Elon Musk filed a lawsuit against OpenAI last week, citing breach of contract and fiduciary duty. Musk alleges that Microsoft is manipulating OpenAI’s vision. Additionally, Musk’s lawsuit exposes how OpenAI’s original mission of developing AGI for the benefit of humanity has been compromised by profit-driven objectives. In response, OpenAI has swiftly rebutted Musk’s claims by disclosing sensitive information to refute his allegations.
OpenAI published a blog post containing a collection of emails exchanged between the company and Elon Musk. These emails indicate that Musk either proposed a merger between OpenAI and Tesla or expressed interest in obtaining full control of the company. Specifically, the blog post stated:
In late 2017, Elon Musk and we mutually agreed that the next phase of our mission required the establishment of a for-profit entity. Musk sought majority equity, initial control of the board, and to assume the role of CEO. However, amidst these negotiations, he withheld funding. Reid Hoffman stepped in to bridge the financial gap, ensuring the continuation of salaries and operations.
Moreover, OpenAI stated that they were unable to reach an agreement with Musk because granting him complete control conflicted with the company’s mission and vision.
In the blog post, Elon Musk is quoted as saying that he urged OpenAI to aim for a “bigger number” than what CEO Sam Altman and co-founder Greg Brockman had initially envisioned. Originally, this figure was set at $100 million, but Musk insisted that OpenAI should declare a $1 billion funding commitment from the outset.
Nevertheless, the post clarifies from the outset that the company has only received less than $45 million from Musk, with over $90 million from “other donors.” This indicates that the $1 billion funding commitment was unsuccessful, resulting in minimal impact. Musk asserts that OpenAI’s evolution is concerning, shifting from an open-source platform to a “closed-source de facto subsidiary” of Microsoft, the world’s largest technology company.
OpenAI refutes this claim by sharing an email exchange between Ilya Sutskever (co-founder and former Chief Scientist at OpenAI) and Musk. In the email, Ilya explicitly stated:
As we approach the development of AI, it becomes increasingly logical to adopt a less transparent approach. While the “Open” in OpenAI signifies that everyone should reap the benefits of AI once it’s created, it’s acceptable to withhold certain scientific insights. However, sharing everything remains an optimal strategy in the short and possibly medium term for recruitment purposes.
In response to the revelation, OpenAI conveyed disappointment over the circumstances involving “someone whom we’ve deeply admired—someone who encouraged us to reach for greater heights, only to predict our failure, initiate a competing venture, and ultimately pursue legal action.” and then sued us when we began making meaningful progress towards OpenAI’s mission without him.”
OpenAI vs Elon Musk: Who’s in the Wrong?
The primary challenge with the entire lawsuit is the absence of a concrete contract to reference. The entire dispute relies solely on a few digital exchanges and verbal agreements between OpenAI and Elon Musk. While it certainly generates significant attention for both companies, there are limited legal grounds to explore due to the lack of substantial documentation.
Former U.S. Attorney Kevin O’Brien expressed to CNBC, “It’s certainly a good advertisement for the benefit of Elon Musk,” and conveyed uncertainty regarding the strength of the legal foundation underlying the entire situation.
There’s no clear “winner” in this scenario, as it appears to be driven by competitive rivalry. With Musk’s xAI wing launching its Grok AI bot to compete with ChatGPT, OpenAI’s flagship project, it remains uncertain if this lawsuit will provide Musk with the leverage he seeks.
Furthermore, with individuals like renowned AI expert Gary Marcus stepping forward to express concerns about OpenAI’s vision, it raises questions about the company’s integrity from the outset. This situation is just the beginning, and there may be more layers to uncover than initially apparent.
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