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June 12, 2024updated 13 Jun 2024 4:23pm

Elon Musk drops OpenAI lawsuit in U-turn move

The tech billionaire recently expressed disagreements with OpenAI's new partnership with Apple.

By Tech Monitor Staff

Elon Musk has withdrawn his lawsuit against OpenAI, after accusing the company he co-founded in 2015 of deviating from its central mission to “benefit humanity” in favour of commercial interests. 

Elon Musk
Elon Musk unexpectedly withdrew his suit against OpenAI on Wednesday. (Photo: Frederic Legrand – COMEO / Shutterstock)

A California court dismissed the breach of contract lawsuit on Wednesday at Musk’s request, only 24 hours before it was set to hear OpenAI’s bid to get the case thrown out. Musk asked the court to drop the case without specifying any reasons and asked that it would do so “without prejudice”, potentially allowing him to bring the case back to court in the future.

The tech billionaire filed the lawsuit earlier this year, stating that “OpenAI Inc has been transformed into a closed-source, de facto subsidiary of the largest technology company in the world: Microsoft.” The legal document read: “Under its new board, it is not just developing but is actually refining an AGI to maximise profits for Microsoft, rather than for the benefit of humanity.” 

In March 2024, OpenAI and Musk’s fellow founding members wrote a blog post to dismiss his accusations. As part of their defence, they published emails he sent to them, in which he appears to be in favour of turning OpenAI into a for-profit firm (rather than a mere research company). Moreover, experts have repeatedly expressed reticence over Musk’s accusations. In fact, the idea of benefitting humanity – although it certainly was one of OpenAI’s central principles – was an agreement between the founding members including Musk, Sam Altman and Greg Brockman rather than a contractually binding rule. This could mean that Musk’s claims result from a personal disaccord rather than a legal dispute.

While the case is no longer active, it doesn’t seem like the disagreements between Tesla’s boss and OpenAI have died down. On Tuesday this week, Musk made headlines for calling Apple’s new on-device AI system in partnership with OpenAI “creepy spyware” and threatened to ban all Apple products at his companies if the firm goes forward with integrating OpenAI’s ChatGPT into its services.

Musk’s OpenAI lawsuit is far from being the only ethical concern expressed about generative AI. Lawsuits regarding copyright, privacy and security surrounding AI-powered technologies are multiplying.

Alina Patelli, a senior lecturer in computer science at Aston University told Tech Monitor that the growing presence and impact of AI means “public and private sectors should work with regulators to make it ethical, safe, and accessible.” She said: “Whilst legitimate litigation is a fundamental democratic right and may prove to be an effective incentive for AI companies to prioritise the societal benefits of the technologies they produce over corporate interests, it is worth considering taking the more sustainable path of constructive collaboration, whereby mainstay big tech actors join resources and align moral values to ensure the AI transformation they enable is in service of the public good.”

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Musk sued by Tesla investor over ‘unlawful profits’ on Tuesday

While the OpenAI legal battle has ended – at least for now – Musk was sued by an institutional shareholder of his company Tesla on Tuesday in Delaware in a separate matter. The investor accused Musk of profiting billions of dollars from Tesla stock using insider information and asked the court that Tesla’s boss return “unlawful profits”, Reuters reported.

This new lawsuit comes just as Musk’s $56bn pay package at Tesla is set to be reviewed by voting shareholders on Thursday.

Read more: Apple announces new AI system Apple Intelligence in partnership with OpenAI

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