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Tesla CEO files lawsuit against OpenAI and its CEO over closed source practices



OpenAI Elon Musk

Tesla and SpaceX CEO Elon Musk has filed a lawsuit against artificial intelligence (AI) company OpenAI and its CEO Sam Altman for violating the company’s open-source non-profit status.

This lawsuit was filed on Thursday, February 29, 2024, in San Francisco Super Court which mentions that Musk found that OpenAI’s new development model has compromised its promise to public and open source artificial general intelligence.

The lawsuit says that Microsoft, the world’s top tech company, now has full control over OpenAI and its board. These combined are “refining an AGI to maximize profits or Microsoft”.


Musk also claims OpenAI’s new practices breach its open source contract and are involved in unfair business, therefore, the company should turn back to open source.

The suit also wants an injunction to block OpenAI, its president Gregory Brockman, CEO Sam Altman, and Microsoft from generating profit from the company’s AGI technology.

Found in 2015, OpenAI registered as a non-profit research company with Elon Musk, and Sam Altman as the founding members. As an open-source organization, the company must preserve its founding core to remain transparent and reflective in its research and code openly.


In 2019, the company applied a hybrid model and restructured the company as “capped-profit”. It means that the firm still operates a non-profit component but it also created a for-profit subsidiary.

This restructuring brought major investment from Microsoft. OpenAI on the other hand defends this expansion for sustainability in its operations.

New Influence

Microsoft is now the biggest OpenAI partner and a user of its AI products. In December last year, OpenAI fired Sam Altman and re-hired in the same month. This brought Microsoft an observer seat in the company.


This new change was also questioned in the suit filed by Musk “OpenAI, once carefully crafted non-profit structure was replaced by a purely profit-drive CEO and a Board with inferior technical expertise in AGI and AI public policy. The board now has an observer seat reserved solely for Microsoft.”

There are no further details available about the next development in this story.

(source – Courthousenews)


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