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xAI Corp owner Elon Musk sues OpenAI for straying from its nonprofit roots

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Elon Musk filed a lawsuit against OpenAI, its co-founders Sam Altman and Greg Brockman, and other related entities.

According to the Feb. 29 court filing, Musk alleged that the defendants violated their founding agreement, which stated that the company would develop artificial general intelligence (AGI) for the benefit of humanity and not for profit.

Musk co-founded OpenAI in 2015 and played an important role in the company’s growth by contributing the bulk of its initial funding, advising on research directions, and helping recruit top scientists and engineers . However, he left the company in 2018 and has since started his own AI company, x.AI Corp.

OpenAI’s relationship with Microsoft

Microsoft’s extensive relationship with OpenAI was one of the main complaints in the lawsuit.

According to Musk, OpenAI now operates as a de facto subsidiary of Microsoft, developing its AI tools for the benefit of the tech company.

The file stated:

“OpenAI, Inc. has been transformed into a de facto closed-source subsidiary of the largest technology company in the world: Microsoft. Under its new board, the company is not just developing but actually refining an AGI in order to maximize Microsoft’s profits, rather than for the benefit of humanity.

Musk also pointed to Microsoft CEO Satya Naddella’s statement asserting full ownership of OpenAI resources during a November 2023 boardroom crisis as further evidence of his claims.

Last year, Altman was temporarily removed from the company due to concerns from some board members about the risks associated with artificial intelligence.

After a period of uncertainty and intervention from Microsoft, Altman was reinstated.

The lawsuit says that while the details of Altman’s initial firing remain shrouded in secrecy, it has become abundantly clear that OpenAI abandoned its nonprofit mission in favor of the pursuit of profit.

What does Musk want?

Musk wants OpenAI to return to its original mission as a nonprofit open source organization dedicated to advancing AGI for the common good.

Additionally, he wants to prevent the company from exploiting its intellectual property (IP) for Microsoft’s benefit and recognize GPT-4 as an AGI.

Musk argued that if his demands were denied, OpenAI’s actions would have a significant impact on Silicon Valley, potentially ushering in a new era for tech startups. He said:

“Rather than starting out as a for-profit entity from the start, “smart” investors would create nonprofit organizations, use pre-tax donations to fund research and development, and then once their technology is developed and proven , would drag the project. the resulting intellectual property assets into a new for-profit venture to enrich themselves and their profit-maximizing business partners.

Editor’s Note: Musk’s x.AI Corp is a private, for-profit organization currently developing a closed-source AI model called Grok. Shareholders are not disclosed, with two high-profile executives, Elon Musk and Jared Birchall, raising $134 million.

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