Elon Musk and OpenAI: Legal Tensions Escalate
In a new development in the ongoing legal dispute involving Elon Musk and OpenAI, a coalition of 12 former OpenAI staff members has officially expressed their support for Musk’s lawsuit against the AI organisation, highlighting concerns about the startup’s transition from a nonprofit to a profit-oriented entity.
This group, represented by Harvard law professor Lawrence Lessig, submitted a legal brief to a California district court on Friday. They contend that the corporate restructuring undertaken by OpenAI undermines its founding mission and the trust of its stakeholders.
“It would deeply violate the mission if the OpenAI Nonprofit consented to a change in its structure, removing its controlling role,” the document asserts.
These individuals, who had roles at OpenAI from 2018 to 2024, claimed to have observed the company’s shift from its initial nonprofit model to its current focus on commercial pursuits. Among them are notable figures such as Richard Ngo, William Saunders, Gretchen Krueger, and Jeffrey Wu, many of whom have openly critiqued OpenAI’s recent direction.
The legal brief argues that the proposed transition to a for-profit structure by OpenAI would substantially “breach the trust” placed in the organisation by employees, donors, and supporters, all of whom contributed based on the principles of its nonprofit foundation.
Musk, a co-founder of OpenAI since 2015 with the intention of advancing AI “for the benefit of humanity,” has become the most prominent critic of the organisation. He has accused OpenAI, currently directed by CEO Sam Altman, of forsaking its original values in pursuit of aggressive monetisation, particularly in light of ChatGPT’s viral success in late 2022.
In an effort to restore his influence, Musk spearheaded a takeover proposal worth $97.4 billion in February, which OpenAI promptly dismissed. The organisation has since concluded a $40 billion funding round, achieving an astonishing valuation of $300 billion, led by SoftBank, marking the largest private funding raise in the tech industry to date.
OpenAI’s current framework features a capped-profit limited partnership governed by the original nonprofit. The proposed shift would involve the complete establishment of the for-profit segment as a Public Benefit Corporation, paralleling that of competing labs such as Anthropic.
The legal conflict is escalating, with OpenAI recently countersuing Musk. The lab claims he has engaged in a pattern of harassment and accused him of employing “every tool available to inflict harm” on OpenAI.
At the centre of Musk’s argument is the notion that the nonprofit parent of OpenAI has surrendered significant control, a key aspect of his efforts to impede the company’s transformation.
