OpenAI fires back against Musk, claims he wanted an OpenAI for-profit

OpenAI fired back at billionaire Elon Musk on Friday, publishing a series of emails and texts that the company claims show Musk’s lawsuit against it is misleading.

Musk’s legal battle with OpenAI, which has been going on for months now, at its core accuses the company of abandoning its original nonprofit mission to make the fruits of its AI research available to all. Things escalated last month, when Musk’s legal team filed for an injunction to halt OpenAI’s in-progress transition from a nonprofit to a for-profit corporation.

OpenAI says Musk’s complaints are baseless — and simply a case of sour grapes.

As far back as 2015, Musk floated the idea of an OpenAI with both a nonprofit and for-profit component, the OpenAI-published emails and texts show. OpenAI ultimately launched as a nonprofit, but several years later faced financing challenges.

On June 13, 2017, according to the OpenAI-published exchanges, Musk suggested that OpenAI merge with a hardware startup — possibly chip company Cerebras. Several members of OpenAI’s leadership agreed, per the messages, and OpenAI started down a path to what president Greg Brockman called an “AI research + hardware for-profit.”

Musk demanded majority equity, OpenAI claims — between 50% and 60%. And he laid out an org structure where he would “unequivocally have initial control of the company” — and be installed its CEO.

Musk went so far as to create a public benefit corporation called “Open Artificial Intelligence Technologies, Inc,” registered in Delaware. But OpenAI leadership rejected Musk’s terms.

Musk then recommended that OpenAI spin into Tesla, his electric vehicle company, with a $1 billion budget that would “increase exponentially.” OpenAI leadership shot this proposal down, too.

It’s at that point, in 2018, that Musk resigned from OpenAI — and largely cut ties with its C-suite. OpenAI claims that it’s offered Musk equity in its for-profit wing on more than one occasion, but that Musk has always declined.

“You can’t sue your way to [artificial general intelligence,]” OpenAI said in a 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.”

Musk formed his answer to OpenAI, xAI, last year. Soon after, the company released Grok, an AI model that now powers a number of features on Musk’s social network, X (formerly known as Twitter). xAI also offers an API that allows customers to build Grok into third-party apps, platforms, and services.

In a complaint filed late last month, Musk’s attorneys allege OpenAI is depriving xAI of capital by extracting promises from investors not to fund it and the competition. In October, the Financial Times reported that OpenAI demanded investors in its latest funding round abstain from also funding any of OpenAI’s rivals, including xAI.

Of course, xAI has had no trouble raising money lately. Last month, the firm closed a $6 billion round reportedly with participation from prominent investors including Andreessen Horowitz and Fidelity. With around $12 billion in the bank, xAI is one of the best-funded AI companies in the world.

Musk’s motion for an injunction also alleges that OpenAI and Microsoft, its close collaborator and an investor, illegally share proprietary information and resources. Google reportedly has also called for investigations into Microsoft’s relationship with OpenAI, specifically the two orgs’ cloud computing arrangements.

OpenAI is under pressure to complete its for-profit transition quickly. According to Bloomberg, investors in its latest funding round will be able to claw back their cash if OpenAI doesn’t convert from a non-profit within two years.