On Friday, OpenAI responded strongly to Elon Musk, the billionaire entrepreneur, by sharing a collection of emails and text messages. These communications, according to OpenAI, demonstrate that Musk’s lawsuit against the company is not accurate and misrepresents the situation.
Musk has been in a legal dispute with OpenAI for several months. At the heart of his lawsuit is the claim that OpenAI has strayed from its original mission of being a nonprofit organization dedicated to making the benefits of its artificial intelligence (AI) research accessible to everyone. The conflict intensified last month when Musk’s legal team requested a court order to stop OpenAI from continuing its shift from a nonprofit to a for-profit company.
In response, OpenAI argues that Musk’s complaints are unfounded and stem from his disappointment over not getting his way. The emails and texts released by OpenAI reveal that Musk had suggested the idea of OpenAI having both nonprofit and for-profit aspects as early as 2015. Although OpenAI initially started as a nonprofit, it later encountered financial difficulties that prompted it to consider a for-profit model.
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For instance, on June 13, 2017, Musk proposed that OpenAI merge with a hardware company, potentially Cerebras, which specializes in chip technology. Some leaders at OpenAI were supportive of this idea, leading to a plan for a new type of organization that would combine AI research with hardware in a for-profit setting. However, Musk demanded a controlling stake in the company—between 50% and 60%—and insisted on a company structure where he would have significant control and be appointed as CEO.
Musk even went as far as to create a separate company called “Open Artificial Intelligence Technologies, Inc.” in Delaware, but OpenAI’s leadership rejected his demands. He then suggested that OpenAI be absorbed into Tesla, his electric vehicle company, with a substantial budget of $1 billion, but that idea was also turned down.
After these failed attempts to influence OpenAI, Musk resigned from the organization in 2018 and distanced himself from its executive team. OpenAI claims that it has offered Musk a share in its for-profit branch multiple times, but he has consistently declined these offers.
In a public statement, OpenAI commented, “You can’t sue your way to artificial general intelligence,” referring to the ultimate goal of creating highly advanced AI. They acknowledged Musk’s past contributions and achievements but encouraged him to compete in the business world instead of the courtroom.
In response to the situation, Musk launched his own AI company called xAI last year. Shortly after its creation, xAI introduced Grok, an AI model that is now integrated into various features of Musk’s social media platform, X (formerly Twitter). xAI also provides an API, allowing other businesses to incorporate Grok into their applications and services.
Musk’s legal team recently filed a complaint claiming that OpenAI is preventing xAI from attracting investment by getting promises from investors not to support Musk’s new venture or any of its competitors. A report from the Financial Times indicated that OpenAI had asked investors in its latest funding round to refrain from investing in rival companies, including xAI.
Despite these allegations, xAI has been successful in raising funds. Last month, it secured $6 billion from various investors, including well-known firms like Andreessen Horowitz and Fidelity. With around $12 billion in funding, xAI is now one of the most financially robust AI companies globally.
Musk’s legal motion also claims that OpenAI and Microsoft, which has invested in and collaborates closely with OpenAI, are illegally sharing confidential information and resources. Additionally, Google has reportedly called for investigations into the relationship between Microsoft and OpenAI, particularly regarding their cloud computing partnerships.
OpenAI is under pressure to complete its transition to a for-profit model quickly. According to Bloomberg, if OpenAI does not convert from a nonprofit to a for-profit within two years, investors from its recent funding round will have the option to withdraw their investments.
