Elon Musk Drops Lawsuit Against OpenAI One Day Before Hearing

Elon Musk reportedly dropped his lawsuit against OpenAI and two of its co-founders, Sam Altman and Greg Brockman, on Tuesday (June 11).

Musk made this move one day before the case was to go before a judge who would consider the defendants’ request that it be dismissed, CNBC reported Tuesday, citing a court filing.

When Musk withdrew it, the case was dismissed without prejudice, according to the report.

Musk filed the lawsuit in February, alleging breach of contract and fiduciary duty and saying that OpenAI had committed to developing artificial general intelligence (AGI) “for the benefit of humanity” but later transformed into a for-profit entity, the report said.

Legal experts told CNBC that the contract pointed to in the lawsuit was not a formal agreement signed by all parties involved, so the case had a questionable foundation.

Musk helped start OpenAI in 2015 but left the board in 2018. He said in the lawsuit that Altman and Brockman had asked him to help create a nonprofit dedicated to developing AGI to benefit humanity.

The lawsuit highlighted that Musk played a pivotal role in founding OpenAI and was its primary financier during the initial phase. After Musk distanced himself from OpenAI in 2018, Microsoft became the largest investor in the company.

“To this day, OpenAI, Inc.’s website continues to profess that its charter is to ensure that AGI ‘benefits all of humanity,’” Musk’s lawsuit said. “In reality, however, OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft.”

In March, OpenAI said it planned to move to dismiss the lawsuit, adding that it remains committed to a mission to “ensure AGI benefits all of humanity.”

OpenAI said at the time that it realized AGI will require “far more resources than we’d originally imagined,” that the company and Musk agreed in 2017 that a for-profit entity would be necessary to acquire those resources, and that OpenAI advances its mission by building beneficial tools that are widely available.

Musk announced the formation of his own AI company, xAI, in July 2023, saying the firm aims to “understand reality.”

The firm said on its website: “The goal of xAI is to understand the true nature of the universe.”