OpenAI's legal battle with Elon Musk reveals internal turmoil over avoiding AI 'dictatorship'

[December 14, 2024]  By MATT O'BRIEN

A 7-year-old rivalry between tech leaders Elon Musk and Sam Altman over who should run OpenAI and prevent an artificial intelligence "dictatorship" is now heading to a federal judge as Musk seeks to halt the ChatGPT maker's ongoing shift into a for-profit company.

Musk, an early OpenAI investor and board member, sued the artificial intelligence company earlier this year alleging it had betrayed its founding aims as a nonprofit research lab benefiting the public good rather than pursuing profits.

Musk has since escalated the dispute, adding new claims and asking for a court order that would stop OpenAI’s plans to convert itself into a for-profit business more fully.

The world's richest man, whose companies include Tesla, SpaceX and social media platform X, last year started his own rival AI company, xAI. Musk says it faces unfair competition from OpenAI and its close business partner Microsoft, which has supplied the huge computing resources needed to build AI systems such as ChatGPT.

“OpenAI and Microsoft together exploiting Musk’s donations so they can build a for-profit monopoly, one now specifically targeting xAI, is just too much,” says Musk's filing that alleges the companies are violating the terms of Musk’s foundational contributions to the charity.

OpenAI filed a response Friday opposing Musk’s requested order, saying it would “debilitate OpenAI’s business” and mission to the advantage of Musk and his own AI company and is based on “far-fetched” legal claims. A hearing is set for January before U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California.

At the heart of the dispute is a 2017 internal power struggle at the fledgling startup that led to Altman becoming OpenAI's CEO.

Musk also sought to be CEO and in an email outlined a plan where he would “unequivocally have initial control of the company” but said that would be temporary. He grew frustrated after two other OpenAI co-founders said he would hold too much power as a major shareholder and chief executive if the startup succeeded in its goal to achieve better-than-human AI known as artificial general intelligence, or AGI. Musk has long voiced concerns about how advanced forms of AI could threaten humanity.

“The current structure provides you with a path where you end up with unilateral absolute control over the AGI," said a 2017 email to Musk from co-founders Ilya Sutskever and Greg Brockman. “You stated that you don't want to control the final AGI, but during this negotiation, you've shown to us that absolute control is extremely important to you.”

The OpenAI logo is displayed on a cell phone in front of an image generated by ChatGPT's Dall-E text-to-image model, Dec. 8, 2023, in Boston. (AP Photo/Michael Dwyer, File)

In the same email, titled “Honest Thoughts,” Sutskever and Brockman also voiced concerns about Altman's desire to be CEO and whether he was motivated by “political goals.” Altman eventually succeeded in becoming CEO, and has remained so except for a period last year when he was fired and then reinstated days later after the board that ousted him was replaced.

OpenAI published the messages Friday in a blog post meant to show its side of the story, particularly Musk's early support for the idea of making OpenAI a for-profit business so it could raise money for the hardware and computer power that AI needs.

It was Musk, through his wealth manager Jared Birchall, who first registered “Open Artificial Intelligence Technologies, Inc.,” a public benefit corporation, in September 2017. Then came the “Honest Thoughts” email that Musk described as the “final straw.”

“Either go do something on your own or continue with OpenAI as a nonprofit,” Musk wrote back. OpenAI said Musk later proposed merging the startup into Tesla before resigning as the co-chair of OpenAI's board in early 2018.

Musk didn't respond to emailed requests for comment sent to his companies Friday.

Asked about his frayed relationship with Musk at a New York Times conference last week, Altman said he felt “tremendously sad” but also characterized Musk’s legal fight as one about business competition.

“He’s a competitor and we’re doing well,” Altman said. He also said at the conference that he is “not that worried” about the Tesla CEO’s influence with President-elect Donald Trump. OpenAI said Friday that Altman plans to make a $1 million personal donation to Trump’s inauguration fund, joining a number of tech companies and executives who are working to improve their relationships with the incoming administration.

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