Elon Musk and Sam Altman are in court this week in a trial that could change the future of OpenAI, the company that created ChatGPT.
Musk co-founded OpenAI with Altman and several others in 2015 before stepping down as co-chair in 2018.
The Tesla CEO is arguing the company has drifted too far from its original charitable mission, and its trajectory should be reversed.
A jury will hear the case in a federal court in California.
Key players
Here are the four key players in this story. All are co-founders of OpenAI.
In 2015, OpenAI said it was being set-up as a “non-profit artificial intelligence research company” with a goal “to benefit humanity as a whole, unconstrained by a need to generate financial return”.
Today, it has a for-profit arm under a non-profit parent company.
According to his lawsuit, Musk was the company’s largest early financial backer.
He says he donated $US44 million ($AU60 million) to OpenAI between 2016 and 2020, and also paid the rent for the company’s first San Francisco office.
Business shift
Talks about moving away from non-profit structure began in 2017.
Sutskever sent an email in July of that year, saying the following:
"Increased funding needs will come lockstep with increased magnitude of results. We should discuss options to obtain the relevant funding, as that’s the biggest piece that’s outside of our direct control".
Musk and Altman had the following email conversation in September 2017:
Musk: "I will no longer fund OpenAI until you have made a firm commitment to stay or I’m just being a fool who is essentially providing free funding to a startup. Discussions are over."
Altman: "I remain enthusiastic about the non-profit structure!"
OpenAI alleges that by late 2017, Musk was open to making the company for-profit, but only if he got “majority equity, initial board control, and to be CEO”.
Brockman, Sutskever, Altman, and two other senior execs rejected the proposal, saying in a 2024 statement that at the time they believed “it was against the mission for any individual to have absolute control”.
Musk left OpenAI in February 2018 after he failed to convince the team to merge with his other company Tesla.
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After he left, OpenAI set up a for-profit subsidiary under the non-profit.
ChatGPT
OpenAI began developing ChatGPT in 2018.
Its earlier models were publicly released alongside detailed research papers, which were in line with the company’s original commitment to openness and transparency.
In 2023, OpenAI launched its fourth generation model, GPT-4. However, unlike earlier models, OpenAI did not release GPT-4’s code publicly – a move Musk alleges “radically departed from their mission”.
Lawsuit
Musk’s case hinges on five main legal complaints:
- He gave millions to OpenAI on the understanding it would stick to its original mission of building AI for the public good. He argues that changed when it partnered with Microsoft and kept GPT-4’s source code private.
- He relied on unofficial promises that OpenAI stay non-profit, and sustained financial harm when the company later changed course.
- Under California law, OpenAI had a duty to use his money for the company’s original charitable mission instead of commercial deals.
- OpenAI misled him by accepting his money on one set of terms, before changing to a different set of values.
- Musk is also asking for full details of how his money was spent, saying he can’t trace it because OpenAI controls the records and hasn’t provided full transparency.
OpenAI reacts
Shortly after Musk launched his legal challenge, OpenAI released a statement pushing back on several of his claims.
It disputed the significance of Musk’s financial contribution, and argued Musk was aware of, and agreed with, the decision to keep GPT-4’s source code private.
In internal emails, Sutskever said that as the company got closer to building more advanced AI, it would “make sense to start being less open,” which Musk agreed with.
Trial
The trial began this week in California with jury selection, where nine jurors were chosen ahead of the first hearings.
Both parties have since delivered opening statements.
Musk’s lawyers accused OpenAI of “stealing a charity,” while lawyers for the company said the trial was only happening “because Musk didn’t get his way”.
Musk is seeking $US150 billion ($AU209 billion) in damages, and a court order that would force OpenAI to turn back into a non-profit company.
