Emails Reveal Disputes Over Control, Funding, and Competing Visions
22OpenAI has publicly refuted billionaire Elon Musk’s legal claims against the company, publishing a series of emails and texts on Friday that it says expose inaccuracies in Musk’s lawsuit.
The lawsuit, which has been ongoing for months, accuses OpenAI of abandoning its nonprofit mission to prioritize profits. Tensions escalated last month when Musk sought an injunction to halt OpenAI’s transition into a for-profit entity.
In its statement, OpenAI called Musk’s allegations “baseless” and framed them as motivated by personal grievances.
Disputes Over Control and Direction
OpenAI’s revelations date back to 2015 when Musk reportedly floated the concept of a hybrid structure with both nonprofit and for-profit components. While OpenAI launched as a nonprofit, financial challenges in subsequent years necessitated a reevaluation of its structure.
By June 2017, according to OpenAI’s published communications, Musk proposed merging OpenAI with a hardware company, potentially Cerebras. Musk demanded a majority equity stake of 50%-60% and insisted on being the CEO with “unequivocal initial control” over the organization.
Despite creating a Delaware-registered public benefit corporation, Open Artificial Intelligence Technologies, Inc., Musk’s terms were ultimately rejected by OpenAI leadership. Musk later proposed spinning OpenAI into Tesla, allocating a $1 billion budget to the AI venture, which was also turned down.
In 2018, Musk resigned from OpenAI, citing conflicting visions, and severed most ties with its leadership. OpenAI claims it has since offered Musk equity in its for-profit wing multiple times, but he declined.
Musk’s Countermove
Musk launched his AI firm, xAI, in 2022, which has since developed Grok, an AI model integrated with features on X (formerly Twitter). xAI has also raised significant funding, securing $6 billion last month, bringing its total war chest to $12 billion.
In a new complaint, Musk’s legal team accuses OpenAI of coercing investors to avoid funding xAI and other competitors. The Financial Times reported in October that OpenAI had asked investors to abstain from supporting rival ventures, including xAI.
Accusations of Misconduct
Musk’s motion for an injunction further alleges that OpenAI and Microsoft, a major investor, share proprietary information and resources unlawfully. Google has reportedly called for investigations into the nature of their cloud computing partnership.
Meanwhile, OpenAI faces its own challenges. According to Bloomberg, investors in OpenAI’s latest funding round retain the right to withdraw their investments if the organization does not complete its transition to a for-profit entity within two years.
OpenAI’s Response
“You can’t sue your way to [artificial general intelligence],” OpenAI said in its statement. “We have great respect for Elon’s accomplishments and gratitude for his early contributions to OpenAI, but he should be competing in the marketplace rather than the courtroom.”
