

cue-871
00:50:21.296 --> 00:50:23.976
Okay. Are you a member of the public, or
are you a member of the press?

cue-872
00:50:26.036 --> 00:50:27.216
Um, I'm

cue-873
00:50:28.116 --> 00:50:29.576
considered a private party.

cue-874
00:50:30.296 --> 00:50:32.156
I was in the press a long time ago,

cue-875
00:50:33.056 --> 00:50:36.376
-and I was a tax auditor.
-You can read English, right?

cue-876
00:50:37.456 --> 00:50:39.796
-Uh-
-You understand that there is no recording

cue-877
00:50:39.796 --> 00:50:43.056
-in this courthouse?
-Yes, I agree with you, uh, Your Honor.

cue-878
00:50:43.056 --> 00:50:46.296
Then why do I have a report from the
marshals that you're recording?

cue-879
00:50:47.296 --> 00:50:47.696
Okay.

cue-880
00:50:48.416 --> 00:50:49.836
Are you recording, yes or no?

cue-881
00:50:50.936 --> 00:50:52.076
Did you record anything?

cue-882
00:50:53.416 --> 00:50:56.416
Well, I don't know. I did not take any
photos,

cue-883
00:50:57.116 --> 00:51:01.356
and I, I, I listen to the stream on
YouTube as always.

cue-884
00:51:02.096 --> 00:51:03.056
And then, um,

cue-885
00:51:03.776 --> 00:51:07.926
and then, uh, I thought it's probably is
okay to record because it-

cue-886
00:51:07.926 --> 00:51:13.096
It says all over this courthouse you
cannot record. You're ordered to go down

cue-887
00:51:13.096 --> 00:51:16.956
into the marshal's office. They can-- are
authorized to look at all of your

cue-888
00:51:16.956 --> 00:51:18.406
-electronic devices-
-Yes

cue-889
00:51:18.406 --> 00:51:21.236
-... and delete everything.
-Yes, I agree.

cue-890
00:51:21.236 --> 00:51:22.275
-Okay?
-If there's-

cue-891
00:51:22.276 --> 00:51:22.656
Do not rec-

cue-892
00:51:23.296 --> 00:51:25.576
-We are in the middle of a hearing.
-I understand.

cue-893
00:51:26.616 --> 00:51:30.596
I a- I apologize if I did it wrong, but I,
I did not read it,

cue-894
00:51:31.276 --> 00:51:34.816
-and, uh, uh, uh-
-So you ... Then, then you're blind to have

cue-895
00:51:34.816 --> 00:51:40.656
ignored all of the notices all over this
courthouse, all of the warnings that we

cue-896
00:51:40.656 --> 00:51:44.756
repeatedly give. You cannot record in a
federal courthouse.

cue-897
00:51:44.756 --> 00:51:45.036
Yes.

cue-898
00:51:46.996 --> 00:51:49.036
If the marshal please take him downstairs.
Thank you.

cue-899
00:51:49.036 --> 00:51:49.275
Your Honor.

cue-900
00:51:50.416 --> 00:51:51.136
All right, proceed.

cue-901
00:51:52.176 --> 00:51:57.176
Dr. Wason, why did you consider it
relevant what Mr. Brockman and Mr.

cue-902
00:51:57.176 --> 00:52:00.696
Sutskever proposed to Mr. Musk about what

cue-903
00:52:01.536 --> 00:52:02.956
his equity share should be?

cue-904
00:52:06.776 --> 00:52:10.856
So look, I'm looking at, at a variety of
evidence as I'm doing my analysis.

cue-905
00:52:11.516 --> 00:52:15.426
I had his original monetary contributions
between 30 and 60%.

cue-906
00:52:16.116 --> 00:52:16.896
Now I have a,

cue-907
00:52:18.256 --> 00:52:22.336
a, a, a document that shows the parties
were contemplating 52.4%.

cue-908
00:52:22.936 --> 00:52:24.616
That's right in the middle range.

cue-909
00:52:25.256 --> 00:52:28.816
I would've shaded higher because the
earlier money, i- in my opinion, is more

cue-910
00:52:28.816 --> 00:52:31.736
valuable, but these, all these figures are
consistent.

cue-911
00:52:33.696 --> 00:52:36.396
And to your understanding, w- was the
reason that

cue-912
00:52:37.116 --> 00:52:41.896
no, or well, to your understanding and
review of the record, was the reason that

cue-913
00:52:41.896 --> 00:52:44.786
this transaction was never consummated
because-

cue-914
00:52:44.786 --> 00:52:46.056
Don't lead, Mr. Cry.

cue-915
00:52:46.876 --> 00:52:47.336
Thank you, Your Honor.

cue-916
00:52:48.456 --> 00:52:51.486
To your understanding, why was this
agreement never consummated?

cue-917
00:52:52.316 --> 00:52:56.436
My understanding is that the deal fell
apart because they couldn't agree on

cue-918
00:52:56.436 --> 00:52:57.816
control, on board seats.

cue-919
00:53:00.076 --> 00:53:00.756
Let's talk about the

cue-920
00:53:01.836 --> 00:53:05.556
last factor you mentioned. That's the
non-monetary contributions.

