Elon Musk Sues Sam Altman: 5 Things to Know About the New OpenAI Lawsuit

Elon accuses OpenAI and Altman of violating company principles by pursuing profits

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Tesla (NASDAQ:TSLA) Founder Elon Musk’s new OpenAI lawsuit is grabbing headlines everywhere Friday.

Elon Musk has sued OpenAI and its Chief Executive Sam Altman, accusing them of breaking the company’s own principles. Indeed, Musk alleges that Altman and his company have violated the terms of a contract by putting profit and commercial interests related to artificial intelligence (AI) over the public good.

Musk, who assisted in the creation of OpenAI with Altman and others back in 2015, claims the company’s multibillion-dollar partnership with Microsoft (NASDAQ:MSFT) marks a breach of the company’s founding pledge to carefully develop AI and make the technology open-source and 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 San Francisco Superior Court.

The lawsuit, filed Thursday, Feb. 29, represents a dramatic next chapter of the long-simmering quarrel between the two tech leaders. If you recall, Musk left OpenAI’s board of directors in 2018. Since then, OpenAI has become an industry leader in the generative AI field, creating the wildly popular large language model ChatGPT.

Musk was originally one of OpenAI’s most prominent backers. However, Musk and Altman repeatedly clashed over plans to abandon the nonprofit approach the company initially adopted.

OpenAI was originally founded on the concept of developing AI “for the benefit of humanity” rather than for any one company. However, clearly there have been changes to the organization’s thesis in the time since then.

5 Things to Know About the New OpenAI Lawsuit

  • The lawsuit specifically accuses both OpenAI, Altman and OpenAI president, Greg Brockman, of breaching its contract, violating fiduciary duty, and unfair business practices. The suit seeks a trial by jury.
  • Musk believes OpenAI should be required to make its technology open source, as well as to pay back money earned in violation of its closed-source romp.
  • Interestingly, this isn’t the only high-profile lawsuit against Altman. The New York Times sued both OpenAI and Microsoft in December for alleged copyright infringement on news content used to program its chatbots.
  • From 2016 to 2020, Musk contributed over $44 million to OpenAI, per the lawsuit. Additionally, Musk led the company’s original San Francisco location and covered some monthly expenses. “Without Mr. Musk’s involvement and substantial supporting efforts and resources,” the lawsuit reads, “it is highly likely that OpenAI Inc. would never have gotten off the ground.”
  • Altman has previously expressed concerns over the potential of AI. In 2015, Altman claimed it was impossible to stop AI from progressing, noting, “If it’s going to happen, it seems like it would be good for someone other than Google to do it first.”

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.

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