Elon Musk sues OpenAI and CEO Sam Altman

Elon Musk sued OpenAI and its Chief Executive Officer Sam Altman, alleging they violated the artificial intelligence startup’s founding mission by putting profit ahead of benefiting humanity.

The 52-year-old billionaire, who was a co-founder of OpenAI but no longer has a stake, said in a lawsuit filed late Thursday in San Francisco that the company’s close relationship with Microsoft Corp. has undermined its original mission of creating open-source technology that wouldn’t be subject to corporate priorities.

Musk, who is also CEO of Tesla Inc., has been among the most outspoken about the dangers of AI and artificial general intelligence, or AGI.

The release of OpenAI’s ChatGPT more than a year ago popularized advances in AI technology and raised concerns about the risks surrounding the race to develop AGI, where computers are as smart as an average human.

“To this day, OpenAI Inc.’s website continues to profess that its charter is to ensure that AGI ‘benefits all of humanity,’” the lawsuit said. “In reality, however, OpenAI Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft.”

Spokespeople for OpenAI, Musk and Microsoft didn’t immediately respond to requests for comment.

The case marks an escalation in one of the highest-profile clashes in the emerging field of AI, pitting two of its most prominent players against each other.

It will have implications not just for OpenAI, which is seeking to raise funds at a valuation of $100 billion or more, but also for Microsoft, which has invested about $13 billion in OpenAI.

The Seattle-based firm’s shares have soared 68% in the last year, making it the most valuable company in the world, as it seeks to become a leader in AI adoption.

Musk is suing for breach of contract, breach of fiduciary duty and claims of unfair business practices, among other grievances.

He is bringing the suit in the capacity of a donor to the non-profit parent organization as recently as 2019 and is seeking to force OpenAI to stop benefitting Microsoft and Altman personally.

In the lawsuit, he asks for an order to compel OpenAI to make all of its research and technology open to the public and for Altman to be required to give up any money he has earned as a result of the practices alleged to be unlawful.

Musk is also seeking unspecified damages, which the lawsuit says he would contribute to charity if any compensation is won.

Sam Altman, chief executive officer of OpenAI.

Musk invested tens of millions of dollars in OpenAI, as well as his time and other resources, “on the condition that OpenAI would remain a non-profit irrevocably dedicated to creating safe, open-source AGI for public benefit,” only to then have OpenAI abandon its mission, according to the suit.

Since introducing ChatGPT and GPT-4, the large language model that powers the chatbot, OpenAI has set off a wave of AI adoption in businesses around the world.

Microsoft has been one of the most aggressive in incorporating the technology into its wide array of cloud and enterprise services.

Musk contends that OpenAI’s GPT-4 can be viewed as an AGI system. Altman expects AGI to be reached in the next four to five years, according to a December Time Magazine profile of him.

The world’s richest person, Musk helped establish OpenAI in 2015 but stepped away from the company some two years later over philosophical differences about the development of the technology.

In addition to leading Tesla, he owns the social network X and is raising money for an AI venture he founded called xAI that features its own chatbot, called Grok, which is a direct competitor to OpenAI’s ChatGPT and Dall-E image generator.

The lawsuit argues that Musk first grew alarmed about powerful AI falling into corporate control when Google moved to buy DeepMind, the British research lab.

Musk recruited Luke Nosek, who earlier had co-founded PayPal with Musk, in a bid to buy DeepMind in late 2013. They ultimately failed and Google acquired DeepMind a year later.

In the filing, Musk took aim at the restructuring of OpenAI’s leadership last year, a tumultuous period during which Altman was ousted as CEO and then quickly reinstated with support from Microsoft.

Musk argued in the suit that Altman, OpenAI President Greg Brockman and Microsoft worked together to oust the majority of the startup’s board, who had been responsible for enforcing its original mission of developing technology for the benefit of humanity.

“Altman hand-picked a new board that lacks similar technical expertise or any substantial background in AI governance, which the previous board had by design,” the lawsuit said.

“The new board consisted of members with more experience in profit-centric enterprises or politics than in AI ethics and governance. They were also reportedly ‘big fans of Altman.’”

The Securities and Exchange Commission is investigating whether the company misled its investors during that process last year, The Wall Street Journal reported.

Other regulatory agencies, including the European Union and multiple US authorities are also probing the relationship between OpenAI and Microsoft.

The concerns broadly speak to whether OpenAI has been transparent enough about its for-profit dealings and whether its for-profit partnerships are too powerful.

The suit also asks for more scrutiny on Altman’s actions personally, and “the board’s ability to control Mr. Altman’s use of OpenAI to advance his own economic interests, which so far appear to have gone unchecked.”

The suit cites Altman’s signing of a letter of intent in 2019, “to buy $51 million worth of chips from a start-up in which Mr. Altman was heavily invested.”

While Musk is publicly combative and outspoken on a wide range of issues, the case is a rather unusual tactic for the entrepreneur who isn’t known for filing frivolous lawsuits.

Until his fight over Twitter, which he bought in 2022 and has since renamed X, he has almost always been on the defensive side of lawsuits.

One notable exception was when SpaceX, another company Musk heads, sued the US military over government contracts awarded to Boeing Co. and Lockheed Martin Corp. Musk later dropped the suit.


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Elon Musk sues OpenAI and CEO Sam Altman