Elon Musk sues OpenAI and Sam Altman for violating company principles

Elon Musk sued OpenAI and its CEO Sam Altman, accusing them of breaching a contract by putting profits and commercial interests in the development of artificial intelligence ahead of the public good.

Musk, who helped create OpenAI with Altman and others in 2015, said the company’s multibillion-dollar partnership with Microsoft represented an abandonment of his founding promise to carefully develop AI and make the technology publicly available.

“OpenAI has transformed itself into a de facto closed-source subsidiary of the largest technology company, Microsoft,” says the lawsuit, which was filed Thursday in San Francisco Superior Court.

The lawsuit is the latest chapter in a feud between former business partners that has been simmering for years. After Musk left the OpenAI board of directors in 2018, the company became a leader in the field of generative AI and created ChatGPT, a chatbot that can produce text and answer queries in human prose. Musk, who has his own artificial intelligence company called xAI, said OpenAI did not focus enough on the risks of the technology.

Silicon Valley insiders believe that generative AI, the technology behind ChatGPT, is a once-in-a-generation technology that could transform the tech industry as profoundly as web browsers did more than 30 years ago. But others, most notably Musk, have said the technology can also be dangerous, perhaps even destroying humanity.

The lawsuit adds to a series of problems that are piling up for OpenAI. The company’s relationship with Microsoft also faces scrutiny from regulators in the United States, the European Union and Britain. He has been sued by The New York Times, several digital media outlets, writers and computer programmers for extracting copyrighted material to train his chatbot. And the Securities and Exchange Commission is investigating Altman and OpenAI after the company’s board of directors ousted him in November, before reinstating him days later.

Musk’s lawsuit said he became involved with OpenAI because it was created as a nonprofit organization to develop artificial intelligence for the “benefit of humanity.” A key component of this, according to the lawsuit, was making his technology open source, meaning it would share the underlying software code with the world. Instead, the company created a for-profit business unit and restricted access to its technology.

The lawsuit, which seeks a jury trial, accused OpenAI and Altman of breach of contract and fiduciary duty, as well as unfair business practices. Musk is calling for OpenAI to be required to open its technology to others and for Altman and others to return the money Musk gave to the organization. Greg Brockman, president of OpenAI, is also accused.

OpenAI declined to comment on the lawsuit.

The lawsuit could expose OpenAI to a lengthy and invasive legal review that reveals more about Altman’s firing and OpenAI’s pivot from a nonprofit to a for-profit company. That change, which was engineered by Altman in late 2018 and early 2019, has been the source of murmuring at OpenAI for years and contributed to the board’s decision to fire him as CEO.

Although Musk has repeatedly criticized OpenAI for becoming a for-profit company, in 2017 he hatched a plan to wrest control of the AI ​​lab from Altman and his other founders and transform it into a commercial operation that would run alongside his other companies. , including electric car maker Tesla, and make use of its increasingly powerful supercomputers, people familiar with his plan said. When his bid to take control failed, he left OpenAI’s board of directors, the people said.

Speaking at the New York Times DealBook Summit last year, Musk said he wanted to know more about the chaos that unfolded at OpenAI last year, including why co-founder Ilya Sutskever joined other board members in firing the Mr. Altman in November. He said he was concerned that OpenAI had discovered some dangerous element of AI, which is an issue his legal team could investigate during the lawsuit.

“I have mixed feelings about Sam,” Musk said at the DealBook conference. Referencing a powerful ring in “The Lord of the Rings,” he added: “The ring of power can corrupt, and he has the ring of power.”

Musk did not respond to requests for comment.

The dispute between Musk and Altman has long been a topic of intrigue in Silicon Valley. The men first met during a tour of SpaceX, Musk’s rocket company, and later bonded over their shared concerns about the threat AI could pose to humanity.

According to the lawsuit, OpenAI’s nonprofit status was a major source of friction, as tensions grew between company executives interested in trying to make money from the new AI technology and Musk, who wanted to remain a research laboratory.

“Either do something on your own or continue OpenAI as a nonprofit,” Musk said at one point, according to the complaint. “I will no longer fund OpenAI until you have firmly committed to staying, or I am just being a fool who is basically providing free funding to a startup. “The discussions are over.”

The lawsuit attempts to show Musk as an indispensable figure in the development of OpenAI. From 2016 to 2020, Musk contributed more than $44 million to OpenAI, according to the lawsuit. He also rented the company’s initial office space in San Francisco and paid monthly expenses. According to the complaint, he was personally involved in recruiting Mr. Sutskever, a prominent Google research scientist, to be OpenAI’s chief scientist.

“Without Mr. Musk’s involvement and his significant supporting efforts and resources,” the lawsuit says, “it is highly likely that OpenAI Inc. would never have gotten off the ground.”