Elon Musk Sues Open AI and Sam Altman for Breach of Founding Contract

[erek]

"Elon Musk in his individual capacity has sued Sam Altman, Gregory Brockman, Open AI and its affiliate companies, of breach of founding contract, and a deviation from its founding goal to be a non-profit tasked with the development of AI toward the benefit of humanity. This lawsuit comes in the wake of Open AI's relationship with Microsoft, which Musk says compromises its founding contract. Musk alleges breach of contract, breach of fiduciary duty, and unfair business practices against Open AI, and demands that the company revert to being open-source with all its technology, and function as a non-profit."

https://www.techpowerup.com/319837/...tman-for-breach-of-founding-contract#comments

 

[Derangel]

Billionaire douchebag sues other billionaire douchebags. Pity there’s no resolution that results in all of them losing billions. Regardless, I actually agree with Musk here. OpenAI should remain totally open source. I’d argue that ALL major AI tech should be open source. There’s enough dangers with everything going “AI” these days without the tech being black boxed.

 

[Lakados]

Overview​

We founded the OpenAI Nonprofit in late 2015 with the goal of building safe and beneficial artificial general intelligence for the benefit of humanity. A project like this might previously have been the provenance of one or multiple governments—a humanity-scale endeavor pursuing broad benefit for humankind.
Seeing no clear path in the public sector, and given the success of other ambitious projects in private industry (e.g., SpaceX, Cruise, and others), we decided to pursue this project through private means bound by strong commitments to the public good. We initially believed a 501(c)(3) would be the most effective vehicle to direct the development of safe and broadly beneficial AGI while remaining unencumbered by profit incentives. We committed to publishing our research and data in cases where we felt it was safe to do so and would benefit the public.
We always suspected that our project would be capital intensive, which is why we launched with the goal of $1 billion in donation commitments. Yet over the years, OpenAI’s Nonprofit received approximately $130.5 million in total donations, which funded the Nonprofit’s operations and its initial exploratory work in deep learning, safety, and alignment.
It became increasingly clear that donations alone would not scale with the cost of computational power and talent required to push core research forward, jeopardizing our mission. So we devised a structure to preserve our Nonprofit’s core mission, governance, and oversight while enabling us to raise the capital for our mission:

• The OpenAI Nonprofit would remain intact, with its board continuing as the overall governing body for all OpenAI activities.
• A new for-profit subsidiary would be formed, capable of issuing equity to raise capital and hire world class talent, but still at the direction of the Nonprofit. Employees working on for-profit initiatives were transitioned over to the new subsidiary.
• The for-profit would be legally bound to pursue the Nonprofit’s mission, and carry out that mission by engaging in research, development, commercialization and other core operations. Throughout, OpenAI’s guiding principles of safety and broad benefit would be central to its approach.
• The for-profit’s equity structure would have caps that limit the maximum financial returns to investors and employees to incentivize them to research, develop, and deploy AGI in a way that balances commerciality with safety and sustainability, rather than focusing on pure profit-maximization.
• The Nonprofit would govern and oversee all such activities through its board in addition to its own operations. It would also continue to undertake a wide range of charitable initiatives, such as sponsoring a comprehensive basic income study, supporting economic impact research, and experimenting with education-centered programs like OpenAI Scholars. Over the years, the Nonprofit also supported a number of other public charities focused on technology, economic impact and justice, including the Stanford University Artificial Intelligence Index Fund, Black Girls Code, and the ACLU Foundation.

In that way, the Nonprofit would remain central to our structure and control the development of AGI, and the for-profit would be tasked with marshaling the resources to achieve this while remaining duty-bound to pursue OpenAI’s core mission. The primacy of the mission above all is encoded in the operating agreement of the for-profit, which every investor and employee is subject to:

I'm not saying Elon is bitter that SpaceX's own AI projects have essentially gone up in smoke, but...
This sounds like he is working as a front man for his friends who were ousted from the Open AI board when their coup failed.

 

[LukeTbk]

I'm not saying Elon is bitter that SpaceX's own AI projects have essentially gone up in smoke, but...

Are the Tesla one progressing well ? Image recognition, self-driving, etc...

