As the long-standing feud between Tesla and X CEO Elon Musk, and ChatGPT’s maker OpenAI, heats up, a US federal judge revealed that parts of their lawsuit might go to trial.
Musk, who co-founded the tech powerhouse alongside Altman in 2015, is arguing against its conversion to a for-profit company and claims the AI trailblazer is using a monopoly to eliminate competitors.
Yet, with Musk previously supporting OpenAI’s for-profit model, it’s uncertain whether the argument will impact the AI company’s transition.
Elon Musk vs OpenAI’s Legal Battle Heats Up
Last year, Musk filed a lawsuit against OpenAI, claiming the Silicon Valley powerhouse “manipulated him” to “Shakespearean proportions” into co-founding the AI company under the guise of it being a for-profit enterprise focused on developing humanity.
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He later expanded the lawsuit to add federal antitrust claims, as he believes OpenAI has been acting anticompetitive since he left its board in 2018.
Doubling down on his accusations, Musk asked the judge presiding over the case to halt OpenAI from pivoting to a for-profit model in December.
US District Judge Yvonne Gonzalez Rogers criticized Musk’s argument for being a “stretch”, and causing “irreparable harm”, in a court session in Oakland, California on Tuesday, and added she isn’t inclined to freeze OpenAI’s plans for that long, and dismissed proceedings by calling the case “billionaires vs billionaires”.
However, Rogers didn’t dismiss Musk’s claims entirely, explaining that Musk will be able to present his arguments to a jury when the case goes to trial in 2027.
OpenAI Defends Its Decision to Scrap Non-Profit Model
According to CEO Sam Altman, transitioning OpenAI from a nonprofit to a for-profit structure is necessary for the company to be able to front the high costs of developing AI. Altman also claims the extra investment will be able to aid them in their central goal of developing Artificial General Intelligence (AGI) – a theoretical type of AI that can match or surpass human intelligence.
Despite the development of AGI being criticized for opening Pandora’s box to unknown risks, OpenAI aims to uphold its original mission of developing “safe and beneficial AGI” while making the switch to for-profit.
This type of restructuring is highly unusual, however, executive director of the UCLA Law Center for Philanthropy and Nonprofits Rose Chan Loui told Reuters. This type of conversion is usually enacted by healthcare organizations, not venture-backed companies.
Is Musk’s Attack on OpenAI Hypocritical?
Musk is no stranger to a court case, with the billionaire previously levying a number of high-profile lawsuits throughout his career, including filings against the US Securities and Exchange Commission (SEC) and X advertisers. Yet, the world’s richest man’s lawsuit against OpenAI’s non-profit pivot may come across as particularly hypocri.
Despite Musk being outspoken about big tech monopolies, the Tesla boss has repeatedly tried and failed to buy rival AI company DeepMind, and previously pushed OpenAI to be a for-profit company in 2017, before deciding to leave after he wasn’t given majority control, according to a blog post by OpenAI.
Musk’s own AI company – xAI – is currently only valued at a fraction of OpenAI, and with the billionaire recently being sidelined from President Donald Trump’s $500Bn Stargate project which heavily involves OpenAI, it’s likely that his recent legal jabs are driven by personal grudge, rather than his moral stance on the safe development of AI.
“Sam Altman” by TechCrunch is licensed under CC BY 2.0.