cue-921
00:53:05.556 --> 00:53:08.376
-Yes.
-What sorts of non-monetary contributions

cue-922
00:53:08.376 --> 00:53:10.136
did Elon provide to OpenAI?

cue-923
00:53:11.556 --> 00:53:14.156
So the non-monetary contributions consist
of,

cue-924
00:53:15.076 --> 00:53:15.296
um,

cue-925
00:53:16.336 --> 00:53:17.876
leadership, know-how,

cue-926
00:53:18.836 --> 00:53:19.636
reputation,

cue-927
00:53:20.716 --> 00:53:26.116
um, ability to, to call in favors from
other industrialists. All those things

cue-928
00:53:26.116 --> 00:53:31.276
blend together to create value. Um, and
Your Honor, I can, I can sort of give you

cue-929
00:53:31.276 --> 00:53:33.056
an analogy if it would be helpful.

cue-930
00:53:36.996 --> 00:53:38.836
-I understand the basic premise.
-Okay.

cue-931
00:53:40.136 --> 00:53:43.516
Dr. Wason, what does the finance
literature say about the role of

cue-932
00:53:43.516 --> 00:53:47.376
-reputation in this context?
-That it's absolutely valuable and

cue-933
00:53:47.376 --> 00:53:53.096
important. If you have a luminary investor
who contributes to something,

cue-934
00:53:54.156 --> 00:53:58.216
um, that signal, that sends a signal to
the market and to others who are less

cue-935
00:53:58.216 --> 00:54:00.566
informed that, oh, this, this very
successful

cue-936
00:54:01.176 --> 00:54:01.846
bright person,

cue-937
00:54:02.716 --> 00:54:04.956
uh, thinks this is a, an exciting
opportunity.

cue-938
00:54:05.796 --> 00:54:06.036
Their,

cue-939
00:54:07.476 --> 00:54:11.056
the asymmetric information is reduced, and
they will also then be more willing to

cue-940
00:54:11.056 --> 00:54:11.576
contribute.

cue-941
00:54:12.446 --> 00:54:18.436
Does that finance literature include
empirical studies that a- analyze the, uh,

cue-942
00:54:18.436 --> 00:54:20.696
-the role of high-profile investors?
-Yes, it does.

cue-943
00:54:21.736 --> 00:54:26.076
-And what do those empirical studies show?
-It, it shows that prestige investments

cue-944
00:54:26.076 --> 00:54:27.536
drag other investments along.

cue-945
00:54:29.556 --> 00:54:35.076
Dr. Wason, what was Elon's reputation and
public profile when he helped found OpenAI

cue-946
00:54:35.076 --> 00:54:35.866
in 2015?

cue-947
00:54:36.736 --> 00:54:39.576
-Sky-high.
-Why is that?

cue-948
00:54:39.576 --> 00:54:42.036
Well, he had already ... You know, Tesla
was a huge success.

cue-949
00:54:42.996 --> 00:54:44.616
Uh, SpaceX was up and running.

cue-950
00:54:45.416 --> 00:54:47.066
He had already demonstrated his

cue-951
00:54:48.036 --> 00:54:50.396
... He, he, I think he was already the
richest man in the world at that time

cue-952
00:54:51.796 --> 00:54:56.335
Did your review of the evidentiary record
in this case reveal any documents that

cue-953
00:54:56.336 --> 00:54:57.556
were relevant to that subject?

cue-954
00:54:58.376 --> 00:54:59.316
-Yes.
-What were they?

cue-955
00:55:01.436 --> 00:55:01.796
Um,

cue-956
00:55:03.496 --> 00:55:05.176
there's, there's discussions between,

cue-957
00:55:05.876 --> 00:55:07.956
um, the parties here that his,

cue-958
00:55:08.796 --> 00:55:13.096
his participation in OpenAI was
invaluable.

cue-959
00:55:13.096 --> 00:55:18.236
How did Elon's public profile compare to
Sam Altman or Greg Brockman's public

cue-960
00:55:18.236 --> 00:55:20.666
-profile during this timeframe?
-He was,

cue-961
00:55:22.026 --> 00:55:26.836
-it was much higher. Much, much higher.
-You also mentioned strategic guidance and

cue-962
00:55:26.836 --> 00:55:31.236
know-how. What does the finance literature
say about those topics?

cue-963
00:55:32.036 --> 00:55:36.416
It says that savvy in- investors and savvy
builders, people who have done it before,

cue-964
00:55:37.416 --> 00:55:40.496
um, can help guide new fledgling companies
with their...

cue-965
00:55:42.036 --> 00:55:43.926
Guide fledgling companies with their,

cue-966
00:55:45.116 --> 00:55:46.636
their wisdom, their knowledge.

cue-967
00:55:47.436 --> 00:55:51.996
Was Elon's background up to that point
relevant to this topic?

cue-968
00:55:51.996 --> 00:55:54.676
Yes, very much. He'd already built
successful companies.

cue-969
00:55:57.196 --> 00:55:59.896
Did the evidence that you reviewed in the
case

cue-970
00:56:01.836 --> 00:56:03.176
inform your opinions about

cue-971
00:56:04.496 --> 00:56:07.475
any strategic guidance or know-how that
was provided?

