Elon Musk sues OpenAI and CEO Sam Altman for breach of contract

Musk co-founded OpenAI in 2015, but stepped down from the company's board in 2018.

Elon Musk has sued ChatGPT-maker OpenAI and its CEO Sam Altman, saying they abandoned the startup's original mission to develop artificial intelligence for the benefit of humanity and not for profit.

The lawsuit filed late on Thursday in San Francisco puts the billionaire at loggerheads with the startup that he co-founded and is now the face of generative AI, partly due to the billions of dollars in funding from Microsoft.

Musk alleged a breach of contract, saying Altman and co-founder Greg Brockman originally approached him to make an open source, non-profit company, but the startup established in 2015 is now focused on making money.

He sought a court ruling asking OpenAI to make its research and technology available to the public and prevent the startup from using its assets, including its most advanced AI model GPT-4, for the financial gains of Microsoft or any individual.

OpenAI, Microsoft and Musk did not immediately respond to Reuters requests for comment.

Musk, who runs Tesla and rocket maker SpaceX and bought Twitter for $44 billion in October 2022, has on several occasions called for regulation on AI.

He stepped down from OpenAI's board in 2018 and has often criticized Microsoft's ties with the startup.

"Microsoft has a very strong say, if not directly controls, OpenAI at this point," Musk had said in an interview with Tucker Carlson in April last year.

The tie-up is under antitrust scrutiny in the United States and Britain following the startup's boardroom battle last year that resulted in the sudden ouster and return of Altman and the creation of a new temporary board.

OpenAI is planning to appoint several new board members in March, the Washington Post reported on Thursday. Microsoft said in November it would have a non-voting, observer seat on the board.

Some legal experts said failing to secure Musk's consent as per the agreement could count against OpenAI, but it would be difficult to predict the outcome of the lawsuit.

"[It] is a complex one with uncertain potential outcomes," said Anupam Shukla, partner at Pioneer Legal, adding that it was unlikely OpenAI's structure would be "held invalid to the extent of it having to be fully unwound".

MUSK's xAI

Musk has mounted a rival AI effort with his startup xAI, which is made up of engineers hired from some of the top U.S. technology firms such as Google and Microsoft that he hopes to challenge.

The startup started rolling out its ChatGPT competitor Grok for Premium+ subscribers of social media platform X in December and aims to create what Musk has said would be a "maximum truth-seeking AI".

The billionaire, who has called AI a "double-edged sword", was among a group of AI experts and industry executives that last year called for a six-month pause in developing systems more powerful than OpenAI's GPT-4, citing great risks to humanity and society.

Since its debut, ChatGPT has been adopted by companies for a wide range of tasks from summarizing documents to writing computer code, setting off a race among Big Tech companies to launch their own offerings based on generative AI.