Elon Musk, owner of Tesla and the X platform (formerly Twitter), attends an anti-Semitism symposium titled “Never Again: Talking Words or Deep Conversation” in Krakow, Poland on January 22, 2024.

Beata Zavrtzel | Nurphoto | Getty Images

When it comes to litigation, Elon Musk’s definition of victory may not always win in court.

Last week, Musk sued OpenAI and co-founders Sam Altman and Greg Brockman for breach of contract and fiduciary duty. Experts say the case is built on dubious legal ground because the contract at the heart of the case is not a formal written agreement signed by all parties involved.

Rather, Musk claimed that OpenAI’s early team set out to develop artificial general intelligence, or AGI, “for the benefit of humanity,” but that the project was transformed into a for-profit company largely controlled by the major shareholder Microsoft.

Musk used much of the 35-page complaint (plus attached evidence) on Friday to tell his side of the story and remind the world of his central position in creating a company that has since become one of the hottest startups around on the planet, (OpenAI ranked #1 on CNBC’s 2023 Disruptor 50 list) thanks in large part to the virality of ChatGPT.

“It’s certainly good publicity for Elon Musk,” Kevin O’Brien, a partner at Ford O’Brien Landy LLP and a former assistant U.S. attorney, told CNBC. “But I’m not sure about the legal part.”

O’Brien, who is not involved in any dealings with Musk, added: “One thing that struck me is that there is no contract.”

In the lawsuit, Musk’s lawyers say they want OpenAI to return to its work as a research lab and no longer exist for Microsoft’s “financial benefit.” Musk, whose fortune exceeds $200 billion, is not interested in the legal costs of bringing a lawsuit that has no clear personal economic benefit and is of dubious merit.

Shannon Capone Kirk, global head of e-discovery and AI for Ropes & Gray LLP, told CNBC that Musk may simply be seeking to force more information into the public domain about how OpenAI works and how its business goals have changed in recent years. years.

Sam Altman, CEO of OpenAI, during an interview at Bloomberg House on the opening day of the World Economic Forum in Davos, Switzerland, on January 16, 2024.

Chris Ratliff | Bloomberg | Getty Images

It’s a “high public interest case that could result in OpenAI being available to everyone,” said Kirk, who has not worked on any cases involving Musk. “Is that the real purpose?”

In their complaint, Musk’s lawyers argued that OpenAI “has transformed itself into a de facto closed-source subsidiary of the world’s largest technology company: Microsoft.” They also say the agreement conflicts with a 2015 memorandum of understanding and certificate of incorporation that OpenAI established with Musk, who was a major donor to OpenAI in its early years.

Musk’s lawyers said their client contributed more than $15 million to OpenAI in 2016, “more than any other donor” and helped the startup build a team of “top talent.” The following year, Musk gave nearly $20 million to OpenAI, which lawyers reiterated was more than other backers. In total, Musk invested more than $44 million in OpenAI from 2016 through September 2020, according to the lawsuit.

The case fits the pattern for Musk, who frequently posts on X and comments in public forums about his role in creating OpenAI.

In November, Musk told an audience at The New York Times’ DealBook conference that OpenAI had strayed from its original mission.

“OpenAI should be renamed ‘super closed source maximum profit AI,’ because that’s what it is,” Musk said on stage at the event. He noted that it had transformed from an “open source foundation” to a multi-billion dollar “closed source for-profit corporation.”

Is there an injury?

In the lawsuit, Musk’s lawyers argue that the inner workings of OpenAI’s GPT-4 AI model are “a complete secret except to OpenAI — and, on information and belief, Microsoft” and that the secrecy is driven by commercial gain, not safety. For a time, Musk publicly butted heads with Microsoft, and in May 2023, Musk’s lawyers accused the company of using X (formerly Twitter) data in unauthorized ways.

Even if OpenAI’s mission has changed, that doesn’t mean Musk has a solid legal case.

“If he has any hope of recovery, he’s going to have to prove that there was that agreement — that the company was open and not for profit and all that other stuff, and that the failure to do so caused him harm, which is separate issue,” O’Brien said. “It’s hard to see where the hurt is here.”

Musk’s lawyers did not respond to a request for comment.

Musk has his own artificial intelligence company, X.AI, which unveiled a competing chatbot called Grok in November after two months of training. In December X.AI filed with the SEC to raise up to $1 billion in an equity offering. Musk is also developing technologies for autonomous vehicles and humanoid robotics, which require advances in AI Tesla.

He’s been known to hire OpenAI bigwigs, bringing Andrei Karpati, a former OpenAI software engineer, to Tesla in 2017. Most recently, Musk hired OpenAI’s Kyle Kosich to join X.AI.

One of Musk’s goals with the case, lawyers said, could be to shed light on the details of OpenAI’s GPT-4 in the discovery process, if it comes to that. O’Brien said it can be difficult to keep intellectual property and other internal details secret when a lawsuit is filed.

Elon Musk wants OpenAI to break Microsoft contract and go back to being a non-profit: Walter Isaacson