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Elon Musk sues OpenAI and Sam Altman for violating company principles

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OpenAI, the influential artificial intelligence company that ousted and then reinstated its high-profile CEO three months ago, faces new drama: a trial by Elon Musk, one of the richest men in the world and one co-founder of the AI ​​laboratory.

Mr. Musk sued OpenAI and its chief executive, Sam Altman, accusing them of breaching a contract by putting profits and commercial interests in the development of artificial intelligence ahead of the public good. A multibillion-dollar partnership that OpenAI developed with Microsoft, Mr. Musk said, represents an abandonment of a founding commitment to carefully develop AI and make the technology publicly available.

“OpenAI has been transformed into a de facto closed-source subsidiary of the largest technology company, Microsoft,” says the lawsuit filed Thursday in San Francisco Superior Court.

The 35-page lawsuit is the latest chapter in a fight between the former business partners that has been brewing for years, and it focuses on unresolved questions in the AI ​​community: Will artificial intelligence improve will it destroy the world and should it be tightly controlled or liberated?

Mr. Musk, the chief executive of Tesla, and Mr. Altman, like anyone else in the world, have helped frame this debate. Mr. Musk helped create OpenAI in 2015 in response to AI work being done at the time by Google. Mr. Musk believed that Google and its co-founder, Larry Page, were dismissive of the risks that AI posed to humanity.

Mr. Musk left OpenAI’s board during a power struggle in 2018. The company became a leader in generative AI and created ChatGPT, a chatbot capable of producing text and respond to queries in human prose. Mr. Musk, who founded his own AI company called xAI last year, said OpenAI was not focused enough on the risks of the technology.

The lawsuit also marks the latest twist for a company mired in controversy. In November, the OpenAI board of directors expelled Mr. Altman and said he no longer trusted him to run the company. It was reinstated five days later after an employee revolt threatened the company’s future.

Silicon Valley insiders believe that generative AI, the technology behind ChatGPT, is a once-in-a-generation technology that could transform the tech industry as profoundly as web browsers did more than 30 years ago.

“California courts must decide what OpenAI should do after straying from its original mission,” said Gary Marcus, an AI entrepreneur and professor emeritus of psychology and neural sciences at New York University. “The court of public opinion must decide what it thinks of Musk, who is right about OpenAI but has his own interests and business choices when it comes to AI.”

OpenAI declined to comment on the lawsuit. In a message sent to OpenAI employees Friday afternoon and seen by The New York Times, Mr. Altman said he was confused by Mr. Musk’s argument that developing AI for the benefit of humanity was at odds with starting a business.

Jason Kwon, OpenAI’s chief strategy officer, told OpenAI employees in another message seen by The Times that company executives “categorically disagree” with the lawsuit. Mr. Musk’s claims “do not reflect the reality of our work or mission,” he wrote.

The lawsuit adds to a series of mounting problems for OpenAI. The company’s dealings with Microsoft are also under scrutiny from regulators in the United States, European Union and Britain. He was sued by the New York Times, several digital points of sale, writers And computer programmers for scraping copyrighted material to train its chatbot. And the The Securities and Exchange Commission is investigating Mr. Altman and OpenAI.

Mr. Musk’s lawsuit says he became involved with OpenAI because it was created as a nonprofit to develop artificial intelligence for the “benefit of humanity.” A key part of this, according to the lawsuit, was making its technology open source, meaning it would share the underlying software code with the world. Instead, the company created a for-profit business unit and restricted access to its technology.

The lawsuit, which requests a jury trial, accuses OpenAI and Mr. Altman of breach of contract and breach of fiduciary duty, as well as unfair trade practices. Mr. Musk is asking that OpenAI be forced to open its technology to others and that Mr. Altman and others reimburse Mr. Musk for the money Mr. Musk gave to the organization. Greg Brockman, president of OpenAI, is also named as a defendant.

Mr. Musk’s argument relies on the close partnership between OpenAI and Microsoft. In 2019, Mr. Altman negotiated a deal in which Microsoft agreed to invest $1 billion in OpenAI. The startup said it would use Microsoft’s cloud computing services exclusively to create and deploy its AI. Microsoft has since invested an additional $12 billion in the startup and is the only company outside of OpenAI that has a license to use AI. raw technology behind GPT-4, the company’s most powerful AI technology.

Other companies like Google, Meta, and French startup Mistral freely share some of their latest technologies with other companies and researchers.

The lawsuit could expose OpenAI to a lengthy and invasive legal review that would reveal more about Mr. Altman’s firing and OpenAI’s transition from a nonprofit to a for-profit company. This change, which was masterminded by Mr. Altman in late 2018 and early 2019, was the source of backbiting at OpenAI for years and contributed to the board’s decision to fire him as chief executive .

Although Mr. Musk has repeatedly criticized OpenAI for becoming a for-profit company, he hatched a plan in 2017 to wrest control of the AI ​​lab from Mr. Altman and his other founders and turn it into a business operation that would operate alongside its other founders. companies, including the electric car manufacturer Tesla, and use their increasingly powerful supercomputers, people familiar with his plan said. When his takeover attempt failed, he left OpenAI’s board, the sources said.

Speaking at the New York Times DealBook Summit last year, Mr. Musk said he wanted to know more about the chaos that occurred at OpenAI last year, including why Ilya Sutskever, a co-founder, joined other board members in firing Mr. Altman in November. He said he was concerned that OpenAI had discovered a dangerous element of AI, a question his legal team could investigate as part of the lawsuit.

“I have mixed feelings about Sam,” Mr. Musk said at the DealBook conference. Referencing a ring of power in “The Lord of the Rings,” he added: “The ring of power can corrupt, and he has the ring of power.” »

Mr. Musk did not respond to requests for comment.

The dispute between Mr. Musk and Mr. Altman has long been a subject of intrigue in Silicon Valley. The men met for the first time during a visit to SpaceXMr. Musk’s rocket company, and then bonded over their shared concerns about the threat AI could pose to humanity.

According to the lawsuit, OpenAI’s nonprofit status was a major source of friction, as tensions grew between company executives interested in trying to make money from new AI technologies and Mr. Musk, who wanted the company to remain a research laboratory.

“Either you do something on your own or you continue with OpenAI as a nonprofit,” Mr. Musk said at one point, according to the complaint. “I won’t fund OpenAI again until you make a firm commitment to stay, or I’m just an idiot essentially providing free funding to a startup. The discussions are over.

The lawsuit attempts to show Mr. Musk as an indispensable figure in the development of OpenAI. From 2016 to 2020, Mr. Musk contributed more than $44 million to OpenAI, according to the lawsuit. He also rented the company’s initial offices in San Francisco and paid monthly expenses. He was personally involved in recruiting Mr. Sutskever, a leading research scientist at Google, to become OpenAI’s chief scientist, according to the complaint.

“Without Mr. Musk’s involvement and substantial supporting efforts and resources,” the lawsuit states, “it is very likely that OpenAI Inc. would never have gotten off the ground.”

Brian Quinn, a law professor at Boston College, said Mr. Musk’s complaint convincingly demonstrated that OpenAI had abandoned its roots. But, he added, Mr. Musk probably does not have the ability to do so, because nonprofit law limits such challenges to those brought by an organization’s dues-paying members. nonprofit, its own directors, or regulators in the state of Delaware, where OpenAI is registered. .

“If he were on the board, I’d say, ‘Ooh, strong arguments.’ If this had been filed by the Delaware Secretary of State, I would say, ‘Ooh, they’re in trouble,'” Mr. Quinn said. “But he has no standing. He has no file.

David A. Fahrenthold reports contributed.

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