cue-972
00:56:09.496 --> 00:56:09.776
Um,

cue-973
00:56:11.456 --> 00:56:15.136
yeah, I mean, the, again, there's, there's
emails and there's documents between the

cue-974
00:56:15.136 --> 00:56:16.296
parties indicating that his,

cue-975
00:56:16.956 --> 00:56:20.136
his knowledge, his contributions, his
guidance were invaluable.

cue-976
00:56:21.476 --> 00:56:25.416
Your Honor, may I show the witness exhibit
98, which is already in evidence?

cue-977
00:56:25.416 --> 00:56:27.396
-You may.
-And may I publish that?

cue-978
00:56:27.396 --> 00:56:27.616
You may.

cue-979
00:56:28.456 --> 00:56:30.036
Dr. Wason, what is this document?

cue-980
00:56:32.576 --> 00:56:37.916
Uh, this is an email from Mr. Sutskever to
Mr. Musk.

cue-981
00:56:39.936 --> 00:56:40.936
Uh, what's the date?

cue-982
00:56:42.576 --> 00:56:45.416
Uh, the date is January 2018.

cue-983
00:56:47.276 --> 00:56:52.416
Uh, is, did this email inform your opinion
about whether Elon contributed guidance

cue-984
00:56:52.416 --> 00:56:53.616
and know-how to OpenAI?

cue-985
00:56:54.556 --> 00:56:54.756
Yes.

cue-986
00:56:55.596 --> 00:56:56.076
In what way?

cue-987
00:56:56.896 --> 00:57:01.736
Well, it shows that, um, Mr. Sutskever,
well, I'll just read it. "It helps that we

cue-988
00:57:01.736 --> 00:57:02.076
have

cue-989
00:57:02.736 --> 00:57:05.876
the most overwhelmingly competent person
in the world helping us."

cue-990
00:57:07.356 --> 00:57:10.276
Um, and it's addressed to Mr. Musk at
SpaceX.

cue-991
00:57:11.036 --> 00:57:11.316
He,

cue-992
00:57:12.616 --> 00:57:15.476
it, to me, I re- it speaks for itself. He-

cue-993
00:57:16.476 --> 00:57:20.196
Let, let me, uh, Your Honor, may I also
put on the screen exhibit 99, which is

cue-994
00:57:20.196 --> 00:57:20.996
already in evidence?

cue-995
00:57:21.796 --> 00:57:23.016
-You may.
-May I publish that?

cue-996
00:57:23.016 --> 00:57:23.196
You may.

cue-997
00:57:24.296 --> 00:57:25.896
What is this document, Dr. Wason?

cue-998
00:57:27.336 --> 00:57:30.396
It's an email from Mr. Brockman to Mr.
Musk

cue-999
00:57:31.576 --> 00:57:32.976
at the same, same date.

cue-1000
00:57:34.016 --> 00:57:39.036
Did this email inform your opinion about
whether Elon contributed strategic

cue-1001
00:57:39.036 --> 00:57:40.556
guidance and know-how to OpenAI?

cue-1002
00:57:41.376 --> 00:57:45.336
Yes. It says, "In every meeting with you,
I continue to learn, grow, and see the

cue-1003
00:57:45.336 --> 00:57:46.116
world in a new way."

cue-1004
00:57:48.436 --> 00:57:51.696
Can high-profile founders or investors
also help with recruiting?

cue-1005
00:57:52.396 --> 00:57:52.876
Absolutely.

cue-1006
00:57:53.636 --> 00:57:55.036
What did the evidence you review

cue-1007
00:57:55.916 --> 00:57:57.696
show about Elon's role in recruiting?

cue-1008
00:57:58.636 --> 00:58:02.036
My understanding is that Mr. Musk was
instrumental in, in recruiting all the

cue-1009
00:58:02.036 --> 00:58:02.616
primary,

cue-1010
00:58:03.296 --> 00:58:03.516
um,

cue-1011
00:58:04.816 --> 00:58:05.465
participants,

cue-1012
00:58:06.116 --> 00:58:07.576
in r- in particular

cue-1013
00:58:08.196 --> 00:58:10.836
recruiting the scientists, Mr. Sutskever
and Mr. Dingma.

cue-1014
00:58:11.936 --> 00:58:13.996
And what, what did the record show about
Elon's-

cue-1015
00:58:14.816 --> 00:58:15.976
Ding- Dingma

cue-1016
00:58:17.696 --> 00:58:19.736
Is that, is that Dirk Kingma you're
referring to?

cue-1017
00:58:19.736 --> 00:58:20.736
Dingma. I'm sorry.

cue-1018
00:58:21.656 --> 00:58:21.836
Uh,

cue-1019
00:58:22.576 --> 00:58:26.616
what, what did the, your review, um, show
you about the

cue-1020
00:58:27.336 --> 00:58:31.716
impact of Elon's role in connection with
the recruiting of those two individuals?

cue-1021
00:58:31.716 --> 00:58:34.356
That he was critical in attracting them to
OpenAI.

cue-1022
00:58:34.356 --> 00:58:37.096
That's not what Mr. Sutskever testified
to.

cue-1023
00:58:39.216 --> 00:58:42.636
-That's what the documents that I read-
-That's not what he testified to under

cue-1024
00:58:42.636 --> 00:58:42.936
oath.

