AI Industry Experts Doubt Musk Will Win OpenAI Suit

Elon Musk is suing OpenAI, alleging the company has strayed from its mission to develop artificial intelligence “for the benefit of humanity broadly,” but some experts doubt his chances of prevailing.

The Issue

In a lawsuit filed in a San Francisco court Thursday (Feb. 29), Musk’s legal team asserted that in 2015, Open AI CEO Sam Altman and Co-founder, President and Chairman Greg Brockman approached the tech billionaire, leading to an agreement to create a nonprofit laboratory dedicated to developing artificial general intelligence (AGI) for the betterment of humanity.

AGI research attempts to create software with human-like intelligence and the ability to self-teach. Musk, who helped start OpenAI in 2015, left the board in 2018. He had previously warned in 2014 about the dangers of AI, suggesting it could be more dangerous than nuclear weapons.

“To this day, OpenAI, Inc.’s website continues to profess that its charter is to ensure that AGI ‘benefits all of humanity,’” the lawsuit said. “In reality, however, OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft.”

Musk’s lawsuit alleged that OpenAI, along with Altman and Brockman, deviated from their initial pledges in 2023 by unveiling GPT-4, the technology powering the company’s ChatGPT chatbot, while concealing its architecture. According to the legal action, this approach indicated a departure from their foundational goal of transparency and commitment to benefiting humanity.

PYMNTS reached out to OpenAI Friday (March 1) for comment on the lawsuit but has not received a response.

Seth Kugler, a lawyer with Cupertino, California-based Grellas Shah LLP who focuses on corporate governance and AI, told PYMNTS in an interview that it will be “very difficult” for Musk to prove the lawsuit’s contention that OpenAI abandoned its original mission because it licensed GPT-4 and kept elements proprietary.

“In order to prove that this is a breach, Musk must show that GPT-4 is artificial general intelligence,” Kugler said. “AGI is an artificial intelligence that can broadly perform any task as well or better than a human. Accordingly, it can teach itself to do new tasks outside of its original training — basically a full substitute for high-level human intelligence.”

Reputation Risks

Some observers say Musk’s lawsuit could potentially harm OpenAI even if it fails. Muddu Sudhakar, CEO of the AI firm Aisera, told PYMNTS in an interview that the lawsuit could disrupt OpenAI’s dominance in the field, as legal battles may divert resources and tarnish its reputation, impacting its ability to attract talent and investment.

“There are likely to be concerns from customers as well,” Sudhakar said. “They were already worried because of the abrupt and temporary ouster of Altman last year.”

But Sudhakar said that some of Musk’s accusations may have merit. He noted that OpenAI’s shift toward a for-profit model and governance issues have raised questions about its commitment to its original nonprofit mission of safe AI development.

“The complicated nonprofit structure essentially sparked the mess last year with Altman,” he said. “However, it could even be more of a problem with Musk since he was a founder and monetary backer of OpenAI. It also looks like he has evidence, such as emails. More importantly, Musk has seemingly endless financial resources. He also has a vested interest since he wants his own AI system to get more traction.”

The legal action marks another controversy in a series of issues surrounding OpenAI. An inquiry by the Federal Trade Commission launched in January will allow the agency to closely review agreements between Microsoft, Google, Amazon and AI providers, aiding its understanding of how these deals affect competition. Microsoft is one of the backers of OpenAI.

Kugler noted that the government has not recently been in the habit of bringing massive antitrust actions in the tech space.

“However, politics can play a role here, and if Congress and their constituents become concerned enough about the threat posed specifically by AI, anything could happen,” he said.

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