And what could be worse than the fact that the richest man in the world is suing your company (and Microsoft too) for $134 billion, an amount equal to the nominal GDP of Kenya, and more than the revenue earned by Tesla last year?
OpenAI has consistently maintained in its public statements that the lawsuit is baseless and part of a harassment campaign. Specifically, one on January 8 called the lawsuit “baseless and a part of her ongoing pattern of harassment.” On January 16, according to Bloomberg, OpenAI said, “Mr. Musk’s lawsuit is baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating that at trial,” adding, “This latest non-serious demand is solely intended to further this harassment campaign.”
If there is any basis to this latest claim, it has been filed in court at the latest on behalf of the plaintiffs in this lawsuit. The document is short and fairly clear, and deals with “Wrongful Gains,” which was supposed to be the name of ESPN’s podcast documentary about Jose Canseco.
The “ill-gotten gains” argument stems from Musk’s claim that he spent $38 million, or about 60% of the initial funding required for OpenAI to begin operating as a non-profit, and made “non-monetary contributions”, such as “bringing on key employees”, putting the founders in touch with people, mentoring them, and “providing his prestige and reputation to the venture.”
In early coverage of OpenAI, Musk came across as an important progenitor of OpenAI, who later amicably parted ways with it. For example, The New York Times wrote in 2018 that “In 2015, Elon Musk, chief executive of electric-car maker Tesla, and other well-known figures in the tech industry created OpenAI and moved it to offices just north of Silicon Valley in San Francisco,” but, “He has since resigned from the OpenAI board, with the lab saying this would allow them to ‘eliminate potential future conflict.'”
The crux of Musk’s lawsuit is that OpenAI went against its stated purpose after Musk provided funding, forcing it into the ground. It underwent a restructuring that resulted in the nonprofit becoming almost entirely a for-profit public benefit corporation – although it is still controlled to some extent by a separate nonprofit called the OpenAI Foundation.
As you no doubt know, Musk founded XAI, one of OpenAI’s main competitors, which has an estimated valuation of $230 billion, which is a little less than twice the amount he is now demanding for his OpenAI suite. According to CNBC, XAI is entirely for-profit, and while it was once a public benefit corporation, that hurdle was “secretly” dropped last year.
Musk’s total demand has not even been matched yet. According to the filing, he “also intends to seek other monetary remedies, including punitive damages, during the litigation.”
<a href