Musk sues OpenAI for prioritizing profit even as xAI expands

Elon Musk has initiated a new lawsuit against OpenAI, the artificial intelligence startup he co-founded. The lawsuit, filed in the US Federal Court for the Northern District of California, alleges that the company has shifted its focus from being a public good to becoming a for-profit entity.

This marks Musk’s second legal action against OpenAI this year after abruptly dropping a similar lawsuit in June. At the time, the initial lawsuit challenged the ChatGPT developer and Microsoft’s relationship while heavily criticizing the firm’s pivot from its not-for-profit roots.

Lawsuit targets OpenAI and Microsoft

In the new court filing , Musk made similar claims, pointing out that OpenAI has strayed from its original non-profit mission and has become a vehicle for personal enrichment. He argued that the company’s alliance with Microsoft and its network of for-profit affiliates exemplify this shift.

Part of the lawsuit stated:

“OpenAI’s focus shifted from its advertised charitable purpose – to benefit the public and protect humanity – to a vehicle for Altman and his partners’ self-enrichment. This is most clearly evidenced in OpenAI’s partnership with Microsoft and the proliferation of an opaque web of for-profit OpenAI affiliates, recently valued at a whopping $100 billion.”

Musk further accused Altman of breaking his commitment to developing AI for public benefit. Additionally, he claimed that Altman and Greg Brockman, another OpenAI co-founder, deceived him into investing in the firm by leveraging his consistent warnings about the dangers of artificial intelligence. The lawsuit added:

“Altman and his long-time associate Brockman assiduously manipulated Musk into co-founding their spurious non-profit venture, OpenAI, Inc., by promising that it would chart a safer, more open course than profit-driven tech giants.”

This lawsuit’s timing is interesting, considering it comes a few days after Microsoft publicly included OpenAI as a competitor in a regulatory filing. If the case proceeds to court, it could have significant implications for all parties involved.

Musk’s xAI planning expansions

Musk’s lawsuit against OpenAI comes as his for-profit AI startup xAI stepped up its expansion efforts in recent weeks. Reports have revealed that xAI is considering buying another AI startup, Character AI, to attract more talent and test its own Grok chatbot.

Besides that, the billionaire recently considered the possibility of his electric carmaker, Tesla, investing $5 billion in xAI. This move would substantially push the AI startup’s valuation beyond $24 billion, making it one of the fastest-rising companies in the world.

Although plans for this move have yet to be finalized, Musk mentioned on Tesla’s Q2 earnings call that Tesla is learning from xAI, hinting at likely integrations between the two companies. He said:

“I should say Tesla is learning quite a bit from xAI. It’s been actually helpful in advancing full self-driving and in building up the new Tesla data center. Regarding investing in xAI, I think we need to have a shareholder approval of any such investment… I think we need a vote on that.”

Meanwhile, the startup has also announced a gigafactory for computing to be built in Memphis. This plan could see xAI build the largest supercomputer in the world, and it is already attracting concerns from residents about its power consumption.