This seem like a we will choose to pay a penalty for breach of contract here.

 

[Lakados]

Are the Tesla one progressing well ? Image recognition, self-driving, etc...

This seem like a we will choose to pay a penalty for breach of contract here.

Tesla has been switching from their own AI to one of Nvidia's over the past few years, I am not so sure there is an actual breach of contract they are still governed by their nonprofit, as per their 2019 mission statement.

Musk is wondering how the $100M he invested in a non-profit became the "owner" of a $30B market cap company. So the profit pays up to the non-profit who then pays out based on the shareholders, but his $100M investment is nothing compared to the Billions put in by Microsoft and others, so they get the bulk of the money so Musk is claiming that there is no way that the "little" non-profit can be taking proper control of the monster that their for-profit arm has become. This is very similar to the arguments the former Open AI board was making when they fired Sam originally, Musk seems to have a new hobby of taking on lawsuits on behalf of others so this isn't a surprise.

 

[LukeTbk]

but his $100M investment is nothing compared to the Billions put in by Microsoft and others,

At the value at the time of investing, I would not be so sure.

are still governed by their nonprofit,

Which sound a bit like a loophole, usually contract have implicit often explicit no loophole allowed clause. My guess would be there an obvious but very complicated point and there is a chance of a billion dollar settlement out of court Musk team would have in mind. A bit like the OpenAI board example, there so much money for the openAI business side in play that they will find a way to stay a for profit business, would it be to just create a new entity or becoming multi millionaire microsoft employees.

Tesla has been switching from their own AI to one of Nvidia's over the past few years,

Nvidia provide the Tesla self-driving software ?

 

[Lakados]

Nvidia provide the Tesla self-driving software ?

I don't know the specifics but Tesla spent $300M on Nvidia hardware and partnerships in 2023 alone. They have been working together since 2018, and he is quoted as saying he would be buying more Nvidia hardware but can't because Nvidia isn't building enough of them.

"We're using a lot of Nvidia hardware. We'll continue to use -- we'll actually take Nvidia hardware as fast as Nvidia will deliver it to us. Tremendous respect for Jensen and Nvidia. They've done an incredible job. And frankly, I don't know, if they could deliver us enough GPUs, we might not need Dojo. But they can't. They've got so many customers. They've been kind enough to, nonetheless, prioritize some of our GPU orders."

They use Nvidia hardware to build and train the AI, then they use their own hardware to run it inside the vehicles.

 

[LukeTbk]

I don't know the specifics but Tesla spent $300M on Nvidia hardware and partnerships in 2023 alone

Well yes, openAI also buy Nvidia hardware. Tesla also make their own training and infering chips I think... there is much more than chips that go into building decade worth of millions of car large amount of sensor data, training model, and a full self-driving AI system solution.

 

[Lakados]

The structure in more detail​

While investors typically seek financial returns, we saw a path to aligning their motives with our mission. We achieved this innovation with a few key economic and governance provisions:

• First, the for-profit subsidiary is fully controlled by the OpenAI Nonprofit. We enacted this by having the Nonprofit wholly own and control a manager entity (OpenAI GP LLC) that has the power to control and govern the for-profit subsidiary.
• Second, because the board is still the board of a Nonprofit, each director must perform their fiduciary duties in furtherance of its mission—safe AGI that is broadly beneficial. While the for-profit subsidiary is permitted to make and distribute profit, it is subject to this mission. The Nonprofit’s principal beneficiary is humanity, not OpenAI investors.
• Third, the board remains majority independent. Independent directors do not hold equity in OpenAI. Even OpenAI’s CEO, Sam Altman, does not hold equity directly. His only interest is indirectly through a Y Combinator investment fund that made a small investment in OpenAI before he was full-time.
• Fourth, profit allocated to investors and employees, including Microsoft, is capped. All residual value created above and beyond the cap will be returned to the Nonprofit for the benefit of humanity.
• Fifth, the board determines when we've attained AGI. Again, by AGI we mean a highly autonomous system that outperforms humans at most economically valuable work. Such a system is excluded from IP licenses and other commercial terms with Microsoft, which only apply to pre-AGI technology.

