xAI Corp owner Elon Musk sues OpenAI for straying from non-profit roots

Elon Musk has filed a lawsuit against OpenAI, its co-founders Sam Altman and Greg Brockman, and other related entities.

According to the Feb. 29 court filing, Musk alleged that the defendants were in breach of their founding agreement, which stipulated that the company would develop artificial general intelligence (AGI) for the benefit of humanity, not profit.

Musk co-founded OpenAI in 2015 and played a significant role in the firm’s growth by contributing most of its early funding, advising on research directions, and helping recruit leading scientists and engineers. However, he left the company in 2018 and has since established his own AI corporation, x.AI Corp.

OpenAI’s relationship with Microsoft

Microsoft’s extensive relationship with OpenAI was one of the major complaints of the lawsuit.

According to Musk, OpenAI now operates as a de facto subsidiary of Microsoft, developing its AI tools for the benefit of the technology company.

The filing stated:

“OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft. Under its new board, it is not just developing but is actually refining an AGI to maximize profits for Microsoft, rather than for the benefit of humanity.”

Musk also mentioned Microsoft’s CEO Satya Naddella’s statement asserting full ownership of OpenAI resources during a board crisis in November 2023 as further evidence of his claims.

Last year, Altman faced temporary removal from the company due to concerns by some board members about the risks associated with artificial intelligence.

Following a period of uncertainty and Microsoft’s intervention, Altman was reinstated.

The lawsuit stated that while the specifics behind Altman’s initial dismissal remain shrouded in secrecy, it has become abundantly clear that OpenAI has shifted from its non-profit mission in favor of pursuing profit.

What does Musk want?

Musk wants OpenAI to revert to its original mission as an open-source, non-profit organization dedicated to advancing AGI for the greater good.

Additionally, he wants to prevent the company from leveraging its intellectual property (IP) for Microsoft’s advantage and to recognize GPT-4 as an AGI.

Musk argued that if his requests were denied, OpenAI’s actions would significantly impact Silicon Valley, potentially ushering in a new era for tech startups. He said:

“Rather than start out as a for-profit entity from the outset, “smart” investors would establish non-profits, use pre-tax donations to fund research and development, and then once their technology had been developed and proven, would slide the resulting IP assets into a new for profit venture to enrich themselves and their profit-maximizing corporate partners.”

Editor’s Note: Musk’s x.AI Corp is a privately owned for-profit organization that is currently developing a closed-sourced AI model referred to as Grok. Shareholders are undisclosed, with two publicly known executives, Elon Musk and Jared Birchall having raised $134 million.