Mirrors of greed: Elon Musk, OpenAI and the tech brat battle

The legal clash between Elon Musk and OpenAI exposes the profit-driven scramble shaping the future of artificial intelligence, writes Dr Binoy Kampmark.

THEY ARE A disagreeable bunch, with disagreeable ideas to match.

The querulous brats behind the drive for technological servility and plugged-in stupidity were always going to scrap over which dystopian vision they most prefer. Elon Musk thought he was onto something, hounding OpenAI and its current CEO, Sam Altman, for supposedly betraying one of those visions.

In his US$150 billion (AU$211 billion) legal action, Musk alleged that Altman and OpenAI president Greg Brockman deceived him into investing in the company in its initial stages when salad green altruism was modish and humanity mattered.

The litigation was a prong in a broader strategy to unseat Altman from OpenAI, sabotage the company’s US$852 billion (AU$1.2 trillion) restructuring into a public benefit corporation and direct US$134 billion (AU$188.5 billion) to OpenAI’s non-profit foundation.

The deception centred on maintaining OpenAI as a non-profit entity and pursuing artificial intelligence (AI) ventures in ways beneficial to humanity. (When the tech brats have a stab at humour, they go in hard.) According to Musk, OpenAI had effectively stolen a charity. (Between 2015 and 2017, he had personally put US$44 million (AU$62 million) into OpenAI, funds, he argues, that were essentially misappropriated when the company sloughed its non-profit skin.)

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In an introductory overview of the company from December 2015, the company describes itself as a ‘non-profit artificial intelligence research company’ with the object of advancing ‘digital intelligence in a way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return. Since our research is free from financial obligations, we can better focus on a positive human impact’.

How things change. On 18 May, a mere two hours were needed for a nine-member jury in Oakland, California, to unanimously find against Musk, basing their decision on that most technical of grounds: the statute of limitations. This left two civil claims – breach of charitable trust and unjust enrichment – untested.

Having left OpenAI’s board in 2018, Musk dithered till February 2024 to file suit. Musk claimed to have only discovered the company’s abandonment of its non-profit mission in 2022, when Microsoft showed its interest with an investment of US$10 billion (AU$14.7 billion). OpenAI’s legal team argued that the pertinent events – the creation of a for-profit subsidiary in 2019, for instance, and Microsoft’s initial injection of US$1 billion (AU$1.4 billion) that same year – were already matters of common knowledge.

Time on the statute of limitations was running well before 2022.

U.S. District Judge Yvonne Gonzalez Rogers of the Northern District of California saw no reason to question the jury’s conclusion:

“There's a substantial amount of evidence to support the jury's finding, which is why I was prepared to dismiss on the spot.”

The trial was impressively ugly and amounted to an insult to the stout intelligence of the public whose welfare both parties claim to be protecting. The legal representatives from both sides jousted over respective views on AI and the credibility of the disputants. Musk’s lawyer, Steven Molo, pressed jurors to consider that several witnesses, including former OpenAI chief scientist Ilya Sutskever, doubted Altman’s candour, going so far as to find him mendacious.

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Altman had also conceded under cross-examination that he “told the occasional lie”. “Sam Altman’s credibility is directly at issue,” Molo crowed. “If you don’t believe him, they cannot win.”

OpenAI, Musk accusingly asserted, had wrongfully attempted to enrich investors and insiders at the expense of the non-profit. Along the way, it had failed to make AI safety a matter central to its operations. Microsoft, he further argued, had always known that OpenAI cared more about money than altruism.

A personal journal entry penned by Brockman in November 2017 was also instructive, baldly revealing that OpenAI could not assert fidelity to its non-profit status if it intended to become a benefit corporation months later. So it came to pass that Altman, Brockman and OpenAI were accused of the very same temptations, frailties and indifference to safety found in Musk’s own conduct.

On the issue of safety and welfare, Musk’s own xAI, acquired by the space and rocket company SpaceX, which is also part of the South African’s fiefdom of misrule, has drawn the attention of the European Commission and the UK watchdog Ofcom over Grok, a product that has been used to create sexualised images. The combination arising from xAI and SpaceX could lead to an initial public offering that would surpass OpenAI in size, which sinks the scurrilous suggestion of altruism. Provided things go smoothly, the world’s first trillionaire might arise.

OpenAI was hardly going to leave Musk’s feeling of tech purity unchallenged. It was he, not OpenAI, who saw the shimmering dollar signs. Going back to 2017, he had floated the idea of a for-profit subsidiary with one caveat: he would have exclusive control. Failing this, he left the board in a huff.

OpenAI’s attorney William Savitt suggested that Musk, having failed to “get his way at OpenAI”, filed his lawsuit only after establishing his own competing AI company in 2023. But most saliently, he waited too long to claim breaches of the founding agreement regarding the building of safe artificial intelligence for the benefit of humanity. “Mr Musk may have the Midas touch in some areas, but not in AI,” claimed Savitt.

The decision will boost OpenAI’s predatory reflexes. The non-profit status in this field has been found wanting and the scramble for profits has been given much encouragement in this most unprincipled of frontiers.

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Sarah Kreps of the Tech Policy Institute at Cornell University opines:

“The decision is likely to reassure investors and the broader AI sector because it avoids a potentially chaotic outcome that could have challenged OpenAI’s commercial structure, Microsoft partnership and future fund-raising plans.”

This was by no means the first time Musk had taken to throwing a brief of anger against OpenAI.

In March 2024, showing that intelligence can be authentically artificial, Musk filed a lawsuit citing a contract violation of a contract that did not exist. Using the misguided legal offices of Irell & Manella – the same firm that erroneously claimed on behalf of PETA that a monkey could hold copyright – Musk pursued what Techdirt’s Mike Masnick appropriately called a ‘vibes based’ action.

Masnick wrote:

‘Elon doesn’t have a contract with OpenAI which the company could have breached. And that’s kinda a problem in a breach of contract lawsuit.’

This insurmountable logic led Musk to abandon the lawsuit in June that year.

For Musk, the wells of indignation run deep. This is a man in the habit of losing or settling claims, be it with former Twitter executives and employees of the social platform now known as X, losing to investors in that same company for misleading public statements made during his untidy, often chaotic takeover, or having his lawsuit promptly dismissed against advertisers that exited that troubled platform.

While such behaviour should draw scorn, those drawing benefit from Musk's litigious pathologies – lawyers, in the main – can only be grateful.

A credulous Shubha Ghosh, lawyer and law academic at Syracuse University, says:

“In a lot of ways, he is just another businessperson asserting his rights. I don’t think he’s abusing the legal system. Whether he uses it effectively, I’m not sure.”

Wrong, certainly, on the first count.