OpenAI Accused of Exploiting Non-Profit Status

COUNT XI: UNFAIR COMPETITION UNDER CALIFORNIA BUSINESS & PROFESSIONS CODE §§ 17200 et seq. (Against All Defendants)

299. Plaintiff re-alleges and incorporates by reference paragraphs 1 through 298 inclusive, as though fully set forth herein.

300. Defendants engaged in unfair competition and other unlawful and/or fraudulent business practices by soliciting contributions from Musk and others under the false pretense that such funds would be used for the non-profit purposes articulated in OpenAI, Inc.’s Certificate of Incorporation, Charter, website, online marketing, blog posts, emails, and other communications.

301. By founding OpenAI, Inc. as a non-profit, Defendants were able to solicit significant “donations,” including from Musk, to purportedly develop AI/AGI, which was to be made largely open source for the public benefit and good of humanity—not closed and proprietary for profit.

302. Defendants actively deceived Musk and the public by effectively using these “donations” as free start-up capital to develop valuable technology which they have concealed for their own personal gain, as described herein. Such conduct has deceived, and will likely continue to deceive, the public, and is unethical, immoral, substantially injurious to consumers, and violates public policy.

303. But for Defendants’ false, misleading, and unlawful practices, Musk would not have made his significant contributions to OpenAI, Inc. Defendants intentionally concealed their wrongful conduct, which prevented Musk from discovering their scheme, notwithstanding his exercise of due diligence.

304. As a direct and proximate result of Defendants’ conduct, acts, and omissions alleged hereinabove, Musk is entitled to recover the damages he sustained and will sustain, including any income, gains, compensation, profits, and advantages obtained, received, or to be received by Defendants, or any of them, arising from the wrongfully obtained contributions Musk made to OpenAI, Inc., which amount vastly exceeds $75,000, including prejudgment interest.

305. Defendants’ wrongful conduct, acts, and omissions have proximately caused and will continue to cause Musk substantial injury and damage, much of which cannot be reasonably or adequately measured or compensated in money damages. The harm this wrongful conduct will cause to Musk is both imminent and irreparable, and the amount of damage sustained by Musk will be difficult to ascertain if such wrongful conduct is allowed to continue without restraint. Musk has no adequate remedy at law with respect to Defendants’ ongoing unlawful conduct.

306. Pursuant to Cal. Bus. & Prof. Code § 17203, Musk is entitled to an injunction during the pendency of this action, and permanently enjoining Defendants, their officers, agents, and employees, and all persons acting in concert with them, from engaging in such further acts of unfair competition.