Elon Musk Revives Lawsuit Against OpenAI and Co-founders

Elon Musk leaves a U.S. Senate bipartisan Artificial Intelligence Insight Forum at the U.S. Capitol in Washington, on Sept. 13, 2023. (Mandel Ngan/AFP via Getty Images)

Elon Musk, the CEO of Tesla, X, and SpaceX, has reignited a legal battle against OpenAI and its co-founders, Sam Altman and Greg Brockman, months after initially dropping his lawsuit.

The revived complaint, filed Aug. 5 in the U.S. District Court for the Northern District of California, accuses the defendants of multiple counts, including fraud, breach of contract, and violations of federal civil racketeering laws.

Musk had originally sued in February before dropping the suit in June with no explanation given at the time.

Musk’s revived lawsuit includes several allegations against OpenAI, Altman, and Brockman—at the heart of which is a claim that Altman and Brockman “intentionally courted and deceived” Musk into co-founding OpenAI under false pretenses.

Musk asserted in the 81-page suit that he was misled into believing that OpenAI would be a nonprofit organization focused on developing artificial intelligence (AI) technologies “for the benefit of humanity,” operating as a counterbalance to for-profit tech giants.

According to the lawsuit, OpenAI’s co-founders allegedly manipulated Musk by making repeated promises and assurances that the organization would remain open-source and not driven by profit.

The suit defines “open source” as the practice of making AI technology and research freely accessible to the public, allowing for transparency and collaboration.

“Altman assured Musk that the non-profit structure guaranteed neutrality and a focus on safety and openness for the benefit of humanity, not shareholder value,” the suit claimed. “But as it turns out, this was all hot-air philanthropy—the hook for Altman’s long con.”

Musk claims that these representations were part of a scheme to attract significant funding and expertise, which he provided, including “tens of millions of dollars” and the recruitment of top AI scientists.

The complaint further accuses Altman and Brockman of engaging in “rampant self-dealing” and transforming OpenAI into a for-profit entity in partnership with Microsoft, thereby abandoning its original mission.

Musk argued that OpenAI’s pivot to a for-profit model has resulted in substantial unjust enrichment for the defendants, which he contends was at the expense of the nonprofit’s mission.

Company Responds to Lawsuit

OpenAI responded to the latest legal filing in a statement.

“As we said about Elon’s initial legal filing, which was subsequently withdrawn, Elon’s prior emails continue to speak for themselves,” a spokesperson for the company told The Associated Press in an emailed statement.

In March, OpenAI released emails purportedly written by Musk showing initial support for making the company for-profit to secure the necessary funding to compete with Google DeepMind. Musk also supported the idea of merging OpenAI with Tesla.

“We may wish it otherwise, but, in my and [redacted]’s opinion, Tesla is the only path that could even hope to hold a candle to Google. Even then, the probability of being a counterweight to Google is small. It just isn’t zero,” Musk wrote in an email dated Feb. 1, 2018.

Musk’s legal team has outlined several demands for relief, including compensatory and punitive damages, restitution, and surrendering ill-gained profits.

The lawsuit seeks to impose a “constructive trust” on the alleged ill-gotten gains of the defendants, demands an accounting of all profits derived from the purported misconduct, and requests a judicial declaration that the licensing agreement between OpenAI and Microsoft is “null and void” or that certain OpenAI technologies fall outside the scope of this license.

Additionally, the complaint seeks an injunction to prevent further harm, alleging that the defendants’ actions have caused substantial injury to Musk’s reputation and commercial interests, impacting his ability to recruit leading scientists.