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Elon Musk is filing a lawsuit against ChatGPT maker OpenAI and CEO Sam Altman. The tech tycoon alleges that Altman and his company placed profits above seeking to benefit humanity.

Musk, along with Altman, was one of the founders of OpenAI in 2015. He was one of the initiative’s key investors. As an “anti-Big Tech” organization, it was intended to place principles above profit-making activities. For that reason, it was founded as a nonprofit; its ideals were enshrined in a founding document that made advancing humanity its mission.

Meanwhile, OpenAI Global LLC, its subsidiary, is a for-profit company. It did not hurt OpenAI over the past year: driven by a billion-dollar investment from Microsoft, the company managed to market GPT-3, GPT-4 and other models through ChatGPT, image generator DALL-E 3, as well as indirect implementations of GPT models such as Salesforce’s EinsteinGPT and Microsoft’s Copilot offering.

The numbers don’t lie: OpenAI reached annual revenues of 1.45 billion euros through numerous licensing deals and revenues from subscription services. One of the company’s most important LLMs is GPT-4, which launched a few months after the launch of ChatGPT (November 2022). It was developed entirely in secret.


Musk’s lawsuit revolves not so much around this lack of transparency, but rather the supposedly relentless pursuit of profits. This is said to be at the expense of the ideals OpenAI still claims to have. “To this day, OpenAI Inc.’s website continues to profess that its charter is to ensure that AGI “benefits all of humanity.” In reality, however, OpenAI Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft,” the suit alleges. It’s almost the exact same verbiage as seen in Musk’s February 17th, 2023 tweet about OpenAI.

The indictment also cites the turmoil within OpenAI from late last year. At the time, Altman, President Greg Brockman and Microsoft allegedly teamed up to remove unwanted parts of the board of directors. Altman was briefly fired as CEO, but returned within days. Meanwhile, Microsoft now occupies an observer chair on OpenAI’s board of directors.

According to Musk, Altman handpicked his new board to ensure it lacked the expertise to manage AI governance. “The new Board consisted of members with more experience in profit-centric enterprises or politics than in AI ethics and governance. They were also reportedly ‘big fans of Altman’”.

Musk walked away

Musk left OpenAI in 2018 because of a stated potential conflict of interest due to self-driving AI work at Tesla. This wasn’t really the case however. According to sources from Semafor, Musk was dissatisfied with OpenAI’s AI lack of competitiveness against Google and others. The tech tycoon reportedly offered to take over the company, but this was rejected. Only later followed the unveiling of GPT-2 (2019) and its more prominent successors. Meanwhile, Musk has since started xAI, the company behind chatbot Grok.

In 2019, OpenAI announced that it wanted to resell its own technologies through licensing deals. To remain competitive, a move to a for-profit model was necessary, according to Altman. GPT-3 surprised even AI experts with the convincing nature of the chatbot in an interview. However, OpenAI only became a household name once it had launched ChatGPT, paving the way for unprecedented commercial success.

AI security as plaything and marketing ploy

Over the past year, Sam Altman has become a familiar face among political leaders. He regularly speaks about the potential dangers of AI and claims it gives him sleepless nights. Feeding these fears may be difficult to reconcile with the developments OpenAI is making through GPT models. Although there are established competitors with the likes of Google’s Gemini LLMs, for example, OpenAI’s offerings count as highly lucrative state-of-the-art models that are by no means transparent. At least to an outside observer, it looks like a far cry from the company’s nonprofit origins.

The case, brought in San Francisco, has no clear precedent. Therefore, it remains to be seen what court decision will follow. However, non-profits have been convicted of abusing this status before, as was the case in 2015 for the Cancer Fund of America and related Cancer Support Services. Whether the nonprofit OpenAI, however, with its for-profit subsidiary OpenAI LLC, will face the same legal action is not apparent. After all, Altman and his company have openly stated for years that the additional revenue is needed to keep AI in good standing.

Also read: Elon Musk confirms planned email service “XMail”