cue-1025
00:58:44.096 --> 00:58:44.486
Yes, Your Honor.

cue-1026
00:58:45.176 --> 00:58:47.696
So does that have any impact on your
analysis?

cue-1027
00:58:49.376 --> 00:58:52.276
-Well, the recruiting is, is-
-It, it's just yes or no. Does it have an

cue-1028
00:58:52.276 --> 00:58:53.576
impact or yes? Yes or no?

cue-1029
00:58:54.456 --> 00:58:55.956
-Small impact, yes.
-Okay.

cue-1030
00:58:56.956 --> 00:58:58.836
But there's no way to quantify that,
right?

cue-1031
00:59:00.696 --> 00:59:03.376
So the non-monetary contributions cannot
be,

cue-1032
00:59:04.536 --> 00:59:07.036
I, I can't give you a point estimate that
says

cue-1033
00:59:07.776 --> 00:59:14.316
it's a 20% premium over the non, over the
monetary because the academic literature,

cue-1034
00:59:14.316 --> 00:59:16.236
it doesn't give you a point estimate.

cue-1035
00:59:18.096 --> 00:59:18.496
-Excuse me, your Honor.
-The jury.

cue-1036
00:59:18.496 --> 00:59:19.076
Go ahead, Evan.

cue-1037
00:59:19.736 --> 00:59:19.906
All right,

cue-1038
00:59:20.616 --> 00:59:20.996
proceed.

cue-1039
00:59:21.616 --> 00:59:26.176
So doesn't give you a point estimate. What
it does is it, it highlights that it's a

cue-1040
00:59:26.176 --> 00:59:29.156
-very valuable thing.
-E- except he testified

cue-1041
00:59:29.976 --> 00:59:32.346
differently than what the document showed.

cue-1042
00:59:32.346 --> 00:59:35.276
-I'm-
-And did you not listen to that testimony?

cue-1043
00:59:35.276 --> 00:59:37.936
I did, but I'm talking about the
non-monetary as a, as a whole,

cue-1044
00:59:38.896 --> 00:59:42.835
which includes recruiting, but it includes
sort of being the-

cue-1045
00:59:42.836 --> 00:59:44.376
So if you heard that testimony,

cue-1046
00:59:45.316 --> 00:59:46.636
why w-

cue-1047
00:59:47.016 --> 00:59:48.156
why wouldn't you say in your

cue-1048
00:59:48.896 --> 00:59:50.476
under-oath testimony here that

cue-1049
00:59:52.496 --> 00:59:56.955
if, that, that that, or why would you
credit that document when you heard him

cue-1050
00:59:56.956 --> 01:00:00.396
testify under oath that that wasn't, um,

cue-1051
01:00:02.136 --> 01:00:04.616
that Mr. Musk was not a big factor in
recruiting him?

cue-1052
01:00:05.756 --> 01:00:08.916
Your Honor, may I refresh the witness'
recollection with the references in his

cue-1053
01:00:08.916 --> 01:00:09.526
written testimony?

cue-1054
01:00:17.096 --> 01:00:17.736
We have a verdict.

cue-1055
01:00:18.676 --> 01:00:19.476
You may stand down.

cue-1056
01:00:21.796 --> 01:00:26.236
You can, um, leave the stand for a moment.
You're not excused. Let's call the jury

cue-1057
01:00:26.236 --> 01:00:26.376
in.

cue-1058
01:00:27.416 --> 01:00:27.856
Yes, Your Honor.

cue-1059
01:01:12.106 --> 01:03:21.726
The

cue-1060
01:03:21.726 --> 01:03:22.546
prize went under-

cue-1061
01:03:44.206 --> 01:03:45.286
Ma'am, be seated.

cue-1062
01:03:51.546 --> 01:03:53.186
Um, I just was handed

cue-1063
01:03:53.846 --> 01:03:58.926
a-- We're, we're all here because I was
conducting. We're here. But I was just

cue-1064
01:03:58.926 --> 01:04:02.686
handed, uh, this folder, which is the
verdict folder.

cue-1065
01:04:03.566 --> 01:04:04.366
You have a verdict?

cue-1066
01:04:05.066 --> 01:04:05.386
Yes.

cue-1067
01:04:06.726 --> 01:04:08.606
It's unanimous? Yes. Okay.

cue-1068
01:04:09.666 --> 01:04:10.285
Mr. Klinke.

cue-1069
01:04:41.126 --> 01:04:42.766
Ladies and gentlemen of the jury,

cue-1070
01:04:43.506 --> 01:04:46.366
listen to your verdict as it will stand
recorded.

cue-1071
01:04:48.666 --> 01:04:53.046
United States District Court, Northern
District of California, Oakland division.

cue-1072
01:04:55.946 --> 01:05:01.726
Case number twenty-four dash CV dash four
seven two two dash YGR.

cue-1073
01:05:02.926 --> 01:05:06.506
Elon Musk et al. versus Samuel Altman et
al.

cue-1074
01:05:07.866 --> 01:05:08.306
Verdict.

cue-1075
01:05:11.246 --> 01:05:15.886
We, the jury in the above entitled case,
unanimously find as follows.