We strive to preserve these core governance and economic components of our structure when exploring opportunities to accelerate our work. Indeed, given the path to AGI is uncertain, our structure is designed to be adaptable—we believe this is a feature, not a bug.

Microsoft​

Shortly after announcing the OpenAI capped profit structure (and our initial round of funding) in 2019, we entered into a strategic partnership with Microsoft. We subsequently extended our partnership, expanding both Microsoft’s total investment as well as the scale and breadth of our commercial and supercomputing collaborations.
While our partnership with Microsoft includes a multibillion dollar investment, OpenAI remains an entirely independent company governed by the OpenAI Nonprofit. Microsoft is a non-voting board observer and has no control. And, as explained above, AGI is explicitly carved out of all commercial and IP licensing agreements.
These arrangements exemplify why we chose Microsoft as our compute and commercial partner. From the beginning, they accepted our capped equity offer and our request to leave AGI technologies and governance for the Nonprofit and the rest of humanity. They have also worked with us to create and refine our joint safety board that reviews our systems before they are deployed. Harkening back to our origins, they understand that this is a unique and ambitious project that requires resources at the scale of the public sector, as well as the very same conscientiousness to share the ultimate results with everyone.

https://openai.com/our-structure


For all I know Musk is mad at the return caps.

I don't know the legalese enough at this level to say anything meaningful here but while Musks claims have merit it looks like a stretch.

 

[Lakados]

Well yes, openAI also buy Nvidia hardware. Nvidia also make their own training and infering chips I think... there is much more than chips that go into building decade worth of millions of car large amount of sensor data, training model, and a full self-driving AI system solution.

Yeah looking at it, they are making their own, buying Nvidia hardware as fast as Nvidia can deliver it, and recently signed on to AMD for $500M in their AI chips, so I have no F'ing clue what they are doing and honestly I don't think they do either.

 

[sfsuphysics]

Are the Tesla one progressing well ? Image recognition, self-driving, etc...

Interest you mentioned this, how long had FSD been "two years away" yet companies like Waymo and Cruise actually did it, mind you in city streets and not at high rates of speed, and they look way goofier with all the sensors and camera on the car, but it does seem like Tesla has no AI to speak of

 

[Lakados]

Interest you mentioned this, how long had FSD been "two years away" yet companies like Waymo and Cruise actually did it, mind you in city streets and not at high rates of speed, and they look way goofier with all the sensors and camera on the car, but it does seem like Tesla has no AI to speak of

I think the difference is Tesla is trying to work it into a usable product while the others seem to be happy in a perpetual development stage.

Tesla does a lot of AI in the back end and only runs the algorithms inside their vehicles and works to develop better sensors and scanning algorithms.

Tesla does a lot of back end work on recognition and identification algorithms and processing that should get more recognition than it does. I would not at all be surprised if in a few years they launched a series of security solutions or if many years from now it was leaked that they had multiple government contracts (not all with the US Government) for solutions for identification, location, and tracking based solutions.

 

[erek]

Billionaire douchebag sues other billionaire douchebags. Pity there’s no resolution that results in all of them losing billions. Regardless, I actually agree with Musk here. OpenAI should remain totally open source. I’d argue that ALL major AI tech should be open source. There’s enough dangers with everything going “AI” these days without the tech being black boxed.

Sam wants to be a Trillionaire though

Sam Altman Seeks Trillions of Dollars to Reshape Business of Chips and AI OpenAI chief pursues investors including the U.A.E. for a project possibly requiring up to $7 trillion https://www.wsj.com/tech/ai/sam-alt...-to-reshape-business-of-chips-and-ai-89ab3db0

 

[Lakados]

It should be known that Elon was a founder of Open AI but left in 2018 when things got hard and they failed to secure the funds (short by about 800M) they needed to operate. Which is what prompted their restructuring in 2019 which is what brings them to where they are now.

The Open in Open AI was never anything to do with Open Source but the broader interpretation in that is it vendor agnostic, like X/Open and the Open Group, or how Docker calls itself an Open Platform despite being primarily closed source.

