Elon Musk suddenly drops lawsuit against OpenAI

Tesla CEO Elon Musk has unexpectedly withdrawn his lawsuit against OpenAI and its CEO, Sam Altman, the day before a San Francisco judge was to deliberate OpenAI’s request for a dismissal.

Musk launched the lawsuit in February, accusing the ChatGPT parent company of straying from its founding mission of creating AI for the greater good.

The dispute has since been a significant point of contention between two of the tech industry’s most influential figures, who were both involved in the founding of OpenAI in 2015.

The case had been progressing through the California court system until Musk suddenly requested a dismissal with no explanation for the decision yet.

Musk’s case alleged that OpenAI’s shift towards becoming a for-profit entity, including a partnership with Microsoft, violated the company’s “foundational agreement” to prioritise humanity’s greater good.

The case demanded that OpenAI be compelled to open up its technology and that it be prohibited from financially benefiting Microsoft, Altman, or OpenAI president Greg Brockman.

OpenAI and Altman firmly denied the allegations, arguing that no such “founding agreement” existed and suggesting that Musk’s support for the for-profit transition was documented.

In a blog post in March, OpenAI implied that Musk’s actions were driven by professional jealousy, stating, “We’re sad that it’s come to this with someone whom we’ve deeply admired.”

After co-founding the company alongside Altman, Brockman, LinkedIn co-founder Reed Hoffman and investor Peter Thiel, Musk left the board in 2018 amid a power struggle over the company’s direction. Since then, tensions between Musk and Altman have escalated.

Legal experts had expressed scepticism about Musk’s lawsuit, particularly questioning claims that OpenAI had developed AI matching human intelligence.

Despite the dismissal, Musk’s legal manoeuvres and public statements indicate ongoing discord rather than reconciliation.

Shortly after Apple announced its partnership with OpenAI, Musk threatened to ban Apple devices at his companies: “If Apple integrates OpenAI at the OS level, then Apple devices will be banned at my companies,” Musk wrote in a post on X.

And visitors will have to check their Apple devices at the door, where they will be stored in a Faraday cage

— Elon Musk (@elonmusk) June 10, 2024

Apple’s assurances regarding user privacy protections, stating that OpenAI would not track users’ IP addresses or store their requests, have done little to alleviate Musk’s concerns.

Musk’s decision to withdraw the lawsuit may have been strategic, drawing attention to his grievances while avoiding a protracted legal battle.

David Hoffman, a contract law expert from the University of Pennsylvania, told Business Insider that these types of lawsuits “can air a lot of dirty laundry, and it can be a major distraction that could impact their day-to-day operations.”

Over the past few months, Musk has been positioning his companies to play a significant role in the AI industry, actively promoting Tesla as an AI or robotics company.

Moreover, Musk’s AI startup, xAI, announced last July, recently raised $6 billion in a Series B funding round, achieving a valuation of $24 billion.

This positions xAI as the second-most valuable AI company, second only to OpenAI, valued at approximately $80 billion. With these developments, Musk appears prepared to challenge OpenAI’s dominance in the AI sector.