Lawsuit Over OpenAI’s For-Profit Shift May Go to Trial
Elon Musk won a key legal victory after a judge allowed a jury trial in his lawsuit alleging that ChatGPT maker OpenAI violated its founding mission by restructuring into a for-profit entity, keeping the high-profile case moving forward.
Musk was a cofounder of OpenAI in 2015 but left in 2018 and now runs an AI company that competes with it.
US District Judge Yvonne Gonzalez Rogers in Oakland, California, says at a hearing that there was “plenty of evidence” suggesting OpenAI’s leaders made assurances that its original nonprofit structure was going to be maintained.
The judge says that there were enough disputed facts to let a jury consider the claims at a trial scheduled for March, rather than decide the issues herself. She said she would issue a written order after the hearing that addresses OpenAI's bid to throw out the case.
The court battle comes amid a broader showdown over dominance in the market for generative artificial intelligence. Musk’s xAI and its chatbot Grok are competing with OpenAI and other technology developers.
Musk is seeking unspecified monetary damages from what he calls "ill-gotten gains" by OpenAI.
OpenAI in a statement after the hearing said: "Mr Musk's lawsuit continues to be baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating this at trial.
Musk's artificial intelligence startup, xAI, did not immediately respond to a request for comment.
Steven Molo, a lead trial attorney for Musk and xAI, said after the hearing that "we look forward to presenting all the evidence of the defendants' wrongdoing to the jury."
Musk contends he contributed about $38 million, roughly 60 percent of OpenAI’s early funding, along with strategic guidance and credibility, based on assurances that the organization would remain a nonprofit dedicated to the public benefit.
The lawsuit accuses OpenAI co-founders Sam Altman and Greg Brockman of plotting a for-profit switch to enrich themselves, culminating in multibillion-dollar deals with Microsoft and OpenAI, Altman and Brockman have denied the claims, and they called Musk "a frustrated commercial competitor seeking to slow down a mission-driven market leader."
Also Read: US Halts Technology Deal with Britain
Microsoft, which is also a defendant, urged Gonzalez Rogers to toss Musk's claims against it. A lawyer for Microsoft said there was no evidence that the company "aided and abetted" OpenAI.
Microsoft did not immediately respond to a request for comment.
Also Read: Huang Confirms Full Production of Nvidia’s Next-Gen Processors
Lawyers for OpenAI at the hearing asked Gonzalez Rogers to enter judgment against Musk, contending that he had not shown enough of a factual basis to sustain his allegations including fraud and breach of contract.
Also Read: Reliance Puts Amitabh Bachchan at the Helm Of Campa Sure
OpenAI also contends that Musk failed to bring his allegations in a timely manner. Gonzalez Rogers said the jury would be asked to weigh whether the lawsuit was filed outside the statute of limitations.