Openai Hits Back At Elon Musk, Claims The Co-founder Once Supported Transitioning To For-profit

Artificial intelligence giant OpenAI has pushed back against Elon Musk's attempts preventing it from transitioning to a for-profit structure. The company has asked a federal judge in California to reject a request by the Tesla and SpaceX founder to halt the move.

On Friday, OpenAI produced a trove of emails and text messages from Musk on its website arguing that the angel investor and co-founder of the company had initially supported a for-profit status. In a legal filing, OpenAI stated that the billionaire changed his stance only after walking away from the company.

Musk, who founded OpenAI in 2015 with current CEO Sam Altman, and other co-founders Liya Sutskever, and Greg Brockman, left the company in early 2018 after a failed attempt to secure full control as a majority shareholder and convince the founders to merge it with Tesla.

In July 2017, Musk held discussions with OpenAI's founders about its future where they talked about changing its structure from a non-profit to a for-profit company. Brockman, the current president of OpenAI, said in a message that Musk agreed with the company being a non-profit in the beginning but it "may not be the right one now". Musk also seemed to suggest that co-founder Sutskever agreed with his stance "for a number of reasons".

When OpenAI made progress in developing its generative AI technology in August 2017, Musk recommended that it was time that the company took the "next step". In an email to Brockman, he said that OpenAI for-profit would launch in 2018.

According to the company's legal team, Musk instructed his then-wealth manager in September 2017 to create a public benefit corporation called Open Artificial Intelligence Technologies Inc., spurring negotiations about ownership terms.

The X owner insisted on holding majority equity and board control and serving as CEO of the company. However, when OpenAI's other co-founders, including Altman, refused those terms, Musk said the discussions were over.

In January 2018, Musk declared that OpenAI was on a "path of certain failure relative to Google", suggesting that the company be acquired by Tesla. However, the company's executives opted against the merger, and the two sides failed to agree on terms to move ahead.

Muks resigned from the company in February 2018 and hosted a farewell meeting where he said that he would pursue AI development at Tesla. In December 2018, he urged the company to raise "billions per year immediately" or it had no chance of being relevant in the AI race with Google's DeepMind led by Demis Hassabis.

In March 2019, OpenAI publicly launched its capped-profit entry, governed by a non-profit. The company shared an advance copy of the announcement with Musk, who replied by saying that he has no financial interest in the for-profit arm of OpenAI. The firm's executives claim to have offered Musk equity in the capped-profit entry multiple times over the years, but he declined.

OpenAI emerged as a front-runner in the development of generative AI with the launch of ChatGPT in November 2022. The company has since attracted investments from Microsoft and is working with Apple to support AI endeavors in Cupertino. Following the company's remarkable success, Musk launched his AI venture called xAI, in March 2023.

xAI has raised billions of dollars from investors and has launched generative AI models that aim to compete with ChatGPT.

In March 2024, Musk filed a lawsuit against OpenAI arguing that it had breached its founding mission as a not-for-profit company by creating a for-profit structure. He withdrew the lawsuit soon after only to refile it in August, claiming that they violated contract provisions by putting profits ahead of public good in the push to advance AI.

In October, he asked U.S. District Judge Yvonne Gonzalez Rogers in Oakland for a preliminary injunction blocking OpenAI from transitioning to a for-profit structure. OpenAI pushed back on the lawsuit by outlining Musk's past stance on setting up a for-profit structure.

OpenAI published a blog post asking Musk to compete in the marketplace rather than the courtroom. Musk has included Microsoft as one of the defendants in his lawsuit, alleging OpenAI of scheming to sideline its rivals and monopolize the generative AI market.

OpenAI denied any conspiracy to restrain competition in the AI field, stating that Musk's request for preliminary injunction is based on "unsupported allegations". In a separate court filing, Microsoft argued that it and OpenAI are independent companies with their own strategies and "compete vigorously with each other and many other firms. The tech giant also noted that