Elon Musk sues OpenAI and Altman for breaching firm's founding mission

Saritha Rai, Bloomberg News on

Published in Business News

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 is no longer involved, 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. Musk also owns the social network X and is raising money for an AI venture called xAI that features its own competing chatbot Grok.

“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 respond to requests for comment.

The case marks an escalation in the 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 Redmond, Washington-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 nonprofit 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.

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 nonprofit irrevocably dedicated to creating safe, open-source AGI for public benefit,” only to then have OpenAI abandon its mission, according to the suit.

Musk’s claim that OpenAI’s close relationship with Microsoft goes against the company’s original commitment to public, open-source AI, will be “an extraordinarily hard claim legally to make,” according to securities attorney and Northwestern University adjunct law professor Andrew Stoltmann. These are often called illusory promises and they generally aren’t enforceable under the law, Stoltmann said, noting that Musk has a history of using lawsuits as a way to send a message.


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