Elon Musk filed a lawsuit against OpenAI and its CEO Sam Altman on Friday, alleging that the ChatGPT maker has abandoned its mission to benefit humanity at a profit-driven pace.
However, some legal experts who spoke to ABC News are skeptical of Musk’s case.
Tesla and X CEO Musk said he reached an agreement with company leaders, including Altman, on the firm’s nonprofit route after funding the company at an early stage, according to the lawsuit filed in San Francisco Superior Court. Reviewed by ABC News.
Musk did not immediately respond to ABC News’ request for comment. Neither did Tesla, Altman or OpenAI.
Musk said he “ignited the Founding Agreement” last year by launching ChatGPT-4, the most powerful version of the company’s popular chatbot, and making the technology available to tech giant Microsoft under an exclusive licensing agreement.
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“OpenAI, Inc. has been transformed into a de facto closed-source subsidiary of Microsoft, the world’s largest technology company,” Musk said in the lawsuit.
Legal experts said the case focuses on the founding agreement claimed by Musk, which he said took place at the firm’s inception.
Typically, agreements formed between a top investor and company leadership are set out in writing with concrete terms, leaving Musk in a difficult position as he tries to invoke verbal commitments that appear to have been made years ago without a formal contract, experts added. .
Musk said in the lawsuit that the agreement was mentioned in a legal filing when OpenAI was founded.
“Verbal promises at the beginning of a relationship that you would file a lawsuit are unusual,” Dave Hoffman, a corporate law professor at the University of Pennsylvania, told ABC News. “This feels like a weak thing to start with.”
Paul Barrett, a professor at New York University School of Law and deputy director of the NYU Stern Center for Business and Human Rights, also expressed skepticism about Musk’s claims about OpenAI’s founding mission. Barrett said the company likely addressed potential legal pitfalls when it added its for-profit operation in 2019.
“I assume OpenAI hired competent lawyers who structured the transaction so that it was legal,” Barrett told ABC News.
The lawsuit alleges that Musk, Altman and OpenAI President Greg Brockman reaffirmed the founding agreement in text messages in subsequent years.
“[I] Stay excited about the nonprofit!” Altman wrote to Musk in 2017, according to the lawsuit.
Musk, who helped fund OpenAI, last year founded a rival artificial intelligence company called xAI, which is building a model to compete with ChatGPT.
Musk acknowledged his previous criticisms of the pace and goals of AI development, saying: Conference call in X He said he entered the industry reluctantly in July 2023.
“If I had the opportunity to focus on advanced artificial intelligence digital superintelligence, I would do so. But this does not seem realistic,” Musk said.
In September, Musk joined a group of nearly two dozen technology executives and advocates who met privately with U.S. senators to discuss potential bipartisan legislation regulating artificial intelligence.
But Musk’s claims about a strict adherence to OpenAI’s nonprofit status by pursuing a nonprofit AI initiative raise questions about the credibility of Musk’s claims, Barrett said.
“Given that Elon Musk actually has his own for-profit AI company that is a competitor to OpenAI, it’s a little hard to take his case seriously,” Barrett added.
Unlike a typical company, xAI is classified as a for-profit benefit company, signaling a focus on social impact rather than shareholder value.
Ann Lipton, a professor of corporate law at Tulane University, called the case “sour grapes” in her post about X.
Lipton said the lawsuit amounts primarily to “an allegation that Altman did not manage various assets as Musk preferred.”
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“There are many reasons why employment law does not allow this type of litigation,” Lipton added.
In the lawsuit, Musk alleges breach of contract, breach of fiduciary duty and unfair business practices.
Musk is seeking a regulatory order requiring OpenAI to comply with its purported founding mission to help humanity and maintain its nonprofit form, and to be compensated for funds OpenAI received while engaging in allegedly unfair business practices.
Hoffman said Musk’s significant resources in some of the cases he brought pose a threat to rivals who don’t have the financial resources to compete in a costly legal battle. But Hoffman added that OpenAI’s deep pockets would dispel that notion as a factor in the outcome of the case.
Hoffman said “$20 million or $30 million in legal fees is inconsequential” to both parties.
ABC News’ Victor Ordonez contributed reporting.
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