Billionaire Elon Musk enters courtroom showdown with OpenAI

Jury selection is to begin on Monday in a high-profile legal battle between billionaire Elon Musk and artificial intelligence (AI) startup OpenAI, which he accuses of betraying its non-profit mission.

The clash in a courtroom across the bay from San Francisco pits the world’s richest man against a startup that Musk once backed and now competes against in the booming AI sector.

OpenAI’s ChatGPT is a formidable rival to the Grok chatbot made by Musk’s xAI lab.

While the lawsuit filed by Musk is part of a feud between him and OpenAI chief executive Sam Altman, it spotlights a debate over whether AI should ultimately benefit the privileged few or society as a whole.

Court filings lay out how Altman tried to convince Musk to back OpenAI in 2015, acting as a co-founder for a non-profit lab whose technology “would belong to the world”. Musk pumped some $38 million into the lab before he left.

OpenAI is now valued at $852 billion, with Microsoft among its backers, and is preparing to go public on the stock market.

The judge presiding over the trial is aiming for a jury to decide by late May whether OpenAI broke a promise to Musk in its drive to be a leader in AI or just smartly rode the technology to glory.

Musk duped?

Musk argues in his lawsuit that he was deceived about OpenAI’s mission being altruistic.

The tycoon cites an email from Altman in 2017 claiming that he remained “enthusiastic about the non-profit structure” of their AI venture after Musk threatened to cut off funding for the lab.

Just a few months later, however, OpenAI established a commercial subsidiary in the face of needing to invest hundreds of billions of dollars in data centres to power its technology.

Over the course of the following two years, Microsoft pumped billions of dollars into OpenAI and the tech stalwart’s stake in the startup is now valued about $135bn.

Microsoft chief executive Satya Nadella is among those slated to testify at the trial.

Aimed at Altman

Along with calling for OpenAI to be forced to revert to a pure nonprofit, Musk’s suit urges the ousting of Altman and OpenAI co-founder and president Greg Brockman.

Musk is also seeking as much as $134bn in damages and to have the court make OpenAI sever ties with Microsoft.

During pre-trial hearings, US Judge Yvonne Gonzalez Rogers mused that Musk team seemed to be “pulling numbers out of the air” when it came to calculating damages.

If the jury sides with Musk, it will be left to Rogers to determine any remedies or payment.

In what OpenAI has dismissed as a public relations stunt, Musk has vowed that any damages awarded in the suit will go to the startup’s nonprofit foundation.

Quest for control?

OpenAI internal communications brought to light by the lawsuit reveal tensions that culminated with the temporary ouster of Altman as AI chief executive in late 2023.

Musk’s legal team highlighted a 2017 entry in Brockman’s personal journal reasoning that it would be lying if Altman publicly asserted OpenAI would stay a nonprofit but became a corporation a short time later.

OpenAI now has a hybrid governance structure, giving its nonprofit foundation control over a for-profit arm.

In court filings, OpenAI countered that its breakup with Musk was due to his quest for absolute control rather than its nonprofit status.

“This case has always been about Elon generating more power and more money for what he wants,” OpenAI said in a post on X, a platform Musk owns.

“His lawsuit remains nothing more than a harassment campaign that’s driven by ego, jealousy and a desire to slow down a competitor.”

The startup noted that days after Musk entered the AI race in 2023 he called for a 6-month moratorium on development of advanced AI.