Musk Claims OpenAI Violated Original Partnership Deal

COUNT VI: BREACH OF EXPRESS CONTRACT (Against Altman and OpenAI, Inc.)

247. Plaintiff re-alleges and incorporates by reference paragraphs 1 through 246 inclusive, as though fully set forth herein.

248. In a series of express written correspondence in 2015, Altman and Musk entered into a valid, enforceable, and binding agreement to co-found a non-profit entity (OpenAI, Inc.) to develop leading AI/AGI technology. Per their founding agreement, which under Altman’s leadership was ratified and/or adopted by OpenAI, Inc., Musk was to contribute capital, provide integral advice, and use his stature and track record to recruit leading scientific talent, attracting further contributions to OpenAI, Inc. In exchange, and as consideration for Musk’s contributions, Altman promised that OpenAI, Inc. (i) would be a non-profit and develop AI/AGI for the benefit of humanity, not personal profits, and (ii) to that end, would make OpenAI, Inc.’s technology largely open source, subject only to genuine safety considerations, and to not conceal nor concentrate its technology for proprietary commercial reasons.

249. Musk fulfilled all of his obligations and has performed and/or complied with all terms and conditions of the agreement that he was required to perform and/or comply with, except those which were waived and/or excused, or the non-performance of which was justified, and is in no matter or respect in breach of said agreement. From OpenAI, Inc.’s founding in 2015 through September 2020, Musk contributed more than $44 million to OpenAI, Inc., provided key advice on research to be conducted, played an integral role in recruiting world-class talent to OpenAI, Inc. like its Chief Scientist Dr. Sutskever, and due to his participation and stature, attracted financial contributions by others to the non-profit.

250. In 2023, on information and belief, Altman and OpenAI, Inc. breached their agreement with Musk by, among other things:

a. Failing to publicly disclose the non-profit’s research and development, including details on GPT-4, GPT-4T, and GPT-4o’s architecture, hardware, training method, and training computation;

b. Licensing and/or furnishing OpenAI, Inc.’s GPT-4 and related technology exclusively to Microsoft, and by concentrating it in this single giant for-profit corporation;

c. Permitting Microsoft, a publicly traded for-profit business, to occupy a seat on OpenAI, Inc.’s Board of Directors and exert undue influence and control over OpenAI’s activities;

d. Closing off OpenAI, Inc.’s technology for profit and erecting a “paywall” excluding the public from open usage of GPT-4 and related technology to advance Defendants and Microsoft’s own private commercial interests;

e. Self-dealing and manipulating the non-profit’s assets to enrich themselves by, for example causing OpenAI, Inc. to excessively patronize businesses in which Altman owns a significant interest, for his personal enrichment; and

f. Currently working to convert the non-profit into a fully for-profit commercial entity.

251. Defendants’ obligations to perform were not waived nor were their breaches and/or failures to perform justified and/or excused. Defendants intentionally concealed their wrongful conduct, which prevented Musk from discovering their scheme, notwithstanding his exercise of due diligence.

252. As a direct and proximate result of Altman and OpenAI, Inc.’s conduct, acts, and omissions alleged hereinabove, Defendants have deprived Musk of the benefit of the parties’ agreement and have caused Musk to suffer damages, including but not limited to the financial contributions he made to OpenAI, Inc., the loss of the time and resources he expended to direct research and recruit talent and damage to his reputation, in an amount to be adjudicated and determined at trial, but which vastly exceeds $75,000, plus prejudgment interest.

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