Elon Musk Dismisses Contract Breach Lawsuit Against OpenAI

Tesla Inc. Chief Executive Elon Musk has withdrawn his lawsuit against US artificial intelligence (AI) firm OpenAI Inc. and its Chief Executive Sam Altman, which alleged the company of breaching its original contract after abandoning its fiduciary duty.

A filing in San Francisco Superior Court stated that the lawyers for the billionaire entrepreneur filed the motion to drop the legal complaint, put forward in February, without declaring the reason for the decision.

The case was dismissed without prejudice, according to the filing, providing Musk with an opportunity to refile the suit should he choose to do so. The ChatGPT developer is set to attend a hearing on Wednesday on its motion to withdraw the complaint.

Spokespersons for Musk and Altman have yet to respond to a request for comment.

Musk’s Opposition Against OpenAI and a Questionable Contract

The move brings the months-long legal battle between two of OpenAI’s founders to a close.

Musk, who co-founded the popular AI startup in 2015, sued the firm in February for purportedly turning its back on its original purpose of building artificial general intelligence (AGI) for humanity’s benefit by keeping its most powerful AI systems closed-source.

The lawsuit claimed that the San Francisco-based company violated the “Founding Agreement” to operate as a non-profit business and make its technology available to the public. Instead, it has become a profit-focused entity primarily headed by its main backer, Microsoft Corp.

Such a practice was further evident with the release of GPT-4 in 2023, according to the complaint.

The suit requested OpenAI, Altman, and co-founder and President Greg Brockman to repay any profit they generated from the firm and make its technology open-source.

Musk also motioned for the public disclosure of the company’s research and the prohibition of using its assets, including GPT-4, for the financial benefit of Microsoft and other parties.

However, OpenAI immediately disputed Musk’s claims, saying they were “incoherent” and that the lawsuit was the billionaire’s attempt to progress his own AI endeavors.

In July, Musk introduced his own AI startup, xAI Corp., which completed a $6 billion Series B funding round in May, bringing its valuation to $24 billion.

There was also no solid proof of the existence of the initial agreement the firm allegedly breached, as there was no formal written contract signed by the involved parties to begin with.

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