cue-1076
01:05:16.626 --> 01:05:17.166
Number one,

cue-1077
01:05:18.366 --> 01:05:20.846
on the claim for breach of charitable
trust,

cue-1078
01:05:21.866 --> 01:05:24.646
is the claim barred by the statute of
limitations?

cue-1079
01:05:25.666 --> 01:05:26.086
Yes.

cue-1080
01:05:27.546 --> 01:05:27.746
Two,

cue-1081
01:05:29.226 --> 01:05:33.126
on the claim for aiding and abetting
breach of charitable trust,

cue-1082
01:05:34.106 --> 01:05:36.996
is the claim barred by statute of
limitations?

cue-1083
01:05:39.506 --> 01:05:44.826
On the claim for restitution based on
unjust enrichment, is the claim barred by

cue-1084
01:05:44.826 --> 01:05:46.266
statute of limitations?

cue-1085
01:05:47.546 --> 01:05:47.926
Yes.

cue-1086
01:05:52.266 --> 01:05:54.806
Is the sign, uh, the verdict form signed?

cue-1087
01:05:55.426 --> 01:05:56.846
-It is, Your Honor.
-And dated?

cue-1088
01:05:57.546 --> 01:05:58.766
-It is, Your Honor.
-Okay.

cue-1089
01:05:59.526 --> 01:06:01.956
-Would counsel like the jury polled?
-Poll the jury.

cue-1090
01:06:02.786 --> 01:06:03.906
We will poll the jury.

cue-1091
01:06:10.826 --> 01:06:12.806
Juror number one, is this your verdict?

cue-1092
01:06:14.666 --> 01:06:16.606
Juror number two, is this your verdict?

cue-1093
01:06:18.006 --> 01:06:20.386
Juror number three, is this your verdict?

cue-1094
01:06:21.726 --> 01:06:23.636
Juror number four, is this your verdict?

cue-1095
01:06:24.986 --> 01:06:27.146
Juror number five, is this your verdict?

cue-1096
01:06:28.166 --> 01:06:30.166
Juror number six, is this your verdict?

cue-1097
01:06:31.586 --> 01:06:34.226
-Juror number seven, is this your verdict?
-Yeah.

cue-1098
01:06:35.086 --> 01:06:37.066
Juror number eight, is this your verdict?

cue-1099
01:06:38.386 --> 01:06:40.346
Juror number nine, is this your verdict?

cue-1100
01:06:41.686 --> 01:06:45.486
-Your Honor, the verdict is unanimous.
-All right. The verdict can be recorded.

cue-1101
01:06:46.806 --> 01:06:51.226
-So recorded, Your Honor.
-Uh, I assume people do not want it reread

cue-1102
01:06:51.286 --> 01:06:51.866
as recorded.

cue-1103
01:06:56.846 --> 01:06:57.806
-No.
-Okay.

cue-1104
01:07:01.286 --> 01:07:02.738
Uh-Then

cue-1105
01:07:03.378 --> 01:07:07.518
the jury having found that the defendants
proved the statute of limitations defense,

cue-1106
01:07:08.178 --> 01:07:11.958
the court now confirms its prior
indication that it would accept the jury's

cue-1107
01:07:11.958 --> 01:07:17.178
findings as its own. Accordingly, the
claims of breach of charitable trust and

cue-1108
01:07:17.178 --> 01:07:22.108
unjust enrichment are dismissed as
untimely. The claim for aiding and

cue-1109
01:07:22.108 --> 01:07:28.028
abetting is dismissed as a matter of law,
given that it is dependent on a finding of

cue-1110
01:07:28.028 --> 01:07:31.858
charitable trust. It too is, uh,
dismissed.

cue-1111
01:07:33.718 --> 01:07:34.938
So members of the jury,

cue-1112
01:07:37.698 --> 01:07:39.298
I cannot thank you enough

cue-1113
01:07:40.138 --> 01:07:40.498
for,

cue-1114
01:07:41.278 --> 01:07:44.858
uh, deliberating in this, um, difficult
case.

cue-1115
01:07:46.058 --> 01:07:48.638
I wanna leave you with, uh, a few
thoughts.

cue-1116
01:07:50.078 --> 01:07:52.818
First of all, now that the case is over,

cue-1117
01:07:54.458 --> 01:07:56.058
you may talk to anyone

cue-1118
01:07:57.058 --> 01:08:00.618
about anything [laughs]

cue-1119
01:08:01.418 --> 01:08:02.718
dealing with this case,

cue-1120
01:08:03.718 --> 01:08:06.998
and that includes the lawyers, the
parties, their representatives.

cue-1121
01:08:07.758 --> 01:08:10.278
Everybody and anybody can talk to you.
However,

cue-1122
01:08:12.318 --> 01:08:13.098
I order

cue-1123
01:08:14.038 --> 01:08:18.258
that those discussions must occur at a
reasonable time

cue-1124
01:08:19.098 --> 01:08:23.898
and in a reasonable place and only with
your consent.

cue-1125
01:08:25.378 --> 01:08:28.998
I've taken some measures, um, that I'm
gonna explain to you.

