In July, Elon Musk had a lawsuit against OpenAI, accusing the company of straying from its original goal of operating as a non-profit organization focused on developing artificial intelligence (AI) for the good of humanity. He withdrew the lawsuit at that time but then revived it in August with some updates. This new version of the lawsuit names not just OpenAI but also new targets, including big names like Microsoft, Reid Hoffman (who co-founded LinkedIn), and Dee Templeton (who is a former board member of OpenAI and currently works as a vice president at Microsoft).
Additionally, the updated complaint introduces new plaintiffs—people who are bringing the lawsuit—such as Shivon Zilis, who is an executive at Neuralink (another company founded by Musk) and was once on OpenAI’s board. Zilis is accompanied by a Musk-owned AI company named xAI.
Musk was one of the initial founders of OpenAI, created to ensure that AI technology would be developed responsibly for overall human benefit. However, he stepped away from the organization in 2018 because he had disagreements about its direction.
In this lawsuit, Musk’s lawyers are arguing that OpenAI is now trying to eliminate competition, specifically targeting Musk’s own company, xAI. They allege that OpenAI has been pressuring its investors not to provide funding to competitors. OpenAI is also accused of unfairly benefiting from the powerful resources and expertise of Microsoft, which Musk’s legal team describes as a “de facto merger” between the two companies.
One key complaint noted in the lawsuit reveals that xAI has faced challenges because it can’t get the same level of computing resources from Microsoft as OpenAI does. Musk’s team argues that there is a “competitively sensitive information” pipeline going on exclusively between Microsoft and OpenAI, which harms xAI.
The lawsuit suggests that Hoffman, who held positions on both Microsoft and OpenAI’s boards and is also a partner at an investment firm called Greylock, had an unfair advantage. This means he could access sensitive information related to both companies. The lawsuit claims that Hoffman’s involvement could be considered improper due to conflicts of interest, as Greylock also invested in a competitor to OpenAI called Inflection.
Involving Templeton, whose own position at OpenAI was temporary, the lawsuit alleges that she was in a role to help facilitate agreements between Microsoft and OpenAI that might break antitrust laws, which are rules designed to promote fair competition.
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Also named in the complaint is California attorney general Rob Bonta, as he is reported to be in discussions with OpenAI regarding changes to its corporate structure.
Zilis, who stepped down from the OpenAI board earlier this year, is also part of the lawsuit. Her connection to the case is that she has been vocal about her concerns with OpenAI’s actions but felt ignored. These concerns align closely with Musk’s arguments about the organization’s change in values and practices.
Interestingly, the updated lawsuit shares a detail where Musk is shown to have disagreed with an idea proposed by OpenAI’s CEO, Sam Altman, back in January 2018. Altman suggested OpenAI start selling its own cryptocurrency, a highly regulated and risky strategy for fundraising in the tech world. Musk rejected this idea, fearing it would negatively impact OpenAI’s credibility.
At its core, Musk and the other plaintiffs believe that OpenAI has strayed far from its original non-profit mission and is now operating more like a for-profit company that primarily serves Microsoft. They describe the situation as a betrayal of the ideals on which OpenAI was founded.
OpenAI has responded to the lawsuit, attempting to have it dismissed, arguing that Musk’s claims are unfounded and exaggerated.
