OpenAI trustee accused of misusing donor funds

Count XIII: Aiding and Abetting Breach of Fiduciary Duty (against OpenAI’s for-profit companies)

316. The applicant reiterates paragraphs 1 to 315 inclusive and incorporates them by reference as if they were fully set out herein.

317. As a charity and as persons soliciting donations on behalf of a charity, OpenAI, Inc., Altman, and Brockman each owe a fiduciary duty to Musk, from whom they actively solicited charitable donations, under, among other things, Cal. Bus. & Prof. Code § 17510.8.

318. Altman, Brockman, and OpenAI, Inc. solicited and received contributions from Musk by repeatedly making to him material promises, representations, and assurances that they would develop AI for the benefit of humanity, make their technology available primarily as open source, avoid concentration, and do not operate for the profit of any person or company, as evidenced by, among other things, the emails, corporate filings, and online statements referenced above.

319. Based on the information and knowledge available, Altman, Brockman and OpenAI, Inc. breached their fiduciary duties to Musk by:

a. Confidentiality of the non-profit organization’s research and development, including details of the architecture, hardware, training method and training computation of GPT-4, GPT-4T and GPT-4o;

b. Exploiting Musk’s contributions and the technological assets they funded in a purely for-profit venture;

c. License and/or provide OpenAI, Inc.’s GPT-4 and related technology exclusively to Microsoft and concentrate it into that single, massive for-profit company;

d. allow Microsoft, a publicly traded company, to hold a seat on the board of OpenAI, Inc. and otherwise exercise improper influence and control over OpenAI’s activities;

e. Blocking OpenAI, Inc.’s technology for commercial reasons and erecting a “paywall” that excludes the public from open use of GPT-4 and related technology to further Defendants’ and Microsoft’s own commercial interests;

f. Self-dealing and manipulation of the nonprofit’s assets for personal gain, such as by allowing OpenAI, Inc. to receive excessive support from companies in which Altman owns a significant stake for his personal gain; and

g. Work is currently underway to transform the non-profit organization into a purely for-profit enterprise.

320. The OpenAI For-Profit Entities each had actual knowledge of the fiduciary duties that Altman, Brockman, and OpenAI, Inc. owed to Musk because Altman and Brockman were instrumental in their creation. The very purpose of the OpenAI For-Profit Entities is to provide Altman and Brockman with the ability to work for non-charitable purposes and to avoid the fiduciary duties they owe to donors. Furthermore, to the best of their knowledge and belief, Altman and Brockman were, at all relevant times, officers, agents, employees, and/or owners whose knowledge and intent are attributable to the OpenAI For-Profit Entities.

321. OpenAI’s for-profit entities provided substantial support to Altman and Brockman and aided and abetted their respective breaches of fiduciary duty by helping them exploit OpenAI, Inc.’s intellectual property and employees for Defendants’ private benefit rather than to further the nonprofit’s express charitable purposes. 322. Defendants intentionally aided and abetted these breaches of fiduciary duty for their own benefit, and this was a material factor in Musk’s injury.

323. Based on the information and knowledge available, Defendants have enriched themselves enormously through the resulting misappropriation of the nonprofit’s assets and their own dealings in blatant disregard of the fiduciary duties that Altman, Brockman and OpenAI, Inc. had and continue to have to Musk.

324. Defendants intentionally concealed their misconduct, so that Musk, despite exercising due diligence, was unable to uncover their conspiracy.

325. As a direct and proximate result of the above-mentioned conduct, acts and omissions of the OpenAI For-Profit Entities, Musk is entitled to compensation for the damages he has suffered and will suffer, including all income, gains, compensation, profits and benefits that Defendants or any of them have received or will receive from the wrongful acquisition of Musk’s contributions to OpenAI, Inc., including late payment interest. Musk is entitled to an order requiring Defendants jointly and severally to produce an accounting determining the amount of such proceeds.

326. As a direct and proximate result of Defendants’ misconduct, acts and omissions referred to above, Musk has been harmed and Defendants have been and will continue to be unjustly enriched in an amount to be determined at trial but far exceeding $75,000 for which restitution and/or non-refundable disgorgement is appropriate, including the imposition of a trust; a declaration by this Court that Defendants are jointly and severally the trustees for the benefit of Musk; and an order that Defendants assign to Musk all profits, assets, property and ill-gotten gains that Defendants have received or will receive that are attributable to Musk’s ill-gotten financial and other contributions to OpenAI, Inc.

327. Defendants’ misconduct, acts and omissions have caused and will continue to cause immediate, substantial harm to Musk, much of which cannot be adequately or reasonably measured or compensated for by damages. The harm this misconduct will cause to Musk is both immediate and irreparable, and the amount of harm Musk will suffer if this misconduct continues without restraint. During the term of this proceeding, Musk is entitled to an injunction permanently enjoining Defendants, their officers, agents and employees, and all persons acting in concert with them, from engaging in any such further misconduct.

328. The defendants’ misconduct constitutes oppression, fraud, and/or malice pursuant to Cal. Civ. Code § 3294 and entitles Musk to an appropriate punitive award to punish or make an example of the defendants. The amount of the punitive award will be determined at trial.