Elon Musk sues OpenAI for abandoning original mission for profit

Billionaire entrepreneur Elon Musk has sued ChatGPT-maker OpenAI and its CEO, Sam Altman, alleging they abandoned the startup's original mission to develop artificial intelligence for the benefit of humanity, not for profit.

The lawsuit, filed late on Thursday in California Superior Court in San Francisco, marks the culmination of Musk's long-standing opposition to the startup he co-founded. OpenAI, which has become the face of generative AI, partly due to billions of dollars in funding from Microsoft, saw Musk establish his own artificial intelligence startup, xAI, launched last July.

Musk's lawsuit alleges a breach of contract, stating that Altman and co-founder Greg Brockman originally approached him to create an open-source, non-profit company. However, the startup established in 2015 is now focused on generating profits.

According to the lawsuit, OpenAI's three founders initially agreed to work on artificial general intelligence (AGI), a concept where machines could handle tasks like humans, but in a way that would "benefit humanity." Sam Altman, an AI pioneer, stood out as CEO at OpenAI and, according to the Bloomberg Billionaires Index, is worth at least $2 billion. This figure does not include his stake in OpenAI, recently valued at $86 billion.

OpenAI would also work in opposition to Alphabet Inc's Google, which Musk believed was developing AGI for profit, posing grave risks.

Instead, OpenAI "set the founding agreement aflame" in 2023 when it released its most powerful language model GPT-4 as essentially a Microsoft product, the lawsuit alleged.

Musk seeks a court ruling compelling OpenAI to make its research and technology available to the public and preventing the startup from using its assets, including GPT-4, for the financial gains of Microsoft or any individual.

OpenAI's top executives rejected several claims made by Musk in his lawsuit, Axios reported on Friday, citing a memo.

"It was never going to be a cakewalk," Altman said in his note, also seen by Axios. "The attacks will keep coming."

Musk is also seeking a ruling that GPT-4 and a new, more advanced technology called Q* would be considered AGI and therefore outside of Microsoft's license to OpenAI.

Musk, who runs electric vehicle maker Tesla, rocket maker SpaceX, and social media platform X, decided to try to seize control of OpenAI from Altman and the other founders in late 2017. He aimed to convert it into a commercial entity in partnership with Tesla, utilizing the automaker's supercomputers, according to one source with knowledge of the situation.

Altman and others resisted, and Musk resigned, saying he wanted to focus on Tesla's AI projects. He announced his exit to OpenAI staff in February 2018 during a meeting at which Musk called for OpenAI to increase its development speed, which one researcher called reckless, the source said.

Since then, Musk has on several occasions called for regulation of AI.

"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," said Giuseppe Sette, president and co-founder of market research firm Toggle AI.

OpenAI's tie-up with Microsoft is under antitrust scrutiny in the U.S. and Britain following a boardroom battle last year that resulted in the sudden ouster and return of Altman and creation of a new temporary board.

Some legal experts said Musk's allegations of breach of contract, based partly on an email between Musk and Altman, might not hold up in court.

While contracts can be formed through a series of emails, the lawsuit cites an email that appears to look like a proposal and a "one-sided discussion," said Brian Quinn, a law professor at Boston College Law School.

"To the extent Musk is claiming that the single e-mail in Exhibit 2 is the 'contract,' he will fall well short," Quinn said.

MUSK's xAI

Musk's rival AI effort with xAI comprises engineers hired from some of the top U.S. technology firms he hopes to challenge, such as Google and Microsoft.

The startup began rolling out its ChatGPT competitor Grok for Premium+ subscribers of social media platform X in December and aims to create what Musk has said would be a "maximum truth-seeking AI."

According to xAI's website, the startup is a separate company from Musk's other businesses but will work closely with X and Tesla.

Musk has also made waves about his interest in artificial intelligence via Tesla. In January, he stirred controversy with Tesla shareholders, saying he felt uncomfortable growing the carmaker into a leader in AI and robotics unless he had at least 25 percent voting control of the company. Musk, who ranked second on the Forbes Real-Time Billionaires List on Friday, at an estimated worth of $210.6 billion, currently owns about 13 percent of Tesla.

Musk, who has called AI a "double-edged sword," was among experts and executives who last year called for a six-month pause in developing systems more powerful than OpenAI's GPT-4, citing great risks to humanity and society.

Since ChatGPT's debut, companies have adopted it for a range of tasks from summarizing documents to writing computer code, setting off a race among Big Tech companies to launch offerings based on generative AI.

(With input from Reuters)