cue-1126
01:08:30.058 --> 01:08:31.018
Um, but

cue-1127
01:08:33.598 --> 01:08:37.698
if anybody ever approaches you and asks
you if you wanna talk,

cue-1128
01:08:38.878 --> 01:08:41.038
all you have to do is shake your head no,

cue-1129
01:08:42.118 --> 01:08:42.918
and they are ordered

cue-1130
01:08:43.698 --> 01:08:45.058
that they cannot speak to you.

cue-1131
01:08:46.378 --> 01:08:50.918
You get their name, their phone number,
their email, and I will deal with them if

cue-1132
01:08:50.918 --> 01:08:53.318
they bug you in any way, shape, or form.

cue-1133
01:08:54.298 --> 01:08:54.538
All right?

cue-1134
01:08:55.518 --> 01:08:57.678
You will not be harassed.

cue-1135
01:08:59.678 --> 01:09:00.878
All you have to do is say no.

cue-1136
01:09:02.138 --> 01:09:04.598
And you have Mr. Clenko's email,

cue-1137
01:09:05.598 --> 01:09:10.268
uh, and, and I will handle it. Okay? You
have my assurance.

cue-1138
01:09:11.377 --> 01:09:13.758
We have big cases like this in our
district,

cue-1139
01:09:14.758 --> 01:09:19.178
and we will deal with people if they do
not follow that order.

cue-1140
01:09:20.818 --> 01:09:27.158
Y- you are not here to be in any way made
uncomfortable. You have done a great

cue-1141
01:09:27.158 --> 01:09:28.918
service to your country

cue-1142
01:09:30.238 --> 01:09:35.098
and to this community and certainly to
this court and the Court General.

cue-1143
01:09:36.698 --> 01:09:37.878
As I said to you at one point,

cue-1144
01:09:38.818 --> 01:09:40.298
really important that we have jurors,

cue-1145
01:09:41.118 --> 01:09:46.667
right? So that we resolve our disputes in
courtrooms with reasonable people

cue-1146
01:09:47.438 --> 01:09:50.718
who have no- nothing to gain.

cue-1147
01:09:52.398 --> 01:09:52.638
Um,

cue-1148
01:09:53.858 --> 01:09:57.958
you've done a service. And like I said, if
you wanna talk to them, you're welcome

cue-1149
01:09:57.958 --> 01:09:58.138
to.

cue-1150
01:09:58.878 --> 01:10:02.258
Sometimes lawyers, for instance, will
wanna talk to you 'cause they wanna learn

cue-1151
01:10:02.258 --> 01:10:06.738
how to do their job better. They may ask
you about w- what you thought of how they

cue-1152
01:10:06.738 --> 01:10:08.218
presented their case or their evidence.

cue-1153
01:10:09.478 --> 01:10:12.498
So it's up to you. It's entirely up to
you.

cue-1154
01:10:13.458 --> 01:10:13.798
Okay?

cue-1155
01:10:15.458 --> 01:10:15.618
Um,

cue-1156
01:10:18.158 --> 01:10:19.378
I have a small,

cue-1157
01:10:20.478 --> 01:10:20.618
uh,

cue-1158
01:10:21.598 --> 01:10:25.878
a small token of my personal appreciation
for you. Federal funds have not been used

cue-1159
01:10:25.878 --> 01:10:27.887
-to pay for this, but Mr. Clenko-
-[laughs]

cue-1160
01:10:28.538 --> 01:10:33.118
Uh, Mr. Clenko, uh, will give you
something from me, uh, and Mr. Clenko,

cue-1161
01:10:33.118 --> 01:10:35.918
-it's on my side table by my chair-
-Yes

cue-1162
01:10:35.918 --> 01:10:36.278
... um,

cue-1163
01:10:37.918 --> 01:10:39.898
when, when he takes you into the back
room.

cue-1164
01:10:40.838 --> 01:10:41.038
Um,

cue-1165
01:10:42.198 --> 01:10:47.258
I'm also, uh, happy to chat with you
myself. If you'd like, just let him know,

cue-1166
01:10:47.258 --> 01:10:50.278
and I will go back there, um, to chat with
you.

cue-1167
01:10:52.038 --> 01:10:52.158
Uh,

cue-1168
01:10:53.838 --> 01:10:54.378
I, um,

cue-1169
01:10:55.618 --> 01:10:58.618
I am not a very poetic person, never was
as a kid,

cue-1170
01:10:59.278 --> 01:11:01.078
um, but I do like to leave

cue-1171
01:11:01.898 --> 01:11:02.438
jurors,

cue-1172
01:11:03.258 --> 01:11:04.818
um, with a reflection

cue-1173
01:11:05.798 --> 01:11:10.078
on jury service. And so I'm borrowing, um,
this

cue-1174
01:11:10.978 --> 01:11:11.298
quote

cue-1175
01:11:11.998 --> 01:11:16.098
from one of our former United States
Supreme Court justices,

cue-1176
01:11:16.698 --> 01:11:16.998
William,

cue-1177
01:11:17.738 --> 01:11:18.638
uh, O. Douglas,

cue-1178
01:11:19.838 --> 01:11:26.398
uh, who-- he had a pretty poetic comment
on the jury system, which I think is, um,

cue-1179
01:11:26.398 --> 01:11:27.278
apt here

cue-1180
01:11:27.958 --> 01:11:29.938
and important for us to all remember.

