Elon Musk sues OpenAI, wants it to go nonprofit again

Elon Musk has taken legal action against OpenAI, claiming that the organization violated its agreement and advocating for its return to an open-source, nonprofit structure.

Initially established as a nonprofit in 2015 and backed by Musk as a key investor, OpenAI shifted to a for-profit model in 2019. Following the launch of the widely popular ChatGPT AI chatbot in 2023, it secured a substantial $10 billion investment from Microsoft.

Musk, who had previously voiced concerns about OpenAI’s transition to a for-profit entity and its dissemination of potent AI technologies to the public, has now formalized his objections by filing a lawsuit in the San Francisco Superior Court on Thursday night.

In the lawsuit, Musk contends that OpenAI’s co-founders, Sam Altman and Greg Brockman, had initially agreed for OpenAI to function as a nonprofit, developing artificial general intelligence (AGI) as open-source software for the greater good of humanity.

Contrary to this agreement, the lawsuit alleges that OpenAI has evolved into a closed-source entity effectively under the umbrella of Microsoft, the world’s largest technology company.

Much of the lawsuit’s focus is on GPT-4, OpenAI’s advanced language model, which is claimed to excel in reasoning beyond the capabilities of an average human. However, instead of being available as open-source, GPT-4 is now maintained as closed-source software primarily catering to Microsoft’s proprietary commercial interests.

The legal action also raises concerns about the restructuring of OpenAI’s board following Altman’s dismissal and subsequent re-hiring, leading to the resignation of most board members, and the appointment of a new board reportedly favored by Altman and Microsoft.

“The new Board members lack substantial AI expertise and, based on information and belief, are intentionally unequipped to independently judge if and when OpenAI achieves AGI — thereby determining when it has developed an algorithm beyond the scope of Microsoft’s license,” states the lawsuit.

Musk is seeking a court order to compel OpenAI to revert to its original nonprofit, open-source model and to prevent Altman, Brockman, or others from leveraging OpenAI’s assets for profit, including Microsoft. The lawsuit also seeks a ruling on whether “GPT-4 constitutes Artificial General Intelligence and is therefore beyond the scope of OpenAI’s agreement with Microsoft.”

Mashable has reached out to OpenAI for comment but has not received a response as of yet.

Stan Schroeder

Senior Editor

Stan is a Senior Editor at Mashable, where he has worked since 2007. He’s got more battery-powered gadgets and band t-shirts than you. He writes about the next groundbreaking thing. Typically, this is a phone, a coin, or a car. His ultimate goal is to know something about everything.