Elon is bitter he divested and wrote it off to do his own work at Tesla before it blew up.

That said OpenAI and their non profit owners do have too much money and it’s going to be very difficult to maintain their non profit status unless they do something drastic.

 

[LukeTbk]

Interest you mentioned this, how long had FSD been "two years away" yet companies like Waymo and Cruise actually did it, mind you in city streets and not at high rates of speed, and they look way goofier with all the sensors and camera on the car, but it does seem like Tesla has no AI to speak of

Are you saying Tesla does not have some of the best self driving car system outhere, does not know about it, I thought they were the leader, they can even self drive in covered by snow condition now in some videos.

 

[blandead]

First, the for-profit subsidiary is fully controlled by the OpenAI Nonprofit. We enacted this by having the Nonprofit wholly own and control a manager entity (OpenAI GP LLC) that has the power to control and govern the for-profit subsidiary.

That said OpenAI and their non profit owners do have too much money and it’s going to be very difficult to maintain their non profit status unless they do something drastic.

Didn't you already post the answer to that?

Basically non-profit can keep investing into the tech while the spin-off for profit sells it commercially. Win-win for both

 

[sfsuphysics]

Are you saying Tesla does not have some of the best self driving car system outhere, does not know about it, I thought they were the leader, they can even self drive in covered by snow condition now in some videos.

I'm saying there not a public street in the nation where Tesla cars can legally operate without a driver behind the wheel, the same can not be said companies like Waymo. I don't know if Teslas are good or not, but what I do know is they arent allowed to operate as such.

 

[LukeTbk]

I'm saying there not a public street in the nation where Tesla cars can legally operate without a driver behind the wheel, the same can not be said companies like Waymo. I don't know if Teslas are good or not, but what I do know is they arent allowed to operate as such.

Technology of car able to drive themselves (with an error level close enough to humans to be worth it) and car being legally allowed to do so will be linked but a bit different subject, same for Tesla AI tech in robots.

 

[Lakados]

https://www.businessinsider.com/sam...s-elon-musk-involvement-openai-lawsuit-2024-3

In response to Elons add campaign blasting OpenAI and his lawsuit they have released a bunch of the emails from Elon to them back from 2017 and 2018.
Turns out it he was very vocal on why OpenAI should go for profit and he was offering up funds in exchange for them appointing him as the CEO and attaching them to Tesla.
That failed and he walked away but they ultimately did go for profit using his plan as a guide though slightly modified to be more inline with their original guidelines and legal obligations.
Legally his lawsuit is dead in the water, but that doesn’t stop him his platforms from blasting OpenAI as dangerous and blah blah blah.

 

[EnFission]

Sam wants to be a Trillionaire though

Sam Altman Seeks Trillions of Dollars to Reshape Business of Chips and AI OpenAI chief pursues investors including the U.A.E. for a project possibly requiring up to $7 trillion https://www.wsj.com/tech/ai/sam-alt...-to-reshape-business-of-chips-and-ai-89ab3db0

There's no way he realistically thinks he can get that much. He threw out an insanely high number so that later he can pitch $25-100 billion and make it seem like a sweet deal. Also headlines.

 

[socK]

https://www.businessinsider.com/sam...s-elon-musk-involvement-openai-lawsuit-2024-3

In response to Elons add campaign blasting OpenAI and his lawsuit they have released a bunch of the emails from Elon to them back from 2017 and 2018.
Turns out it he was very vocal on why OpenAI should go for profit and he was offering up funds in exchange for them appointing him as the CEO and attaching them to Tesla.
That failed and he walked away but they ultimately did go for profit using his plan as a guide though slightly modified to be more inline with their original guidelines and legal obligations.
Legally his lawsuit is dead in the water, but that doesn’t stop him his platforms from blasting OpenAI as dangerous and blah blah blah.

Obligatory


View: https://media4.giphy.com/media/PXCBR9byJHSUw/giphy.gif?cid=6c09b952lf2px5e9kx6gqgk43162zkqb3lnpbmgbli6d14ip&ep=v1_internal_gif_by_id&rid=giphy.gif&ct=g

 

[Algrim]

It should be known that Elon was a founder of Open AI but left in 2018 when things got hard and they failed to secure the funds (short by about 800M) they needed to operate. Which is what prompted their restructuring in 2019 which is what brings them to where they are now.

