Musk Reignites OpenAI Legal Battle, Alleges Contract Breach, Fraud, Deceit

Elon Musk has rekindled his existential legal battle against OpenAI and its founders, launching an exhaustive new lawsuit that paints the dispute as “a textbook tale of altruism versus greed.”

Musk initially sued OpenAI and its co-founders in February, claiming the company broke its original promise to operate as a nonprofit in a breach of contract. The breach allegedly occurred due to OpenAI setting up a for-profit arm after it partnered with Microsoft.

OpenAI’s senior leaders laughed at the lawsuit as Musk being jealous they succeeded without him. They also published emails in which Musk suggested merging OpenAI into Tesla and that he supported their for-profit pivot.

Despite dropping the lawsuit in June, Musk has now come back swinging, filing a new lawsuit in a California District Court that’s double the length of the original.

In addition to the original claim of breach of contract, the 83-page complaint adds new assertions, including fraud, racketeering, false advertising and unfair competition.

Co-founders Sam Altman and Greg Brockman, the latter of which left the company this week to take a sabbatical, are alleged to have “assiduously manipulated” Musk into founding the startup by “promising that it would chart a safer, more open course than profit-driven tech giants.”

Related:Musk Drops OpenAI Lawsuit Days Before Dismissal Hearing

The lawsuit alleges the pair convinced Musk to establish a non-profit organization as a counterbalance to Google’s DeepMind, attracting top talent to develop open source artificial general intelligence (AGI). However, it was allegedly just “hot-air philanthropy, the hook for Altman’s long con."

“Altman, in concert with other defendants, intentionally courted and deceived Musk, preying on Musk’s humanitarian concern about the existential dangers posed by AI,” the lawsuit alleges.

“After Musk lent his name to the venture, invested significant time, tens of millions of dollars in seed capital, and recruited top Al scientists for OpenAI, Musk and the non-profit’s namesake objective were betrayed by Altman and his accomplices. The perfidy and deceit are of Shakespearean proportions.”

The lawsuit claims that Musk isn’t the only one wise to OpenAI’s alleged behavior. The complaint references that the company is under investigation by multiple federal agencies.

The Securities and Exchange Commission is looking into last year’s boardroom implosion to determine if shareholders were misled. The Federal Trade Commission is also investigating OpenAI over possible breaches of consumer protection law.

The complaint also references several OpenAI staff members coming forward to allege the company is supplanting safety in favor of profit. OpenAI’s former chief scientist and co-founder Ilya Sutskever recently left the company and founded his own AI research lab focusing on safety.

Related:OpenAI to Musk: You're Upset We Succeeded Without You

Musk’s lawsuit alleges OpenAI’s leaders have “unjustly enriched [themselves] to the tune of billions of dollars” while the Tesla CEO “has been conned along with the public.”

The complaint contends that Musk is owed “a duty to use his contributions for the declared charitable purposes for which they were sought” and that Altman, Brockman and co’s pivot towards for-profit makes them liable for constructive fraud as they allegedly misled Musk.

“Defendants misled Musk by providing him with information that was inaccurate and/or incomplete and/or by failing to disclose to Musk, Altman and Brockman’s true commercial intentions, which were known to them,” the complaint reads.

Musk is seeking damages for the alleged misconduct, including any income, gains and profits received by the defendants as a result of what he claims was wrongful use of his contributions to OpenAI.

Musk claims the alleged misconduct will cause him imminent and irreparable harm, and is seeking an injunction to stop the defendants from continuing their alleged wrongful actions.

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“Defendants’ wrongful conduct, acts and omissions have approximately caused and will continue to cause Musk substantial injury and damage, much of which cannot be reasonably or adequately measured or compensated in monetary damages.”

He has also asked the court to determine if models such as GPT-4 and the new GPT-4o constitute AGI and whether they are outside the scope of OpenAI’s license to Microsoft.

The lawsuit also seeks a judicial determination that OpenAI’s Microsoft license is “null and void” as it violates the startup’s agreement with Musk.

Marc Toberoff, a lawyer representing Musk, told the New York Times that the “previous suit lacked teeth” and the new filing is “a much more forceful lawsuit.”