OpenAI hits back at Elon Musk lawsuit, says he suggested for-profit entity

OpenAI is pushing back against Elon Musk’s latest attempt to retool its lawsuit against the organization artificial intelligence (AI) the giant is trying to prevent the company from moving to a for-profit structure, saying in a blog post and legal filings that Musk had argued in favor of it years ago.

Musk, who co-founded OpenAI in 2015 with company CEO Sam Altman, Ilya Sutzkver, Greg Brockman and others, parted ways with the company in early 2018 after failing to secure control of the company as its majority shareholder and CEO, and later trying to convince its founders to merge it with Tesla, Musk founded xAI. OpenAI’s competitor, in March 2023.

In March 2024, Musk filed a lawsuit against OpenAI, alleging that it violated its founding mission as a non-profit company by creating a for-profit entity in a new blog post and legal filing described Musk’s previous agreement with the for-profit entity.

OpenAI noted that in an email with other co-founders. Elon Musk questioned whether there should be a nonprofit structure prior to the company’s announcement in November 2015 and wrote in the letter that “the structure does not seem optimal … It is probably better to have a standard C corporation with a parallel nonprofit.”

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OpenAI co-founder Elon Musk, who later quit the AI ​​startup, wanted control of the for-profit OpenAI organization before speaking out, OpenAI claims. (Frederick J. Brown/AFP via Getty Images/Getty Images)

In July 2017, Musk and Founders of OpenAI discussed the company’s next steps and Brockman’s message to Zilis, who acted as a liaison between Musk and OpenAI, detailing notes from a meeting with Musk in which they discussed potentially changing OpenAI’s structure for profit.

Brockman said in a statement that the meeting with Musk “turned into talking about structure (he said that a nonprofit was the right thing a long time ago, maybe not right now; Ilya, and I agree with that for a number of reasons).”

Progress has been made in promotion OpenAI technology In August 2017, Musk suggested that “It’s time to take the next step for OpenAI. This is the trigger event.” That was a reference to Brockman’s letter proposing OpenAI’s 2018 launch.

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OpenAI CEO and co-founder Sam Altman was among the AI ​​startup’s leaders who disagreed with Musk taking control of the company. (Reuters/Lucy Nicholson/File Photo/Reuters Photos)

FOX Business learned from OpenAI’s legal team that Musk then directed his wealth manager to create a public interest corporation called Open Artificial Intelligence Technologies Inc. in September 2017, which spurred negotiations on ownership terms.

Musk insisted on a majority stake and board control and to serve as CEO. When the other co-founders rejected those terms, Musk said the discussions were over.

In January 2018, Musk said that “OpenAI is on a path to certain failure with Google”, and he suggested that the company: acquired by Tesla. However, the OpenAI team objected to doing so, and the two sides could not agree on a way forward.

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OpenAI co-founder Greg Brockman also disagreed with Musk’s request to control OpenAI for profit. (Getty/Getty Images)

Musk resigned from the company’s board in February 2018 after holding a farewell meeting saying he would pursue AI development at Tesla. He also told OpenAI it needed to “immediately raise billions annually” in December 2018. , otherwise it has no chance of staying relevant in the AI ​​race with Google’s DeepMind division.

OpenAI publicly launched its non-profit organization in March 2019. The company shared a preliminary copy of the statement with Musk responding: An arm of OpenAI.”

The company’s founders have also repeatedly offered Musk stock in the marginally profitable entity over the years, which Musk has turned down.

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OpenAI has emerged as a leader in the development of generative AI The launch of ChatGPT in November 2022. It has since secured significant investment from Microsoft and other organizations.

XAI has raised billions of dollars since its launch in early 2023 and has released AI models that aim to compete with ChatGPT.

Musk withdrew his original lawsuit against OpenAI in June 2024, but filed a new complaint in August.