cue-1181
01:11:31.378 --> 01:11:35.078
And, uh, I've modified it, um, a little
bit for this group,

cue-1182
01:11:36.018 --> 01:11:38.538
but, uh, he said as follows:

cue-1183
01:11:40.578 --> 01:11:41.258
"A jury

cue-1184
01:11:41.918 --> 01:11:46.918
reflects the attitudes and mores of the
community from which it is drawn.

cue-1185
01:11:48.418 --> 01:11:50.198
It lives only for the day

cue-1186
01:11:50.898 --> 01:11:52.058
and does justice

cue-1187
01:11:52.738 --> 01:11:54.138
according to its limits.

cue-1188
01:11:56.278 --> 01:11:59.438
The group of jurors who are drawn to hear
a case

cue-1189
01:12:00.238 --> 01:12:01.078
make a decision

cue-1190
01:12:01.818 --> 01:12:02.958
and then melt away.

cue-1191
01:12:04.538 --> 01:12:10.958
It is not present the next day to be
criticized. It is the one governmental

cue-1192
01:12:10.958 --> 01:12:14.138
agency that has no ambition.

cue-1193
01:12:16.118 --> 01:12:17.338
It is as human

cue-1194
01:12:18.558 --> 01:12:20.038
as the people who make it up.

cue-1195
01:12:21.918 --> 01:12:25.238
And while it is sometimes persuaded by
emotion,

cue-1196
01:12:25.958 --> 01:12:30.698
the effects are that at times it takes the
sharp edges off the law and uses

cue-1197
01:12:30.698 --> 01:12:33.818
conscience to soften some hardships within
the law.

cue-1198
01:12:35.378 --> 01:12:35.758
Also,

cue-1199
01:12:37.038 --> 01:12:40.598
since it is of and from the community,

cue-1200
01:12:41.998 --> 01:12:44.738
the jury gives the law an acceptance

cue-1201
01:12:45.818 --> 01:12:50.838
in a way that verdicts by judges such as
myself cannot."

cue-1202
01:12:52.478 --> 01:12:53.948
So with that, members of the jury,

cue-1203
01:12:54.938 --> 01:12:57.578
you are excused with my gratitude.

cue-1204
01:12:59.438 --> 01:12:59.958
Mr. Clenko.

cue-1205
01:13:01.298 --> 01:13:03.638
These rights for the jury.

cue-1206
01:13:04.698 --> 01:13:06.328
[clears throat]

cue-1207
01:13:12.268 --> 01:13:15.778
Thank

cue-1208
01:13:15.778 --> 01:13:20.488
you.

cue-1209
01:13:23.918 --> 01:13:24.528
Thank you,

cue-1210
01:13:24.528 --> 01:13:34.828
Susan.

cue-1211
01:13:42.858 --> 01:13:43.328
Mr. Mullow.

cue-1212
01:13:46.828 --> 01:13:47.688
Uh, counsel.

cue-1213
01:13:51.828 --> 01:13:52.988
This is, um,

cue-1214
01:13:54.688 --> 01:13:57.637
I guess what we can do, uh, you let me
know,

cue-1215
01:13:58.948 --> 01:13:59.498
Mr. Mullow,

cue-1216
01:14:00.108 --> 01:14:05.768
whether you still want me to, um, do a
writing.

cue-1217
01:14:06.908 --> 01:14:11.728
Um, I've always said that I was going to
accept the jury's verdict on this issue.

cue-1218
01:14:12.688 --> 01:14:16.408
Uh, I thought it was an important issue to
be tried. I think it's important for us

cue-1219
01:14:16.408 --> 01:14:17.048
to have a trial

cue-1220
01:14:17.928 --> 01:14:18.748
to bring clarity.

cue-1221
01:14:19.668 --> 01:14:19.908
Um,

cue-1222
01:14:21.388 --> 01:14:22.428
and, uh,

cue-1223
01:14:24.868 --> 01:14:27.468
I can write it up, but it's not as if this
case

cue-1224
01:14:28.808 --> 01:14:29.608
hasn't been,

cue-1225
01:14:30.348 --> 01:14:31.648
uh, publicly,

cue-1226
01:14:32.528 --> 01:14:32.728
uh,

cue-1227
01:14:35.448 --> 01:14:36.728
litigated in a sense.

cue-1228
01:14:37.948 --> 01:14:44.188
So to the extent that you want to appeal
what is a quintessential, quintessential

cue-1229
01:14:44.908 --> 01:14:47.888
factual finding on statute of limitations,

cue-1230
01:14:49.168 --> 01:14:49.448
um,

cue-1231
01:14:50.468 --> 01:14:53.628
like I said, I can write it up, or you all
can just argue it the way you would

cue-1232
01:14:53.628 --> 01:14:55.048
always argue a jury verdict.

cue-1233
01:14:56.088 --> 01:14:56.868
Uh, and I've--

cue-1234
01:14:58.348 --> 01:15:00.808
Mr. Cry just gave you a note. I don't know
if you,

cue-1235
01:15:01.968 --> 01:15:04.628
uh, can waive, uh, the writing

cue-1236
01:15:06.588 --> 01:15:07.888
or what your plan

cue-1237
01:15:08.928 --> 01:15:09.208
is.

