"Elon Musk sued OpenAI and its Chief Executive Sam Altman, alleging they broke the artificial-intelligence company's founding agreement by giving priority to profit over the benefits to humanity.
The lawsuit, filed late on Thursday in a San Francisco court, marks a dramatic escalation of a long-simmering feud between tech industry titans over the future of AI. It pits Musk, one of the world's richest people, against the world's most valuable company, Microsoft, and Altman, one of Silicon Valley's leading entrepreneurs.
It also sets up a potential courtroom debate over a topic that has roiled policymakers and businesses for much of the past year: How scared should we all be about advances in AI -- and how soon?
Musk, who helped found the ChatGPT maker in 2015, claims OpenAI's close relationship with Microsoft goes against the company's original commitment to public, open-source AI.
Upon founding OpenAI, Musk and co-founders Altman and Greg Brockman agreed to pursue the nonprofit approach "for the benefit of humanity," and not any single company, according to the court filing. At the time, the founders' goal was to create a nonprofit counterweight to Alphabet's Google, which Musk thought was too powerful in AI.
In an email to Musk in 2015, Altman said he thought it wasn't possible to stop humanity from developing AI and added, "If it's going to happen, it seems like it would be good for someone other than Google to do it first," according to the court filing.
Musk was OpenAI's primary benefactor at its outset. But after Musk clashed with Altman over control and plans to create a for-profit entity, the lawsuit contends, he stepped down as co-chair in 2018 and slowed his financial contributions.
Microsoft then stepped in. The tech giant, which first invested in OpenAI in 2019, ramped up the partnership last year. It invested $13 billion in exchange for what is effectively a 49% stake in the earnings of OpenAI's for-profit arm.
OpenAI is still governed by a nonprofit, which controls the for-profit arm. Last year, the board of the nonprofit fired Altman for failing to be "consistently candid" in his dealings with the board. The decision sparked an employee revolt, setting off five days of chaos that led to Altman's reinstatement as CEO but not on the board.
Internally, some OpenAI employees have taken to calling the episode "the blip," a person familiar with the matter said. A law firm hired by the board will soon complete a report on Altman's firing.
The startup also recently closed a tender offer valuing it at more than $80 billion.
But Musk's lawsuit -- which argues that the new board members are unqualified to govern AI technology -- shows that OpenAI is still grappling with the fallout from its leadership turmoil. Additionally, the Securities and Exchange Commission is scrutinizing Altman's internal communications as part of an investigation into whether OpenAI misled investors.
In emails sent to employees Friday, Altman and Chief Strategy Officer Jason Kwon said OpenAI's success made it a target for lawsuits and regulatory inquiries.
"We believe the claims in this suit may stem from Elon's regrets about not being involved with the company today," Kwon wrote in a memo reviewed by The Wall Street Journal.
Musk has long warned of what he calls a grave threat to humanity from artificial general intelligence, or AGI -- in essence, that machines are able to reason like humans.
In the lawsuit, Musk asks the court to rule that OpenAI has effectively achieved an early version of AGI with some of its tools. He also points to how Microsoft's deal with OpenAI only gives it access to the company's pre-AGI technology -- effectively arguing that Microsoft should remove the latest version of ChatGPT from its products.
"OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft," the suit says. "Under its new board, it is not just developing but is actually refining an AGI to maximize profits for Microsoft, rather than for the benefit of humanity." The lawsuit doesn't mention that last year Musk founded his own AI company called xAI.
In their memos, Altman and Kwon said the company has tried to strike the balance between creating an AI system with guardrails while also commercializing the product so it can generate the cash needed to support AI research. Kwon noted that OpenAI is independent and sometimes directly competes with Microsoft. He also said GPT-4 couldn't be considered AGI at this point.
Musk is bringing claims including breach of contract, breach of fiduciary duty and unfair business practices against OpenAI and the two co-founders, Altman and Brockman. In the lawsuit, he asked for an order compelling OpenAI to make all of its research and technology open to the public and for the company and Altman to be required to give up all money received as a result of the practices alleged to be unlawful.
Musk didn't respond to a request for comment.
Altman has said OpenAI takes its safety obligations seriously and that the technology should be developed with great caution. But he says he also believes it offers immense commercial possibilities.
While the lawsuit casts Musk as being a defender of OpenAI's founding principles, some observers see the lawsuit more as an example of sour grapes.
"Mostly, this is an argument that Altman hasn't managed the various entities as Musk would prefer," Ann M. Lipton, a law professor at Tulane University, wrote on social media.
Much of the lawsuit rests on claims that OpenAI's co-founders agreed with Musk that AI should be controlled for the benefit of all humanity to avoid potential existential risks. Musk argues that his early financing of OpenAI was contingent on those promises. The lawsuit says he contributed more than $44 million to OpenAI between 2016 and 2020. It also says he paid its initial office rental expenses and expended significant time helping with early hiring.
In the memo to employees, Kwon said OpenAI's early founders discussed a for-profit entity seriously with Musk, but he insisted on "full initial control and majority equity." Musk also suggested merging OpenAI into Tesla, Kwon said." [1]
1. Musk Lawsuit Takes On OpenAI, Its CEO --- Billionaire alleges the ChatGPT maker broke founding agreement, escalating tech feud. Vipers, Gareth; Schechner, Sam. Wall Street Journal, Eastern edition; New York, N.Y.. 02 Mar 2024: A.1.
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