Elon Musk Sues OpenAI for Not Being Open, Says He Wants His $44 Million Back

Elon Musk has never shied away from critiquing OpenAI, the company behind ChatGPT that he cofounded back in 2015. He doesn’t like the fact that the company decided it wants to make money after it was founded as a nonprofit. Now, Musk is doing something about it: He’s asking a court to force OpenAI to carry out its nonprofit mission. Oh, and he wants his $44 million in donations back.

Musk sued OpenAI and its CEO Sam Altman in a San Francisco court on Thursday, accusing Altman of betraying OpenAI’s mission to develop AI for the public good and make its research freely available to the public. Instead of following that mission, Musk argues that the company focused on enriching Altman and Microsoft, which has invested $13 billion in OpenAI’s for-profit arm. As a result, the lawsuit claims, OpenAI has refused to share information on GPT-4, the most powerful LLM released by the company to date.

“To this day, OpenAI, Inc.’s website continues to profess that its charter is to ensure that AGI [Artificial General Intelligence] ‘benefits all of humanity.’ In reality, however, OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft,” Musk’s lawyers write. “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 itself isn’t a surprise. Musk has not hidden his disappointment in OpenAI over the years and has publicly wondered whether starting a company as a nonprofit and then using the IP to generate revenue is legal. In February 2023, Musk pointed out that OpenAI in its current form was “[n]ot what I intended at all.”

Elon Musk’s Role in Creating OpenAI

Musk’s lawyers take care to highlight Musk’s role in creating and financing OpenAI. According to the lawsuit, Altman approached Musk in 2015 about creating an AI lab to compete with Google’s DeepMind, which was leading the AI race at that time. Along with OpenAI president Greg Brockman, Musk and Altman launched the nonprofit “OpenAI.”

The name was chosen by Musk, who gave the nonprofit $15 million in 2016 and paid for its initial office space in San Francisco. He also played a key role in recruiting OpenAI’s former chief scientist, Ilya Sutskever, away from Google. In total, Musk has given OpenAI more than $44 million throughout the years.

The possibility of transforming OpenAI from a nonprofit foundation to a for-profit company was reportedly cast aside in 2017. According to the lawsuit, Brockman and others went to Musk with the idea, which he shot down.

“[E]ither go do something on your own or continue with OpenAI as a nonprofit,” Musk said at that time. “I will no longer fund OpenAI until you have made a firm commitment to stay or I’m just being a fool who is essentially providing free funding to a startup. Discussions are over.”

Altman reportedly agreed with Musk in his response, stating that he “remains enthusiastic about the non-profit structure!” Musk stepped down as co-chair in 2018 and slowed his donations, though he continued to be involved in the project. OpenAI would proceed to create a for-profit arm in 2019.

Musk Asks Court to Force OpenAI to Return to Its Nonprofit Roots

Musk is suing OpenAI and Altman for breach of contract and breach of fiduciary duty. The billionaire claims that OpenAI violated the agreement it made with him, which states that the company would be a nonprofit developing AI for the public good and that its research would be open source.

Musk also claims that Altman induced him to donate money to OpenAI by stating that it would be a nonprofit and operate according to a specific set of conditions. However, Altman has not kept that promise, according to the lawsuit.

Musk is asking the court to force OpenAI to make its research and technology, including the engineering behind GPT-4, available to the public. The billionaire also wants the court to prohibit OpenAI from making a profit in the future in addition to the return of the $44 million he made in donations to OpenAI.

Gizmodo reached out to OpenAI and Microsoft for comment on Musk’s lawsuit but did not immediately hear back.

Deborah Gerhardt, a law professor at the University of North Carolina at Chapel Hill, told Gizmodo in an email that Musk’s complaint identifies some significant and potentially damaging claims, both with respect to OpenAI’s structure and its reputation. However, Gerhardt said it’s unclear whether Musk will be able to prove that his donations were contingent on specific conduct, such as not creating a related but separate for-profit company.

“It is also unclear exactly why he thinks his judgment is superior to those inside AI on issues such as which AI practices best fulfill the nonprofit’s mission of developing AI responsibly for the future,” she said. “Normally, those who donate money to nonprofits do not get to micromanage which company policies advance the nonprofit’s mission.”

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