cue-1238
01:15:10.268 --> 01:15:13.988
Um, well, certainly I want to preserve my
right to appeal, but can I have--

cue-1239
01:15:14.698 --> 01:15:17.188
get back to the court tomorrow, or let me
consult with my client.

cue-1240
01:15:18.548 --> 01:15:20.887
I think that that's fine. If you can, um,

cue-1241
01:15:21.748 --> 01:15:23.608
put something on the docket by nine.

cue-1242
01:15:24.468 --> 01:15:29.128
If you are not going to require or if you
waive, um, the filing of

cue-1243
01:15:29.928 --> 01:15:32.988
a statement of facts, I can tell you that
what I will do,

cue-1244
01:15:34.088 --> 01:15:35.388
um, it, it will be short,

cue-1245
01:15:36.448 --> 01:15:37.088
and it will

cue-1246
01:15:38.488 --> 01:15:41.808
basically reference a lot of documents. I
don't know that it's going to,

cue-1247
01:15:42.808 --> 01:15:48.268
uh-- Well, it, it, it's up to you. Um, but
I do think that, that things like statute

cue-1248
01:15:48.268 --> 01:15:52.708
of limitations and whether someone knew
or should have known or did sufficient

cue-1249
01:15:52.708 --> 01:15:55.948
diligence to know, those are, those are
factual issues.

cue-1250
01:15:56.708 --> 01:15:56.868
Uh,

cue-1251
01:15:57.708 --> 01:16:02.478
and, um, I think that there's a
substantial amount of evidence to support

cue-1252
01:16:02.478 --> 01:16:03.398
the jury's finding,

cue-1253
01:16:04.028 --> 01:16:07.568
which is why I was prepared, um, to
dismiss on the spot.

cue-1254
01:16:08.608 --> 01:16:08.748
So

cue-1255
01:16:09.428 --> 01:16:12.248
I know I still have an obligation to write
it up if I have to,

cue-1256
01:16:12.988 --> 01:16:18.148
uh, but my preference would be to start
preparing for my next trial.

cue-1257
01:16:18.148 --> 01:16:18.628
Understood.

cue-1258
01:16:19.308 --> 01:16:19.448
So,

cue-1259
01:16:20.448 --> 01:16:22.328
um, is there an objection?

cue-1260
01:16:22.948 --> 01:16:26.268
I mean, are, are the defendants going to
ask that I write this up?

cue-1261
01:16:27.198 --> 01:16:30.908
No, Your Honor. We're, we're pleased to
have this proceed at the convenience of

cue-1262
01:16:30.908 --> 01:16:32.468
the court.

cue-1263
01:16:43.208 --> 01:16:48.648
Uh, the jury's asked to meet, um, and so I
will meet with them. I never talk to them

cue-1264
01:16:48.648 --> 01:16:52.898
specifics about the case. I just talk to
them about process and everything else.

cue-1265
01:16:53.628 --> 01:16:55.488
So I'm gonna go do that.

cue-1266
01:16:56.488 --> 01:16:59.768
Why don't you all also talk about-- I
mean, we've got lots of claims left,

cue-1267
01:16:59.768 --> 01:17:03.488
whether we're gonna have a status
conference or what we're gonna do on the

cue-1268
01:17:03.488 --> 01:17:03.928
balance,

cue-1269
01:17:04.648 --> 01:17:05.957
um, of the, uh,

cue-1270
01:17:06.628 --> 01:17:07.208
of the case.

cue-1271
01:17:07.948 --> 01:17:09.148
All right. So why don't I

cue-1272
01:17:09.888 --> 01:17:12.128
plan on at least meeting with lead counsel
in

cue-1273
01:17:13.288 --> 01:17:15.148
an hour or so? I'll be around. I'm not
going in.

cue-1274
01:17:15.928 --> 01:17:16.788
-All right.
-Great. Thank you.

cue-1275
01:17:16.788 --> 01:17:17.808
-Stand-
-Thank you, Your Honor.

cue-1276
01:17:17.808 --> 01:17:19.608
-Thank you, Your Honor.
-Court is in recess.

cue-1277
01:17:22.088 --> 01:17:49.408
[laughing]

cue-1278
01:17:57.148 --> 01:17:57.728
I understand.

cue-1279
01:17:59.848 --> 01:18:09.148
Hello.

cue-1280
01:18:09.148 --> 01:18:13.468
It was cool to watch how you've already
gotten it. Well, amazing. Congrats.

cue-1281
01:18:14.608 --> 01:18:17.918
Yeah. [laughing]

cue-1282
01:18:18.588 --> 01:18:18.728
Yeah.

cue-1283
01:18:19.548 --> 01:18:26.308
No, no, I'm with you. I'm so happy.
[laughing] No, we good. That's so

cue-1284
01:18:26.308 --> 01:18:29.078
beautiful. I'm so happy for you. Next

cue-1285
01:18:29.078 --> 01:18:33.868
step.

cue-1286
01:18:34.908 --> 01:18:36.788
Thank you. I was ready.

cue-1287
01:18:37.468 --> 01:18:39.608
Very good. Thank you. I think we're
getting

cue-1288
01:18:40.388 --> 01:18:41.358
better.

cue-1289
01:18:41.358 --> 01:19:08.908
[laughing]