Musk’s Lawsuit Accuses Altman of Fraud, OpenAI Strikes Back: ‘He’s Motivated by Jealousy’

The co-operation of technological titans begins

The co-trial, which began with jury selection Monday in federal court in Oakland, is expected to last two to three weeks. In February 2024, Elon Musk filed a lawsuit against Altman, OpenAI president Greg Brockman, the company itself, and its main partner Microsoft, charging them with breach of contract and unjust enrichment. Opening statements from both sides are expected later this week, and the witness list includes key figures from the tech world, including Musk, Altman and Microsoft CEO Satya Nadella.

Musk is seeking a range of remedies, including the dismissal of Altman and Brockman, damages in excess of $134 billion, which he says would be diverted to the nonprofit arm of OpenAI, and the reversal of the company’s restructuring into a for-profit entity.

Accusations of betrayal and OpenAI’s response

Musk’s lawsuit alleges that Altman’s deal-making and company maneuvering violate OpenAI’s core mission as a non-profit organization created for the benefit of the public. The lawsuit claims that Altman and Brockman have unjustly enriched themselves through their control over the company, which, according to Musk, has transformed into a de facto subsidiary of Microsoft focused solely on profit.

OpenAI, on the other hand, strongly denied Musk’s lawsuit, stating that he agreed back in 2017 that the establishment of a profit branch was a necessary step for further development. The company claims that Musk is “motivated by jealousy” and “regret for leaving”. They also dispute that Musk’s funding was an investment, pointing out that it was a tax-deductible donation to a non-profit organization that does not entitle him to ownership in OpenAI.

The background of the conflict and the split of the co-founders

Altman, Musk and several other founders launched OpenAI in 2015 as a non-profit organization, with Musk initially securing around $38 million. The goal was to create a counterbalance to Google’s DeepMind and ensure that the development of general artificial intelligence takes place in a safe and transparent manner.

Relations soured around 2017, after Musk grew impatient with the company’s progress and tried unsuccessfully to take more control. He left OpenAI’s board of directors in 2018 and ceased further funding. After Musk’s departure, OpenAI formed a for-profit subsidiary in 2019 to raise capital, which led to the launch of the wildly successful ChatGPT and a multibillion-dollar investment from Microsoft, making the company one of the most valuable in the world.

High stakes for the future of artificial intelligence

The case carries huge stakes for OpenAI, which is expected to go public later this year with an estimated value of around a trillion dollars. The outcome of the trial could significantly affect not only the future of the company, but also and to the wider ecosystem of artificial intelligence, opening up questions about the balance between non-profit ideals and commercial pressures in the development of technologies that have the potential to transform society.

The whole situation is further complicated by the fact that Musk has in the meantime founded his own company for artificial intelligence, xAI, which developed the competing chatbot Grok, which raises questions about a possible conflict of interest.