Elon Musk sues OpenAI over alleged breach of nonprofit agreement

04.03.2024

Elon Musk has initiated legal proceedings against OpenAI and its CEO, Sam Altman, asserting a breach of their nonprofit agreement. The dispute, unfolding in the Superior Court of California for the County of San Francisco, revolves around OpenAI’s deviation from its core mission of advancing open-source artificial general intelligence (AGI) for the betterment of humanity.

Musk, a co-founder and early supporter of OpenAI, contends that Altman and Greg Brockman (another co-founder and current president of OpenAI) persuaded him to fund the startup in 2015 with assurances that it would remain a nonprofit entity. However, according to Musk, OpenAI has strayed from its founding principles through its collaboration with Microsoft, which he alleges prioritizes proprietary technology over the original ethos of open-source advancement.

The legal challenge encompasses allegations of contract breach, breach of fiduciary duty, and unfair business practices. Musk is urging OpenAI to realign with its nonprofit objectives and is seeking an injunction to halt the commercialization of AGI technology.

Central to the dispute is OpenAI’s introduction of GPT-4 in March 2023. Musk argues that unlike its predecessors, GPT-4 signifies a departure towards closed-source models, which he believes serves the financial interests of Microsoft at the expense of OpenAI’s altruistic mission.

Originally established in 2015 as a nonprofit AI research lab, OpenAI transitioned into a commercial entity in 2020. It has since adopted a profit-driven approach, with reported annual revenues exceeding $2 billion.

Musk, a vocal advocate for AI regulation and responsible development, questions the technical expertise of OpenAI’s current leadership and points to Altman’s removal and subsequent reinstatement in November 2023 as evidence of a profit-oriented agenda aligned with Microsoft’s interests.