The lawsuit aims to prevent Altman and Microsoft from profiting from the company. Nathan Howard/Getty, Tyler Le/BI
Years after leaving the startup, Elon is suing Musk Open AI and its CEO Sam Altman.
Despite Musk’s accusations, legal experts believe his case against Open AI is weak.
But Musk’s lawsuit could still hinder Open AI by tying the company up in court and damaging its image.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
It was last May. Elon Musk sat down for an interview with CNBC’s David Faber.
When asked about Altman and Open AI, Musk was visibly frustrated.
“Without me this wouldn’t exist,” said Musk.
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“It seems strange to me that something that is considered non-profit and open source can turn into for-profit, closed source,” he added. “This is the exact opposite of what I gave them the money for. Is that legal? It doesn’t seem legal.”
Musk’s response may have been the sign that the billionaire was ready to take Altman and Open AI to court.
Elon Musk could try to slow down the progress of Open AI
On Thursday, Elon Musk sued Open AI and its CEO. He claimed that the company’s partnership with Microsoft violated its mission because it prioritized profit over the development of open source technology that would benefit humanity.
The two had argued before. However, Altman was more diplomatic in his public answers when asked about Musk, even referring to the Tesla CEO as his hero.
But now Musk has thrown down the gauntlet, probably marking a point of no return for their relationship. His lawsuit seeks to force Open AI to open source its research and technology, cut Microsoft off from GPT-4, and prevent Altman and Microsoft from profiting from the company.
“It looks like he’s trying to slow them down so he can catch up with his own efforts,” Kyle Lawrence, a corporate and securities attorney at Falcon Rappaport & Berkman, told Business Insider. “This is how many of the big tech giants work. They succeed by throttling the ability of other institutions to move forward.”
After all, Musk is anything but an uninvolved party.
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Musk’s lawsuit comes after the billionaire founded his own AI company last year. Musk said he invested several million dollars in the company during Open AI’s founding, but stepped down from the company’s board in 2018.
At the time, Musk said he left the company to avoid a potential conflict of interest with Tesla and its AI efforts.
According to experts, Musk’s lawsuit has little chance of success
Despite Musk’s cocky demeanor, his case against Open AI appears shaky at best, according to David Hoffman. He is an expert in contract law from the University of Pennsylvania.
“It would be very difficult to make a breach of contract claim without a written contract,” Hoffman said.
Musk claims in his lawsuit that Open AI deviated from the “founding agreement.” But there appears to be no such written agreement. The lawsuit relies on unwritten contractual claims that will be difficult to sustain in court, Hoffman said.
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Instead, Musk cites an email from Altman (which appears to be more of a casual negotiation than a contract) and Open AI’s articles of incorporation. Musk did not sign this and it does not mention that the company is open source.
And since Open AI is a nonprofit organization, it will be difficult for the billionaire to claim that Open AI’s board has any fiduciary duties to him. Samuel Brunson, a nonprofit legal expert at Loyola University, told Business Insider.
The billionaire’s argument that Open AI has not acted for the “good of humanity” is more of a philosophical argument than a concrete legal one, said Kyle Lawrence, a corporate and securities attorney at Falcon Rappaport & Berkman.
“Who can say that what they do doesn’t benefit humanity?” Lawrence said. “They could easily say they need a billion dollars to do this. And who can say that the mechanism they have put in place to get this billion dollars conflicts with their goal of benefiting humanity?”
Open AI could still pay a hefty price
While experts say it’s unlikely that Musk will succeed in his lawsuit, Open AI could still pay a price.
“These types of lawsuits can expose secrets and be a major distraction that could impact day-to-day operations,” Hoffman said.
The publicity surrounding the lawsuit — whether Musk wins or loses — could also damage Open AI’s reputation and add fuel to the fire ignited by Altman’s short-term firing. As one of the richest men in the world, Musk could keep Open AI busy with litigation for years, according to Lawrence.
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The case could also set a dangerous standard – if Musk wins.
“If Musk wins this case, it would set a bad precedent for nonprofits around the world,” Brunson said. “You could see a bunch of unhappy donors trying to get their money back. And most nonprofits don’t have the same resources as Open AI.”
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