Billionaire Elon Musk is suing OpenAI and its CEO Sam Altman over what he says is a betrayal of the ChatGPT maker’s founding aims of benefiting humanity rather than pursuing profits.
In a lawsuit filed in the San Francisco Superior Court, Mr Musk said that when he helped bankroll OpenAI’s creation, he secured an agreement with Mr Altman and Greg Brockman, the company’s president, to keep the artificial intelligence firm as a nonprofit which would develop technology for the benefit of the public.
Under its founding agreement, OpenAI would also make its code open to the public instead of walling it off for any private company’s gains, the lawsuit says.
However, by embracing a close relationship with Microsoft and accepting billions of dollars from the tech giant, OpenAI and its top executives have set that pact “aflame” and are “perverting” the company’s mission, Mr Musk alleges in the lawsuit.
OpenAI has declined to comment on the lawsuit, while Mr Altman has since replied “anytime” to a 2019 Twitter post by Mr Musk in which he thanked Mr Altman for supporting his electric vehicle company Tesla.
Meanwhile, Mr Musk has responded to a series of memes posted about the lawsuit on his social media platform X, which was formerly Twitter.
“OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft,” Mr Musk’s lawsuit says.
It also accuses OpenAI of “not just developing but is actually refining” AGI — referring to artificial general intelligence that is as smart (or smarter) than humans — “to maximize profits for Microsoft, rather than for the benefit of humanity”.
Mr Musk has sought a court ruling that would compel OpenAI to make its research and technology available to the public and prevent the company from using its assets for financial gains of Microsoft or any individual.
Mr Musk is also seeking a ruling that OpenAI’s GPT-4 and a new and more advanced technology called Q* would be considered AGI and therefore outside of Microsoft’s license with the company.
OpenAI’s top executives rejected several claims that Mr Musk made in his lawsuit, Axios reported, citing a memo.
“It was never going to be a cakewalk,” Mr Altman reportedly said in his note. “The attacks will keep coming.”
Legal experts unsure of Musk’s case
Mr Musk is suing over breach of contract, breach of fiduciary duty and unfair business practices.
Those claims are unlikely to succeed in court, but that might not be the point for Mr Musk, who is getting his take and personal story on the record, said Anupam Chander, a law professor at Georgetown University.
“Partly there’s an assertion of Elon’s founding role in OpenAI and generative AI technology, in particular his claim he named OpenAI and he hired the key scientist and that he was the principal funder of its early years,” Mr Chander said.
“In some sense it’s a lawsuit that tries to establish his own place in the history of generative AI.”
Mr Musk was an early investor in OpenAI when it was founded in 2015 and co-chaired its board alongside Mr Altman.
In the lawsuit, he said he invested “tens of millions” of dollars in the nonprofit research laboratory, which now has a for-profit subsidiary.
Mr Musk resigned from the board in early 2018 in a move that OpenAI said at the time would prevent conflicts of interest, as the Tesla CEO was recruiting AI talent to build self-driving technology at the electric car maker.
Mr Musk has since said he also had disagreements with the company’s direction, but he continued to donate to the nonprofit.
Later in 2018, OpenAI filed papers to incorporate its for-profit arm and began shifting most of its workforce to that business, but retained a nonprofit board of directors that governed the company.
Microsoft made its first $US1 billion ($1.5 billion) investment in the company in 2019, and the next year signed an agreement that gave the software giant exclusive rights to its AI models. That licence is supposed to expire once OpenAI has created an AGI, the company has said.
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OpenAI’s unveiling of ChatGPT in late 2022 brought worldwide fame to the firm and helped spark a race by tech companies to capitalise on the public’s fascination with the technology.
When the nonprofit board abruptly fired Mr Altman as CEO late last year, for reasons that still haven’t been fully disclosed, it was Microsoft that helped drive the push that brought Mr Altman back as CEO and led most of the old board to resign.
Mr Musk’s lawsuit alleged that those changes caused the checks and balances protecting the nonprofit mission to “collapse overnight”.
Giuseppe Sette, president and co-founder of market research firm Toggle AI, said: “We expect this will have zero impact on AI development inside or outside of OpenAI, and would chalk it up to Musk seeking to get a slice of equity in a company he effectively founded but in which he holds no stake.”
One of Mr Musk’s claims is that the directors of the non-profit have failed to uphold their obligations to follow its mission, but Dana Brakman Reiser, a professor at Brooklyn Law School, is skeptical that Mr Musk had standing to bring that claim.
“It would be very worrisome if every person who cared about or donated to a charity could suddenly sue their directors and officers to say, ‘You’re not doing what I think is the right thing to run this non-profit,'” she said.
In general, only other directors or an attorney-general, for example, could bring that type of suit, she said.
Even if Mr Musk invested in the for-profit business, his complaint seems to be that the organisation is making too much profit in contradiction to its mission, which includes making its technology publicly available.
“I care about non-profits actually following the mission that they set out and not being captured for some kind for profit purpose. That is a real concern,” Ms Brakman Reiser said. “Whether Elon Musk is the person to raise that claim, I’m less sure.”
Whatever the legal merits of the claims, a brewing courtroom fight between Mr Musk — who is one of the wealthiest people in the world, and has his own AI startup called xAI — and Mr Altman could offer the public a peek into the internal debates and decision-making at OpenAI, though the company’s lawyers will likely fight to keep some of those documents confidential.
“The discovery will be epic,” posted venture capitalist Chamath Palihapitiya on X, to which Mr Musk: “Yes.”
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