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© Michael Kovac / Vanity Fair / Getty Images
Elon Musk has sued OpenAI, its co-founders Sam Altman and Greg Brockman, and its affiliated entities, alleging the ChatGPT makers have breached their original contractual agreements by pursuing profits instead of the nonprofit's founding mission to develop AI that benefits humanity.

Musk, a co-founder and early backer of OpenAI, claims Altman and Brockman convinced him to help found and bankroll the startup in 2015 with promises it would be a nonprofit focused on countering the competitive threat from Google. The founding agreement required OpenAI to make its technology "freely available" to the public, the lawsuit alleges.

The lawsuit, filed in a court in San Francisco late Thursday, says that OpenAI, the world's most valuable AI startup, has shifted to a for-profit model focused on commercializing its AGI research after partnering with Microsoft, the world's most valuable company, which has invested about $13 billion into the startup.

"In reality, however, 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," the lawsuit adds. "This was a stark betrayal of the Founding Agreement."

The lawsuit follows Musk airing concerns about OpenAI's shift in priorities in the past year. According to the legal complaint, Musk donated over $44 million to the nonprofit between 2016 and September 2020. For the first several years, he was the largest contributor to OpenAI, the lawsuit adds. Musk, who left OpenAI's board in 2018, has been offered a stake in the for-profit arm of the startup but has refused to accept it over a principled stand, he said earlier.

X, the social network owned by Musk, last year launched Grok, a rival to ChatGPT.

Altman has also addressed some of Musk's concerns in the past, including the close ties with Microsoft. "I like the dude. I think he's totally wrong about this stuff," he said of Musk's criticisms at a conference last year. "He can sort of say whatever he wants but I'm like proud of what we're doing and I think we're going to make a positive contribution to the world and I try to stay above all that."

OpenAI's launch of ChatGPT in late 2022 sparked an AI arms race, with rivals still scrambling to match its uncannily human-like responses. Microsoft CEO Satya Nadella landed a gloved jab at the rest of the industry last month. "We have the best model today ... even with all the hoopla, one year after, GPT4 is better," he said. "We are waiting for the competition to arrive. It will arrive, I'm sure, but the fact [is] that we have the ... leading LLM out there."

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© TechCrunch/screenshotAn email exchange between Musk and Altman, presented as evidence in the lawsuit.
The Thursday lawsuit alleges close alignment between Microsoft and OpenAI, citing a recent interview with Nadella. Amid a dramatic leadership shake-up at OpenAI late last year, Nadella stated that if "OpenAI disappeared tomorrow ... we have all the IP rights and all the capability. We have the people, we have the compute, we have the data, we have everything. We are below them, above them, around them." The lawsuit presents this as evidence that OpenAI has strongly served Microsoft's interests.

The lawsuit also centers around OpenAI's GPT-4, which Musk claims constitutes AGI — an AI whose intelligence is at par, if not higher, than humans. He alleges OpenAI and Microsoft have improperly licensed GPT-4 despite agreeing that OpenAI's AGI capabilities would remain dedicated to humanity.

Through the lawsuit, Musk is seeking to compel OpenAI to adhere to its original mission and bar them from monetizing technologies developed under its nonprofit for the benefit of OpenAI executives or partners like Microsoft.

The suit also requests the court rule that AI systems like GPT-4 and other advanced models in development constitute artificial general intelligence that reaches beyond licensing agreements. In addition to injunctions forcing OpenAI's hand, Musk asks for accounting and potential restitution of donations meant to fund its public-minded research should the court find it now operates for private gain.

"Mr. Altman hand-picked a new Board that lacks similar technical expertise or any substantial background in AI governance, which the previous board had by design. Mr. D'Angelo, a tech CEO and entrepreneur, was the only member of the previous board to remain after Mr. Altman's return. The new Board consisted of members with more experience in profit-centric enterprises or politics than in AI ethics and governance," the lawsuit adds.