Coin Press - OpenAI countersues Musk as feud deepens

In legal documents filed Wednesday in northern California's federal court, OpenAI alleges Musk became hostile toward the company after abandoning it years before its breakthrough achievements with ChatGPT.

"Musk could not tolerate seeing such success for an enterprise he had abandoned and declared doomed," OpenAI said in the filing.

The lawsuit is the latest round in a bitter feud between the generative AI (genAI) start-up and the world's richest man, who sued OpenAI last year, accusing the company of betraying its founding mission.

In its countersuit, the company alleges Musk "made it his project to take down OpenAI, and to build a direct competitor that would seize the technological lead -- not for humanity but for Elon Musk."

Musk founded his own genAI startup, xAI, in 2023, and has invested tens of billions of dollars to compete with OpenAI and the other major AI players.

OpenAI was established in December 2015 as a nonprofit research lab with the mission of ensuring that artificial general intelligence (AGI) -- the term used for human-level AI -- would "benefit all humanity."

Musk was among its initial backers alongside CEO Sam Altman, giving a key investment to get the project up and running.

According to the counterclaims, Musk's involvement was short-lived.

The filing alleges that in 2018, Musk departed after OpenAI's leadership refused "to bow to Musk's demands for control of the enterprise or, alternatively, its absorption into Musk's electric car company, Tesla."

OpenAI also contends that Musk never fulfilled his financial commitment to the organization, delivering "not even close" to a promised $1 billion.

The company is now valued at $300 billion after its latest funding round of $40 billion, the biggest capital-raising session ever for a startup.

OpenAI claims that Musk's assault has included press attacks and malicious campaigns broadcast to Musk's more than 200 million followers on X, the platform he owns, as well as "a sham bid for OpenAI's assets."

The legal battle between Altman and Musk has intensified amid OpenAI's plans for a restructuring that would transform the company into a public benefit corporation while maintaining the nonprofit parent organization.

OpenAI claims Musk is deliberately misrepresenting this move as a full conversion from nonprofit to for-profit status.

The AI lab is seeking an injunction to halt Musk's "further unlawful and unfair action" and compensation for damages allegedly caused by his actions.

OpenAI on Monday said it raised $40 billion in a new funding round that valued the ChatGPT maker at $300 billion, the biggest capital-raising session ever for a startup.

T.Morelli--CPN