AI

Elon Musk sues OpenAI again

Elon Musk has filed a new lawsuit against OpenAI and its CEO Sam Altman.

Eulerpool News Aug 6, 2024, 11:23 AM

Elon Musk filed a new lawsuit against OpenAI and its CEO Sam Altman on Monday. The lawsuit was filed in a federal court in California, approximately two months after Musk withdrew a similar lawsuit in state court. In the new lawsuit, Musk raises additional allegations against Altman and co-founder Greg Brockman, including accusations of violating the federal Racketeer Influenced and Corrupt Organizations Act (RICO).

According to the lawsuit, Altman, in collaboration with other defendants, deliberately misled Musk and other investors by claiming that OpenAI was dedicated to a "humanitarian mission". The lawsuit alleges that Altman and Brockman induced Musk to co-found OpenAI by promising to create a safer and more open alternative to profit-driven technology companies. However, once OpenAI's technology was on the verge of achieving transformative artificial intelligence (AGI), Altman changed the narrative and started to pursue financial gain through a partnership with Microsoft.

OpenAI closed an investment deal with Microsoft in January 2023, amounting to 10 billion USD, which secured the tech giant a share in OpenAI's profits and allowed it to integrate OpenAI's technology into its cloud and search services. Since 2019, Microsoft has invested around 13 billion USD in OpenAI, giving the company an edge in the race for powerful AI systems.

The complex investment structure of Microsoft in OpenAI has now triggered antitrust investigations by US and EU authorities. Musk is now urging the court to decide whether the latest models from OpenAI have achieved AGI. This milestone would render the licensing agreement with Microsoft "null and void," as Microsoft's investment only entails shares in OpenAI's "pre-AGI" profits. Musk claims that OpenAI has a financial interest in delaying public acknowledgment of achieving AGI.

Furthermore, Musk demands damages based on an "accounting of all gains, profits, and benefits" that OpenAI has achieved through his contributions.

The renewed legal dispute marks the latest turning point in the ongoing conflict between Musk and Altman, two prominent figures from Silicon Valley who are vying for AI dominance. This conflict began when Musk left the board of OpenAI in 2018 due to disagreements over the research direction. A year later, OpenAI's for-profit division was established.

Last year, Musk founded his own for-profit AI start-up, xAI. Last month, he announced that he intends to seek approval from Tesla's board so that the automaker he leads can invest $5 billion into the company. xAI was valued at $18 billion in a financing round in May. OpenAI was valued at $86 billion in an employee stock option offering in February. Musk claims in the lawsuit that the company was recently valued at $100 billion.

OpenAI declined to comment on the new lawsuit. The company had called Musk's earlier lawsuit "incoherent and frivolous" and published several emails from Musk during the company's early days in a blog post, which seemed to indicate that Musk knew the company needed to raise large sums of money to fund the computer resources required for developing AI models. Musk's lawyer, Marc Toberoff, told the New York Times that the "previous lawsuit had no teeth." "This is a much more powerful lawsuit," he added.

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