Elon Musk drops suit against OpenAI and Sam Altman

Elon
Musk
on
Tuesday
withdrew
his
lawsuit
against
OpenAI
and
two
of
the
company’s
co-founders,
Sam
Altman
and
Greg
Brockman,
in
California
state
court.
Musk’s
decision
to
file
to
dismiss
the
suit
came
just
one
day
after
he

publicly
criticized
OpenAI
and
its
new
partnership
with
Apple.

The
case
was
dismissed
without
prejudice,
according
to
a
court
filing
obtained
by
CNBC.

In
February,
Musk
had
filed
a
lawsuit
against
OpenAI,
Altman
and
Brockman
—
the
current
CEO
and
president
of
OpenAI,
respectively
—
for
breach
of
contract
and
fiduciary
duty.

A
hearing
was
scheduled
for
Wednesday
in
San
Francisco,
in
which
the
judge
was
going
to
consider
whether
the
case
should
be
dismissed
as
requested
by
the
defendants.

Experts

told
CNBC
in
March
that
the
case
was
built
on
a
questionable
legal
foundation,
because
the
contract
at
the
heart
of
the
suit
was
not
a
formal
written
agreement
that
was
signed
by
all
parties
involved.

Rather,
Musk
had
alleged
that
the
early
OpenAI
team
had
set
out
to
develop artificial
general
intelligence,
or
AGI,
“for
the
benefit
of
humanity,”
but
that
the
project
has
been
transformed
into
a
for-profit
entity
that’s
largely
controlled
by
principal
shareholder Microsoft.

Musk
had
used
much
of
the
35-page
complaint
(plus
attached
exhibits)
he
filed
in
March
to
remind
the
world
of
his
position
in
the
creation
of
a
company
that’s
since
become
one
of
the
hottest
startups
on
the
planet,
(OpenAI
ranked
first
on
CNBC’s Disruptor
50
list in
2023)
thanks
largely
to
the
viral
spread
of
ChatGPT.

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

Last
year,
Musk
debuted
his
own
AI
startup
and
OpenAI
competitor,
xAI,
which
last
month

announced
a
$6
billion
Series
B
funding
round.
Investors
included
Andreessen
Horowitz,
Sequoia
Capital
and
Fidelity
Management
&
Research
Company.

X.AI
seeks
to
“understand
the
true
nature
of
the
universe,”
according
to
its
website.
Last
year,
X.AI
released
a
chatbot
called
Grok,
which
the
company
says
is
modeled
after
“The
Hitchhiker’s
Guide
to
the
Galaxy.”
The
chatbot
debuted
with
two
months
of
training
and
has
real-time
knowledge
of
the
internet,
the
company
claims.

Representatives
for
Musk
and
Altman
did
not
immediately
respond
to
a
request
for
comment.

—CNBC’s
Lora
Kolodny
contributed
to
this
report.

Correction:
The
lawsuit
was
filed
in
February.
An
earlier
version
of
this
story
misstated
the
month.