by Elon Musk sued OpenAI and its CEO Sam Altman on Friday, accusing the maker of ChatGPT of subverting its mission of exploiting humanity for profit.
Some legal experts who spoke to ABC News, however, cast doubt on Musk’s case.
Musk, the CEO of Tesla and X, said on the company’s early stage financing that he reached an agreement with the company’s leaders, including Altman, regarding the company’s non-profit course, according to the lawsuit filed in San Francisco Superior Court and reviewed by ABC News.
Musk did not immediately respond to ABC News’ request for comment. Neither was Tesla, Altman or OpenAI.
Last year, Musk said, the company “ignited the Founding Agreement” when it released ChatGPT-4, the most powerful version of its popular chatbot, making the technology available for use by tech giant Microsoft under exclusive licensing agreement.
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“OpenAI, Inc. has been transformed into a de facto closed source subsidiary of the world’s largest technology company: Microsoft,” Musk said in the lawsuit.
The case, legal experts said, centers on Musk’s alleged founding agreement, which he said occurred at the firm’s inception.
Deals struck between a top investor and company leadership are typically set out in writing with concrete terms, experts said, leaving Musk in a difficult position trying to sue what they say appear to be verbal promises made. years ago without a formal contract. .
For his part, Musk says in the lawsuit that the agreement was memorialized in a legal filing when OpenAI was incorporated.
“There are unusual verbal promises at the beginning of a relationship that you would sue,” Dave Hoffman, a professor of corporate law at the University of Pennsylvania, told ABC News. “That just feels like it’s weak to begin with.”
Paul Barrett, a professor at New York University School of Law and deputy director of NYU’s Stern Center for Business and Human Rights, also expressed skepticism about Musk’s allegations related to OpenAI’s founding mission. The company likely ran into potential legal pitfalls when it added its for-profit operation in 2019, Barrett said.
“I assume at the time OpenAI hired competent lawyers who structured the transaction so that it would be legal,” Barrett told ABC News.
In the lawsuit, Musk alleges that Altman and OpenAI President Greg Brockman reiterated the established agreement in written messages over the years.
“[I] still enthusiastic about the non-profit structure!” Altman wrote to Musk in 2017, according to the lawsuit.
Musk, who helped bankroll OpenAI, launched a rival AI company called xAI last year, which is building a model that will compete with ChatGPT.
Acknowledging his previous criticism of the speed and ambitions of AI development, Musk said in a conference call on X in July 2023 he reluctantly entered the industry.
“If I could push AI digital super intelligence, I would. But it doesn’t seem realistic,” Musk said.
In September, Musk joined a group of nearly two dozen tech executives and advocates who met privately with US senators to discuss potential bipartisan legislation governing AI.
By pursuing a nonprofit AI venture, however, Musk raises questions about the credibility of his claims of a firm commitment to OpenAI’s nonprofit status, Barrett said.
“It’s a little hard to take Elon Musk’s lawsuit seriously since he has his own for-profit AI company that’s actually a competitor to OpenAI,” Barrett said.
Unlike a typical company, xAI is classified as a for-profit benefit corporation, indicating a focus on social impact rather than shareholder value.
Ann Lipton, a Tulane University professor who studies corporate law, described the law in a post on X as “sour grapes.”
The lawsuit is primarily an “argument that Altman did not manage the various entities as Musk would have preferred,” Lipton said.
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“There are all kinds of reasons why business law wouldn’t allow,” Lipton said, “this kind of suit.”
In the lawsuit, Musk alleges breach of contract, breach of fiduciary duty and unfair business practices.
Musk is seeking a legal order requiring OpenAI to adhere to its alleged founding mission of helping humanity and maintain its non-profit form, as well as compensation for the funds OpenAI received while it allegedly engaged in unfair business practices.
In some cases initiated by Musk, his considerable resources threaten conflicts that may lack the finances to compete in a high-priced legal fight, Hoffman said. But OpenAI’s deep pockets, Hoffman added, will eliminate that consideration as a factor in the case’s outcome.
For both sides, Hoffman said, “a $20 million or $30 million legal fee is trivial.”
ABC News’ Victor Ordonez contributed reporting.
Elon Musk suing OpenAI. Some legal experts cast doubt on the situation. appeared first on abcnews.go.com
