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

Saritha Rai, Bloomberg News on

Published in Science & Technology News

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.

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, according to a person familiar with the matter. The Wall Street Journal earlier reported on the probe. 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.”

 

“Mr. Musk is a party to OpenAI’s founding agreement and that gives him the right to sue if he believes Mr. Altman and others are straying from the promises they made in that agreement,” said Larry Hamermesh, a retired University of Pennsylvania law professor who is an expert in Delaware corporate law.

Musk has been building a trail of legal challenges. Last November he sued the nonprofit group Media Matters for America, accusing it of “maliciously” driving away advertisers from X, and in July sued another nonprofit, The Center for Countering Digital Hate. A judge on Thursday looked set to dismiss that case.

In December, X lost its effort to block a California law that seeks to control toxic posts on social media by requiring companies to disclose their content-moderation polices.

Musk has also threatened to sue over artificial intelligence before. Last April he posted on Twitter, now X, that he might take legal action against Microsoft for what he said was its use of the social media platform’s data to train its AI technology. “They trained illegally using Twitter data. Lawsuit time,” he wrote. And he threatened to go after Meta Platforms Inc.’s Threads, after it launched a social media service that rivals X.

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. SpaceX is now suing to get the National Labor Relations Board declared unconstitutional after the US labor agency accused the company of retaliating against eight employees who circulated an open letter critical of Musk.

(With assistance from Agatha Cantrill, Mark Bergen, Bob Van Voris, Jef Feeley and Chris Dolmetsch.)


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