The Open in Open AI was never anything to do with Open Source but the broader interpretation in that is it vendor agnostic, like X/Open and the Open Group, or how Docker calls itself an Open Platform despite being primarily closed source.

Elon is bitter he divested and wrote it off to do his own work at Tesla before it blew up.

That said OpenAI and their non profit owners do have too much money and it’s going to be very difficult to maintain their non profit status unless they do something drastic.

Elon is bitter because he was only going to donate more to OpenAI if they gave him leadership... While OpenAI's mission creep seems to be a bit of a mess, Elon is in full sour grapes mode. IMHO.

EDIT: I should have read to the end of the thread before posting this, as you've basically just posted what I did. Apologies!

 

[socK]

Elon is bitter because he was only going to donate more to OpenAI if they gave him leadership... While OpenAI's mission creep seems to be a bit of a mess, Elon is in full sour grapes mode. IMHO.

EDIT: I should have read to the end of the thread before posting this, as you've basically just posted what I did. Apologies!

Musk gonna Musk, nothing surprising

Dude loves to gaslight and play victim.

 

[mullet]

This dude is awesome!!


View: https://www.youtube.com/watch?v=KbzGy3whpy0

 

[sfsuphysics]

Elon is bitter because he was only going to donate more to OpenAI if they gave him leadership...

So what you're saying is some private entity, Musk, wanted to buy controlling stake in this company... but now he's upset that some private entity bought controlling stake in the company. I means it's almost like he's a hypocrite or something.

 

[DPI]

https://www.businessinsider.com/sam...s-elon-musk-involvement-openai-lawsuit-2024-3

In response to Elons add campaign blasting OpenAI and his lawsuit they have released a bunch of the emails from Elon to them back from 2017 and 2018.
Turns out it he was very vocal on why OpenAI should go for profit and he was offering up funds in exchange for them appointing him as the CEO and attaching them to Tesla.
That failed and he walked away but they ultimately did go for profit using his plan as a guide though slightly modified to be more inline with their original guidelines and legal obligations.
Legally his lawsuit is dead in the water, but that doesn’t stop him his platforms from blasting OpenAI as dangerous and blah blah blah.

Elon is always working an angle - usually in service to some ulterior, master of the universe type powerplay in his head. I used to like the guy - Tesla and SpaceX seemed cool, his "working for the betterment of humanity" shtick seemed genuine. But in more recent years am finding him dangerous, as he's slow-slid into embitterment and a child-like defensiveness when challenged or questioned; as he engages in doublespeak and gaslighting including on national security issues; as he undermines our relationships with our allies, to name a few. The list is long.

 

[sfsuphysics]

Musk always kind of rubbed me the wrong way,

Elon is always working an angle - usually in service to some ulterior, master of the universe type powerplay in his head. I used to like the guy - Tesla and SpaceX seemed cool, his "working for the betterment of humanity" shtick seemed genuine. But in more recent years am finding him dangerous, as he's slow-slid into embitterment and a child-like defensiveness when challenged or questioned; as he engages in doublespeak and gaslighting including on national security issues; as he undermines our relationships with our allies, to name a few. The list is long.

I was never a "fan" of Musk, I felt too much like a new "House of Jobs" type of corporate worship was on the horizon, but for me my view of him took a drastic dive after the whole Thailand cave divers incident, where he in all his arrogant AF wisdom thought the best course of action was to build a mini-sub to bring the kids out, and understandably those who have done cave dives & rescues and actually knows like 10000x more than him on this matter told him "no" maybe in not so unkind words or whatever I don't know they probably were stressed out by all the armchair experts out there, and he got into a pissing contest calling the guy a paedo, that was it he officially went off the deep end. It was like all the bullshit about the media referring to him as "a real life Tony Stark" he took quite literally, and sure Tesla, SpaceX, but at the heart of the matter he's actually closer to a Steve Jobs saying "you see how easy this scratches? Keys in a pocket will do this. Fix it!" level of 'genius'