Elon Musk sues OpenAI, Sam Altman for making a “fool” out of him

After withdrawing his lawsuit in June for unknown reasons, Elon Musk has revived a complaint accusing OpenAI and its CEO Sam Altman of fraudulently inducing Musk to contribute $44 million in seed funding by promising that OpenAI would always open-source its technology and prioritize serving the public good over profits as a permanent nonprofit.

Instead, Musk alleged that Altman and his co-conspirators—“preying on Musk’s humanitarian concern about the existential dangers posed by artificial intelligence”—always intended to “betray” these promises in pursuit of personal gains.

As OpenAI’s technology advanced toward artificial general intelligence (AGI) and strove to surpass human capabilities, “Altman set the bait and hooked Musk with sham altruism then flipped the script as the non-profit’s technology approached AGI and profits neared, mobilizing Defendants to turn OpenAI, Inc. into their personal piggy bank and OpenAI into a moneymaking bonanza, worth billions,” Musk’s complaint said.

Where Musk saw OpenAI as his chance to fund a meaningful rival to stop Google from controlling the most powerful AI, Altman and others “wished to launch a competitor to Google” and allegedly deceived Musk to do it. According to Musk:

The idea Altman sold Musk was that a non-profit, funded and backed by Musk, would attract world-class scientists, conduct leading AI research and development, and, as a meaningful counterweight to Google’s DeepMind in the race for Artificial General Intelligence (“AGI”), decentralize its technology by making it open source. 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. But as it turns out, this was all hot-air philanthropy—the hook for Altman’s long con.

Without Musk’s involvement and funding during OpenAI’s “first five critical years,” Musk’s complaint said, “it is fair to say” that “there would have been no OpenAI.” And when Altman and others repeatedly approached Musk with plans to shift OpenAI to a for-profit model, Musk held strong to his morals, conditioning his ongoing contributions on OpenAI remaining a nonprofit and its tech largely remaining open source.

“Either go do something on your own or continue with OpenAI as a nonprofit,” Musk told Altman in 2018 when Altman tried to “recast the nonprofit as a moneymaking endeavor to bring in shareholders, sell equity, and raise capital.”

“I will no longer fund OpenAI until you have made a firm commitment to stay, or I’m just being a fool who is essentially providing free funding to a startup,” Musk said at the time. “Discussions are over.”

But discussions weren’t over. And now Musk seemingly does feel like a fool after OpenAI exclusively licensed GPT-4 and all “pre-AGI” technology to Microsoft in 2023, while putting up paywalls and “failing to publicly disclose the non-profit’s research and development, including details on GPT-4, GPT-4T, and GPT-4o’s architecture, hardware, training method, and training computation.” This excluded the public “from open usage of GPT-4 and related technology to advance Defendants and Microsoft’s own commercial interests,” Musk alleged.

Now Musk has revived his suit against OpenAI, asking the court to award maximum damages for OpenAI’s alleged fraud, contract breaches, false advertising, acts viewed as unfair to competition, and other violations.

He has also asked the court to determine a very technical question: whether OpenAI’s most recent models should be considered AGI and therefore Microsoft’s license voided. That’s the only way to ensure that a private corporation isn’t controlling OpenAI’s AGI models, which Musk repeatedly conditioned his financial contributions upon preventing.

“Musk contributed considerable money and resources to launch and sustain OpenAI, Inc., which was done on the condition that the endeavor would be and remain a non-profit devoted to openly sharing its technology with the public and avoid concentrating its power in the hands of the few,” Musk’s complaint said. “Defendants knowingly and repeatedly accepted Musk’s contributions in order to develop AGI, with no intention of honoring those conditions once AGI was in reach. Case in point: GPT-4, GPT-4T, and GPT-4o are all closed source and shrouded in secrecy, while Defendants actively work to transform the non-profit into a thoroughly commercial business.”

Musk wants Microsoft’s GPT-4 license voided

Musk also asked the court to null and void OpenAI’s exclusive license to Microsoft, or else determine “whether GPT-4, GPT-4T, GPT-4o, and other OpenAI next generation large language models constitute AGI and are thus excluded from Microsoft’s license.”

It’s clear that Musk considers these models to be AGI, and he’s alleged that Altman’s current control of OpenAI’s Board—after firing dissidents in 2023 whom Musk claimed tried to get Altman ousted for prioritizing profits over AI safety—gives Altman the power to obscure when OpenAI’s models constitute AGI.

Where previously the board had the power to determine when models reach AGI, and thus end licensing to keep AGI in the hands of the public, “the new members were reportedly ‘big fans of Altman,’” Musk’s complaint said, and unlikely to disagree with his determinations of when AGI had been reached. As another red flag, Musk said, Microsoft “obtained an influential observer seat on the Board,” until outcry last month from US and European antitrust agencies pushed Microsoft to abandon the seat.

“Given Microsoft and the OpenAI profit machine’s enormous financial interest in keeping the technology closed to the public, OpenAI, Inc.’s newly captured, conflicted, and compliant Board will have every reason to delay ever making a finding that OpenAI, Inc. has attained AGI,” Musk’s complaint warned. “OpenAI’s for-profit apparatus may now operate fully unchecked.”

Musk feels deceived by OpenAI’s “all-too-cozy” relationship with Microsoft, which Musk alleged helped Altman establish “an opaque web of for-profit OpenAI affiliates,” engage in “rampant self-dealing,” seize OpenAI’s Board, and “systematically” drain the non-profit “of its valuable technology and personnel,” Musk’s complaint said.

According to Musk, “the resulting OpenAI network, in which Altman and Microsoft hold significant interests, was recently valued at a staggering $100 billion.”

These gains—among other alleged self-dealing, such as Altman profiting $69 million off Reddit stock after “inducing” OpenAI’s deal with Reddit—allegedly breached OpenAI’s promise that “no part of the net income or assets of this corporation shall ever inure to the benefit of any director, officer or member thereof or to the benefit of any private person,” his complaint said.

“Altman alone stands to make billions from the humble non-profit Musk co-founded,” Musk alleged, accusing the OpenAI CEO of “locking down the technology for personal gain” right when the company “reached the threshold of AGI.”

Arguably, that move realized Musk’s worst nightmare, giving a few individuals power to control AGI, which the complaint said posed many risks:

Musk has long been concerned by the grave threat these advanced systems pose to humanity, which he has repeatedly warned is likely the greatest existential threat we face today. These dangers include, without limitation (or exaggeration), completely replacing the human workforce, supercharging the spread of disinformation, malicious human impersonation, and the manipulation of political and military systems, ultimately leading to the extinction of humanity.

OpenAI started building this “web” of for-profit entities in 2019, Musk alleged, gradually adding more entities through 2023—and allegedly “more OpenAI entities are popping up every month as part of Defendants’ shell game.” While these for-profit entities are ostensibly used to raise profits for OpenAI’s nonprofit work, Musk claimed that Altman and Microsoft schemed to launch “a dense fleet of dozens of for-profit entities to facilitate veiled and unchecked profiteering.”

“The complex profiteering arm of OpenAI—in which, on information and belief, Microsoft and Altman are significant shareholders, and Musk is not—while publicly cloaked as a mere fundraising apparatus, is in reality, the foundation for Defendants’ scheme to control and cash in on OpenAI, Inc.’s technology,” Musk alleged.

To that end, Musk’s complaint said, OpenAI has shifted top staff from the nonprofit company to a for-profit company that “now houses much of OpenAI’s research and development.” This shift “conveniently shields” OpenAI “from the public oversight and financial disclosures non-profits like OpenAI, Inc. must make,” Musk alleged.