EXCLUSIVE: Not a day seems to go by that Elon Musk isn’t being sued or threatening to sue someone, but now the X/Twitter owner is back in a legal war with OpenAI, with a twist.
Former OpenAI co-founder Musk will square off anew with his old partners CEO Sam Altman and president Greg Brockman in federal court in a just filed suit that might be one of the biggest tests of the wild growth of the OpenAI venture and the hundreds of billions on the table.
“The perfidy and deceit is of Shakespearean proportions,” declares the fraud and breach of contract filing this morning in the court docket in the Northern District of California.
“Once OpenAI’s technology approached AGI (Artificial General Intelligence), Altman and his accomplices flipped the script,” the unspecified multi-damages complaint adds. “OpenAI’s focus shifted from its advertised charitable purpose – to benefit the public and protect humanity – to a vehicle for Altman and his partners’ self-enrichment. This is most clearly evidenced in OpenAI’s partnership with Microsoft and the proliferation of an opaque web of for-profit OpenAI affiliates, recently valued at a whopping $100 billion.”
Musk, who put millions into the 2015 forming of OpenAI to stop Google’s potential AI dominance, is seeking a jury trial.
(L-R) Elon Musk & Sam Altman
Steve Granitz / FilmMagic / Joel Saget / AFP / Getty Images / Yuichiro Chino / MTStock Studio
If you are experiencing some déjà vu here, let’s just say this courtroom clash was expected.
Earlier this year, as OpenAI was in the midst of a prolonged boardroom battle, billionaire Musk hit the Bay Area-based generative AI company with a California suit demanding it cease going for the big bucks and “return to its mission to develop AGI for the benefit of humanity.” In response to the March breach of contract action in state court, OpenAI said “were this case to proceed to discovery, the evidence would show that Musk supported a for-profit structure for OpenAI, to be controlled by Musk himself, and dropped the project when his wishes were not followed.”
“Seeing the remarkable technological advances OpenAI has achieved, Musk now wants that success for himself,” OpenAI’s lawyers added of the company Musk created in 2015 with Altman, Brockman and others. A June 12 hearing was set on OpenAI and Altman’s motion to throw Musk’s case out. Just before that hearing, OpenAI posted a series of years old emails from Musk that sure seemed like he was interested in the company making money. The he-said, they-say was rendered null and void when the erratic Tesla boss pulled the plug on his own lawsuit on June 11 with an option to refile down the line.
That day is here, now in federal court.
An interesting wrinkle here is that Musk’s case will be waged by Mark Toberoff, the high powered IP attorney who has fought and often won settlements for the estates of IP creators against the biggest studios and entertainment companies. A David to many Goliaths over the years, Toberoff has taken on the likes of Warner Brothers and Disney‘s Marvel on behalf of Superman creators Jerry Siegel and Joe Shuster, Fantastic Four and X-Men co-creator Jack Kirby, plus just last year, the estate of Spider-Man and Iron Man co-creator Steve Ditko. He has also repped singing legend Ray Charles, and once won a preliminary injunction against Warner Bros on a Dukes of Hazzard movie on behalf of the indie film on which the TV series was based.
This seems an unusual match – Musk is one of the world’s richest men, the owner of the social media site X, as well as Tesla, and Space X. His outspoken nature and late night posts and missives makes him seem more like a Lex Luthor type than the underdogs Toberoff usually represents.
Strange bedfellows aside, Toberoff will play to his strength, and the just-filed suit paints a picture of “altruism versus greed.” In that, Musk is positioned on the side of concerns about the existential dangers of AI in the hands of tech giants like Altman, who are allegedly making up the rules as they go for the dough.
“This case is far more than about a $100 Billion start-up; the future of AI and AGI lies in the balance,” Toberoff told Deadline today.
Now, with Musk leaving OpenAI in 2018, some might wonder if the South African was simply out maneuvered by other digital titans. That question will play out in a San Francisco court.
While reports have studios cozying up to OpenAI and Netflix’s Ted Sarandos recently stating that AI could “generate a great set of creative tools” for content providers, much of the twin strikes of WGA and SAG-AFTRA that continue to reverberate through Hollywood came down to union concerns about jobs being eradicated by AI. At the same time, as various media outlets try to find a way to protect their content from AI, publishers like The New York Times and a boatload of music labels are in lawsuits over AI appropriation of content without renumeration or attribution.
Besides the x-factor of Toberoff, this suit will be one that especially bears watching, as both sides boast unlimited capital to wage the legal battle.
