OpenAI, the artificial intelligence powerhouse that ousted and then reinstated its high-ranking CEO three months ago, is facing a new drama: a lawsuit from Elon Musk, one of the world’s richest men and co-founder of the AI lab.
Mr. Musk sued OpenAI and its CEO, Sam Altman, accusing them of breaching a contract by putting profits and commercial interests in AI development ahead of the public good. A multibillion-dollar partnership that OpenAI developed with Microsoft, Mr. Musk said, represented an abandonment of a founding promise to carefully develop artificial intelligence and make the technology available to the public.
“OpenAI has become a closed-source de facto subsidiary of the largest technology company, Microsoft,” says the lawsuit filed Thursday in San Francisco Superior Court.
The 35-page lawsuit is the latest chapter in a feud between the former business partners that has simmered for years and is home to unresolved questions in the AI community: Will AI improve the world or destroy it and whether it is tightly controlled or free ;
Mr. Musk, Tesla’s chief executive, and Mr. Altman, as much as anyone in the world, helped shape that conversation. Mr. Musk helped found OpenAI in 2015 in response to the artificial intelligence work being done at the time by Google. Mr. Musk believed that Google and its co-founder, Larry Page, were defying the dangers that artificial intelligence presented to humanity.
Mr Musk stepped down from OpenAI’s board during a power struggle in 2018. The company became a leader in genetic artificial intelligence and created ChatGPT, a chatbot that can produce text and answer questions in human prose. Mr Musk, who founded his own artificial intelligence company last year called xAI, said OpenAI did not focus enough on the risks of the technology.
The suit is also the latest reversal for a company embroiled in controversy. In November, OpenAI’s board ousted Mr. Altman and said it no longer trusted him to run the company. It was reinstated just five days later after a worker revolt threatened the company’s future.
Silicon Valley insiders believe that genetic artificial intelligence, the technology behind ChatGPT, is a next-generation technology that could transform the tech industry as radically as web browsers did more than 30 years ago.
“California courts have to decide what OpenAI should do after it moves away from its original mission,” said Gary Marcus, an AI entrepreneur and professor emeritus of psychology and neural science at New York University. “The court of public opinion must decide what to think of Musk, who has a fair view of OpenAI, but has his own commercial interests and AI choices.”
OpenAI declined to comment on the lawsuit. In a message sent to OpenAI employees on Friday afternoon, seen by The New York Times, Mr. Altman said he was confused by Mr. Musk’s argument that building artificial intelligence to benefit humanity was at odds with building a business.
Jason Kwon, OpenAI’s chief strategy officer, told OpenAI employees in another message seen by the Times that company leaders “vehemently disagree” with the lawsuit. Mr. Musk’s claims “do not reflect the reality of our work or mission,” he wrote.
The lawsuit adds to a string of problems piling up for OpenAI. The company’s relationship with Microsoft also faces scrutiny from regulators in the United States, the European Union and Britain. It has been sued by The New York Times, several digital outlets, authors and computer programmers for scraping copyrighted material to train its chatbot. And the Securities and Exchange Commission is investigating Mr. Altman and OpenAI.
Mr Musk’s lawsuit said he got involved with OpenAI because it was created as a non-profit organization to develop artificial intelligence for the “benefit of humanity”. A key element of that, the lawsuit said, was to make the 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 Mr. Altman of breach of contract and breach of fiduciary duty, as well as unfair business practices. Mr. Musk is asking that OpenAI be required to open up its technology to others, and that Mr. Altman and others return to Mr. Musk the money Mr. Musk gave to the organization. Greg Brockman, president of OpenAI, is also named as a defendant.
Mr. Musk’s argument hinges on the close collaboration between OpenAI and Microsoft. In 2019, Mr. Altman negotiated a deal in which Microsoft agreed to invest $1 billion in OpenAI. The startup said it would use Microsoft’s cloud computing services exclusively to build and develop its AI In recent years, Microsoft has invested an additional $12 billion in the startup and is the only company outside of OpenAI licensed to use the raw technology behind GPT-4, the company’s most powerful AI technology.
Other companies such as Google, Meta and the French start-up Mistral freely share some of their latest technologies with other companies and researchers.
The lawsuit could expose OpenAI to a lengthy and invasive legal review that reveals more about Mr. Altman’s firing and OpenAI’s pivot from a nonprofit to a for-profit company. That change, which was planned by Mr. Altman in late 2018 and early 2019, has been the source of attrition at OpenAI for years and contributed to the board’s decision to fire him as CEO.
Although Mr. Musk has repeatedly criticized OpenAI for becoming a for-profit company, he hatched a plan in 2017 to wrest control of the AI lab from Mr. Altman and its other founders and turn it into a commercial business that would operate with the other companies, including electric car maker Tesla, and using their increasingly powerful supercomputers, people familiar with his plan said. When his bid to take control failed, he left OpenAI’s board, the people said.
Speaking at the New York Times’ DealBook Summit last year, Mr. Musk said he wanted to know more about the chaos that unfolded at OpenAI last year, including why Ilya Sutskever, a co-founder, joined other board members in firing the Mr. Altman in November. He said he was concerned that OpenAI had discovered some dangerous element of artificial intelligence, which is a question his legal team could investigate as part of the lawsuit.
“I have mixed feelings about Sam,” Mr. Musk said at the DealBook conference. Referring to a powerful ring in “The Lord of the Rings,” he added, “The ring of power can corrupt and he has the ring of power.”
Mr. Musk did not respond to requests for comment.
The feud between Mr. Musk and Mr. Altman has long been a matter of intrigue in Silicon Valley. The men first met during a tour of SpaceX, Mr Musk’s rocket company, and later bonded over their shared concerns about the threat artificial intelligence could pose to humanity.
According to the lawsuit, OpenAI’s nonprofit status was a major source of friction as tensions rose between company executives interested in making money from the new AI technology and Mr. Musk, who wanted it to remain a research lab.
“Either go do something on your own or continue with OpenAI as a non-profit,” Mr. Musk said at one point, according to the complaint. “I will no longer fund OpenAI until you make a firm commitment to stay, or I’m just a fool essentially giving free funding to a startup. The discussions are over.”
The lawsuit seeks to portray Mr. Musk as an integral figure in the development of OpenAI. From 2016 to 2020, Mr. Musk contributed more than $44 million to OpenAI, according to the lawsuit. He also leased the company’s original office space in San Francisco and paid the monthly expenses. He was personally involved in recruiting Mr. Sutskever, a top researcher at Google, to be OpenAI’s chief scientist, according to the complaint.
“Without Mr. Musk’s involvement and substantial supporting efforts and resources,” the lawsuit says, “it is highly likely that OpenAI Inc. it would never have taken off.”
Brian Quinn, a law professor at Boston College, said Mr. Musk’s complaint made a compelling case that OpenAI had abandoned its roots. But, he said, Mr. Musk probably doesn’t have the ability to bring it because the nonprofit law limits challenges of this type to those made by a nonprofit’s dues-paying members, its own directors or state regulatory authorities in Delaware, where OpenAI is registered.
“If he was on the board, I’d be like, ‘Oh, strong case.’ If this had been filed by the Delaware Secretary of State, I would have said, “Oh, they have a problem,” Mr. Quinn said. “But he has no standing. He has no case.”
David A. Fahrenthold contributed to the report.
