Musk claims OpenAI violated original partnership agreement

Count VI: Breach of Express Contract (vs. Altman and OpenAI, Inc.)

247. The applicant reiterates paragraphs 1 to 246 inclusive and incorporates them by reference as if they were fully set out herein.

248. In a series of express written correspondences in 2015, Altman and Musk entered into a valid, enforceable and binding agreement to jointly establish a non-profit organization (OpenAI, Inc.) to develop leading AI/AGI technology. Pursuant to their founding agreement, which was ratified and/or adopted by OpenAI, Inc. under Altman’s leadership, Musk was to contribute capital, provide extensive advice and leverage his reputation and track record to recruit leading scientific talent and thus attract further contributions to OpenAI, Inc. In return, and in consideration for Musk’s contributions, Altman promised that OpenAI, Inc. would (i) be non-profit and develop AI/AGI for the benefit of humanity and not for personal gain, and (ii) to that end, would make OpenAI, Inc.’s technology largely open source, subject only to genuine security considerations, and not conceal or concentrate its technology for proprietary commercial reasons.

249. Musk has fulfilled all of his obligations and has performed and/or complied with all of the terms of the Agreement that he was required to perform and/or comply with, except those waived and/or excused or for which non-performance was justified, and is not in breach of said Agreement in any way. Since the founding of OpenAI, Inc. in 2015 through September 2020, Musk has donated more than $44 million to OpenAI, Inc., provided important advice on research to be conducted, played an integral role in recruiting world-class talent to OpenAI, Inc. such as its Chief Scientist Dr. Sutskever, and attracted financial contributions from others to the nonprofit based on his commitment and reputation.

250. Based on the information and knowledge available, Altman and OpenAI, Inc. breached their agreement with Musk in 2023 by, among other things:

a. Failure to publicly disclose 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. License and/or provide OpenAI, Inc.’s GPT-4 and related technology exclusively to Microsoft and by concentrating it in that single, giant for-profit company;

c. Allow Microsoft, a publicly traded for-profit company, to hold a seat on the board of OpenAI, Inc. and to exercise undue influence and control over OpenAI’s activities;

d. 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 the private commercial interests of Defendants and Microsoft;

e. Self-dealing and manipulation of the nonprofit’s assets for his own personal gain, such as by causing OpenAI, Inc. to excessively support companies in which Altman owns a significant stake for his personal gain; and

f. Work is currently underway to transform the non-profit organization into a fully for-profit commercial enterprise.

251. Defendants’ performance obligations were not waived, nor were their breaches and/or defaults justified and/or excused. Defendants intentionally concealed their misconduct, which prevented Musk from discovering their scheme despite his due diligence.

252. As a direct and proximate result of Altman and OpenAI, Inc.’s conduct, acts and omissions alleged above, Defendants deprived Musk of the benefits of the parties’ agreement and caused damages to Musk, including, but not limited to, the financial contributions he made to OpenAI, Inc., the loss of the time and resources he spent directing research and recruiting talent, and harm to his reputation in an amount that will be determined at judgment but far exceeds $75,000 plus interest.

253. Musk has no adequate remedy at law for many of the damages he has suffered as a result of Defendants’ breaches and omissions, and those damages cannot be adequately, reasonably, or precisely measured or compensated by punitive damages. Accordingly, Musk also seeks and is entitled to performance of Defendants’ contractual obligations.