Artificial intelligence Business Enterprise

Musk Sues Altman, OpenAI For Breach Of Founding Agreement

Illustration of a gavel surrounded by NFT.

Two of the biggest names in tech right now may be bound to face off in court.

Elon Musk has filed a lawsuit against OpenAI and its executives — including co-founder and CEO Sam Altman — for allegedly breaching the founding agreement of the company to develop artificial general intelligence for the benefit of humanity. 

The suit, filed in San Francisco Superior Court on Thursday, claims the company and its leaders have set that agreement “aflame” by letting the company be “transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft” and now working in secrecy and focusing on profit.

While OpenAI is a nonprofit, it does also have a capped-profit arm. OpenAI does indeed have a close relationship with Microsoft, which was an early investor in the company and in January 2023 agreed to a “multiyear, multibillion-dollar investment” into OpenAI, with several reports tabbing that as a $10 billion deal.

November’s drama

Musk’s suit particularly points the finger at the events at OpenAI last November when the company’s board dismissed Altman after losing “confidence” in him to lead the company and “not consistently (being) candid with the board.”

Over the course of several dramatic days, Altman was eventually brought back, along with a new board.

The lawsuit claims the “new board members were hand-picked by Mr. Altman and blessed by Microsoft. The new Board members lack substantial AI expertise and, on information and belief, are ill equipped by design to make an independent determination of whether and when OpenAI has attained” artificial general intelligence and when the company has developed an algorithm that is outside the scope of Microsoft’s license, the suit alleges.

Musk co-founded OpenAI in 2015 before stepping down as co-chair in 2018. 

OpenAI’s charter on its site states its mission is to ensure AI benefits all of humanity.

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Illustration: Dom Guzman


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