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  • Shantanu Wadhi

"The Legal Battle: Elon Musk's Company Lawsuit Against Open AI's"

Updated: May 11

Shantanu Wadhi

DES Shri Navalmal Firodia Law College

From Collaborators to Adversaries: The Evolution of the Musk-Altman Relationship Culminates in a Contentious Legal Clash over the Future of AI.

Elon Musk vs Open AI - Why has the largest AI Company being Sued

OpenAI: From non-profit to capped profit[1]

OpenAI's story is like a warning about balancing big dreams with the reality of paying for cutting-edge AI research. Started in 2015 by Elon Musk and others, OpenAI had a noble goal: to make sure AI helped people instead of hurting them. They chose to share their research openly so experts worldwide could work together and spot any problems before AI got too powerful.

But in 2017, they hit a roadblock. Pushing the limits of AI turned out to be really expensive. Training advanced AI models needed a ton of computing power, which cost a fortune. Despite fundraising efforts, OpenAI couldn't keep up with the bills.

In 2019, they tried a fix: a subsidiary that could take investments, but with a catch – profits would go back into research. It was meant to help financially while sticking to their goal of making AI safe and helpful. But not everyone was convinced.

There were concerns that the pursuit of profits could result in research shortcuts or risk concealment. They were concerned that OpenAI would stop being transparent about their work and start prioritising profit over serving the public interest.

The struggle to strike a balance between openness and profitability is exemplified by OpenAI's journey. Although they maintain that their innovative research is made possible by their partnership with Microsoft, which was established through the subsidiary, Elon Musk's lawsuit raises concerns about confidentiality and prioritising profits over safety. There's a lot of discussion around how to ensure AI benefits without compromising security or transparency. The resolution of this legal battle will impact not only OpenAI's future but also how each of us uses the potent technology of artificial intelligence.

The Start of the Problem (Board change)[2]

A major concern is the changes to OpenAI's board. Initially, the board was meant to ensure that OpenAI stayed on course and met its objectives. It was composed of various individuals to verify and balance choices. However, it appears that they are departing from this arrangement, which is not favourable.

A separate board functions similarly to a referee in a sporting event. They ensure that the decisions taken by the leaders serve the greater good rather than just their own interests or short-term gains. This type of board is necessary to hold OpenAI more accountable.

When Elon Musk left the board of OpenAI in 2018, there was discussion about it. Some claimed he was dissatisfied with OpenAI's performance in comparison to DeepMind and other companies. Rumours even circulated that Musk desired more authority to mould OpenAI in his image. He also stopped lending them money. The presence of an impartial board is crucial. They ensure that, in the face of adversity, OpenAI remains faithful to its mission. It would be like playing a game without rules without them.

Concerns by Elon Musk

OpenAI is being sued by Elon Musk, and there are many concerns surrounding this. He feels that OpenAI's partnership with Microsoft is a step backwards in terms of transparent research sharing, so he is not happy about it. He thinks that the best way to ensure AI is safe before it becomes too powerful is to conduct open-source research, where anyone can review and enhance each other's work. Musk worries that rather than ensuring AI is safe for everyone, OpenAI's new partnership with Microsoft may make it less transparent and more centred on generating revenue.

Musk is also concerned that OpenAI may disregard security issues in its pursuit of profits. He worries that in an effort to make quick money, they might rush research or overlook risks. This might endanger everyone and contradict the goal of OpenAI, which is to create AI that benefits rather than hurts people.

Transparency is one of Musk's other main concerns. He believes that people will completely lose faith in artificial intelligence if they don't comprehend what OpenAI is doing and why. Gaining support for developing AI in a responsible and safe manner is difficult without trust.

The lawsuit discusses control as well. Musk believes that Microsoft may have too much influence over the direction of research because of their large financial investment in OpenAI. He fears Microsoft may advocate for research that benefits the company financially, even if it poses a risk to others.

In other words, there is more to Musk's lawsuit than money. It concerns divergent opinions about the best way to develop AI. He is concerned that OpenAI is prioritising profits over being transparent, safe, and helpful. The resolution of this lawsuit will demonstrate our views on the development and application of AI going forward.

Possible Way Ahead

The outcome of the court case involving Elon Musk and Open AI will have a significant impact on the company's future. Should the judge find in favour of Musk, Open AI may need to adjust its revenue model. This can entail having another conversation to clarify matters with Microsoft or possibly breaking off their collaboration. In addition, Open AI may need to discover new revenue streams that align with their original goal of publicly disseminating research findings. They might search for donations, grants, or a combination of the two.

Another possibility is that Open AI and Musk find a middle ground. Open AI might promise to share more about their research to ease worries about being too secretive. They could start a board to watch over their research or make more projects open to everyone. This compromise could help Open AI keep Microsoft's support while showing everyone they're still open about what they're doing.

Whatever happens, this lawsuit will affect AI research as a whole. Other groups watching might rethink how they get money and how open they are about their work. This could lead to stricter rules for making AI, which might slow things down a bit. It's important for everyone involved to work together and talk openly to tackle the tough questions AI brings up.

Ensuring AI benefits people rather than harms them remains the primary objective. The court's ruling will indicate our future course. Will cooperation and transparency take precedence over safety concerns, or will our desire to be the best take precedence? It's significant for both Open AI and the direction that AI research will go. We must ensure that AI is secure and beneficial for all people, both now and in the future.


In summary, Open AI's journey from a hopeful non-profit to a profit-capped organization reflects the tough challenges of making AI safe and helpful. Elon Musk's lawsuit shows the struggle between making money, being open about research, and keeping things safe.

The court's decision will affect not just Open AI but how everyone deals with AI. No matter what happens, it's important for researchers, policymakers, and the public to talk openly about AI's tricky ethical and safety issues.

The main goal is still the same: making sure AI helps people now and in the future. We need to find a way to be innovative while also making sure AI is used responsibly. That's the key to making a better world for everyone.


[1] Nick Robins, The feud between Elon Musk and Sam Altman – explained, (Mar. 28, 2024, 3:00 PM),

[2] Anthony Derosa, No one man should have all that power, 29, 2024, 6:00 PM),

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