Elon Musk sues OpenAI and Sam Altman for putting profits over humanity

By Barbara Kollmeyer

Musk bring claims of breach of contract, breach of fiduciary duty and unfair competition

"In reality, however, OpenAI,Inc. has been transformed into a closed-source de facto subsidiary of the largest technology companyin the world: Microsoft."Elon Musk, CEO of Tesla

That was billionaire and Tesla (TSLA) CEO Elon Musk in a lawsuit filed in San Francisco on Thursday against OpenAI and its top executives, accusing them of abandoning the original purpose of developing artificial general intelligence, or AGI, to instead enrich themselves and investor Microsoft (MSFT).

In the suit, Musk bring claims of breach of contract, breach of fiduciary duty and unfair competition against OpenAI, Chief Executive Sam Altman and President Gregory Brockman.

Musk said Altman approached him in 2015 with a proposal to create a non-profit AI lab to catch up with Alphabet-owned Google (GOOGL) in the race for AGI, but with an opposite approach.

In the lawsuit, he said the two executives, together with OpenAI President Gregory Brockman, made a "founding agreement" that the new lab would develop AGI "for the benefit of humanity, not for a for-profit company seeking to maximize shareholder profits."

They also agreed the technology would be open-source - software whose code is not hidden but publicly available - Musk asserted in the suit.

OpenAI released its powerful GPT-4 language model in March 2023, but Musk claims "GPT-4's internal design was kept and remains a complete secret except to OpenAI-and, on information and belief, Microsoft."

In the suit, Musk is demanding that the company return to that original agreement. He has been among the most outspoken to warn about existential threats to humanity from OpenAi, at one point saying "we are summoning the demon," with that technology.

Read: Here's what a neutral chatbot thinks of Elon Musk's lawsuit against OpenAI

The billionaire left OpenAI in 2018 due to what he said was a conflict of interest, though reports citing sources have said that his exit was due to the belief OpenAI had fallen too far behind Google.

OpenAI was the subject of high drama last year when Altman was dismissed, and then brought back, as head of the company that produces ChatGPT.

Upon his return, OpenAI announced a new board, led by Bret Taylor, former co-CEO of Salesforce (CRM) named as chairman, with former U.S. Treasury Secretary Larry Summers also on board. New board members are expected to announced in March, the Washington Post reported on Thursday, citing sources.

Musk directed criticism at the board as well, in his lawsuit.

"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. Its technology, including GPT-4, is closed-source primarily to serve the proprietary commercial interests of Microsoft," he said.

MarketWatch has reached out to OpenAI and Microsoft for comment.

Musk created his own AI startup in 2023 - xAI - that he said would be aimed at trying to understand the universe. XAI's first technology was a chatbot called Grok, though only available to X users who pay for a subscription to that social media site have access.

-Barbara Kollmeyer

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03-01-24 1037ET

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