Your gateway to insightful market trends, prudent personal finance advice, and the pulse of global economy.

USA Finance Digest is your one-stop destination for the latest financial news and insights

Your gateway to insightful market trends, prudent personal finance advice, and the pulse of global economy.

OpenAI, the influential artificial intelligence company that ousted and then reinstated its high-profile chief executive three months ago, faces a new drama: a lawsuit from Elon Musk, one of the richest men in the world and a co-founder of the A.I. lab.

Mr. Musk sued OpenAI and its chief executive, Sam Altman, accusing them of breaching a contract by putting profits and commercial interests in developing artificial intelligence ahead of the public good. A multibillion-dollar partnership that OpenAI developed with Microsoft, Mr. Musk said, represented an abandonment of a founding pledge to carefully develop A.I. and make the technology publicly available.

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

The 35-page lawsuit is the latest chapter in a fight between the former business partners that has been simmering for years, and it homes in on unresolved questions in the A.I. community: Will artificial intelligence improve the world or destroy it and should it be tightly controlled or set free?

Mr. Musk, the chief executive of Tesla, and Mr. Altman, as much as anyone in the world, have helped to frame that debate. Mr. Musk helped found OpenAI in 2015 as a response to A.I. work being done at the time by Google. Mr. Musk believed Google and its co-founder, Larry Page, were dismissive of the risks A.I. presented to humanity.

Mr. Musk left OpenAI’s board during a power struggle in 2018. The company went on to become a leader in the field of generative A.I. and created ChatGPT, a chatbot that can produce text and respond to queries in humanlike prose. Mr. Musk, who founded his own A.I. company last year called xAI, said OpenAI was not focused enough on the technology’s risks.

The suit is also the latest twist for a company enmeshed in controversy. In November, OpenAI’s board forced out Mr. Altman and said it no longer trusted him to run the company. He was reinstated just five days later after an employee revolt threatened the future of the company.

Silicon Valley insiders believe that generative A.I., the technology behind ChatGPT, is a once in a generation technology that could transform the tech industry as thoroughly as web browsers did more than 30 years ago.

“The courts of California must decide what OpenAI must do after straying from its original mission,” said Gary Marcus, an A.I entrepreneur and an emeritus professor of psychology and neural science at New York University. “The court of public opinion must decide what it thinks of Musk, who has a fair point about OpenAI but has his own commercial A.I. interests and choices.”

OpenAI declined to comment on the lawsuit. In a message sent to OpenAI employees on Friday afternoon that was viewed by The New York Times, Mr. Altman said that he was confused by Mr. Musk’s argument that building A.I. for the benefit of humanity was at odds with building a business.

Jason Kwon, OpenAI’s chief strategy officer, told OpenAI employees in another message viewed by The Times that the company’s leaders “categorically disagree” with the suit. Mr. Musk’s claims “do not reflect the reality of our work or mission,” he wrote.

The lawsuit adds to an array of problems piling up for OpenAI. The company’s relationship with Microsoft is also facing scrutiny from regulators in the United States, European Union and Britain. It has been sued by The New York Times, several digital outlets, writers 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 became involved with OpenAI because it was created as a nonprofit to develop artificial intelligence for the “benefit of humanity.” A key component of that, the lawsuit said, was to make its technology open source, meaning that 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 being in breach of contract and violating 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 pay back Mr. Musk the money that Mr. Musk gave to the organization. Greg Brockman, the president of OpenAI, is also named as a defendant.

Mr. Musk’s argument hinges on the close partnership between OpenAI and Microsoft. In 2019, Mr. Altman negotiated a deal in which Microsoft agreed to invest $1 billion in OpenAI. The start-up said it would use Microsoft’s cloud computing services exclusively for building and deploying its A.I. In the years since, Microsoft has invested an additional $12 billion in the start-up and is the only company outside of OpenAI with a license to use the raw technology behind GPT-4, the company’s most powerful A.I. technology.

Other companies like Google, Meta and the French start-up Mistral are freely sharing some of their latest technologies with the other companies and researchers.

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

Though Mr. Musk has repeatedly criticized OpenAI for becoming a for-profit company, he hatched a plan in 2017 to wrest control of the A.I. lab from Mr. Altman and its other founders and transform it into a commercial operation that would work alongside his other companies, including the electric carmaker Tesla, and make use of their increasingly powerful supercomputers, people familiar with his plan have said. When his attempt to take control failed, he left the OpenAI board, the people said.

Speaking at The New York Times’s DealBook Summit last year, Mr. Musk said that he wanted to know more about the chaos that unfolded at OpenAI last year, including why Ilya Sutskever, a co-founder, joined with other board members to fire Mr. Altman in November. He said that he was concerned that OpenAI had discovered some dangerous element of A.I., which is a question that his legal team could investigate as part of the lawsuit.

“I have mixed feelings about Sam,” Mr. Musk said at the DealBook conference. Making a reference 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 falling out between Mr. Musk and Mr. Altman has long been a subject 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 that A.I. 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 new A.I. 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 nonprofit,” Mr. Musk said at one point, according to the complaint. “I will no longer fund OpenAI until you have made a firm commitment to stay, or I’m just being a fool who is essentially providing free funding to a startup. Discussions are over.”

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

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

Brian Quinn, a law professor at Boston College, said that Mr. Musk’s complaint made a compelling case that OpenAI had abandoned its roots. But, he said, Mr. Musk probably does not have the standing to bring it, because nonprofit law limits challenges of this type to those made by a nonprofit’s dues-paying members, its own directors or state regulators in Delaware, where OpenAI is registered.

“If he were a member of the board of directors, I would say, ‘Ooh, strong case.’ If this was filed by the Delaware secretary of state, I would say, ‘Ooh they’re in trouble,’” Mr. Quinn said. “But he doesn’t have standing. He doesn’t have a case.”

David A. Fahrenthold contributed reporting.

Share this article
Shareable URL
Prev Post
Next Post
Leave a Reply

Your email address will not be published. Required fields are marked *

Read next
His performance impressed executives at NBC’s parent company, Comcast. In May 2020, Jeff Shell, then the…
Cruise, the driverless car subsidiary of General Motors, said in a report on Thursday that an adversarial…