THE LAWSUIT ELON MUSK filed with grand fanfare against Sam Altman and OpenAI on Feb. 29 has ended, at least for now — not with a bang but a whimper.
Musk’s lawyers filed a four-page pre-printed form Tuesday in the Superior Court for San Francisco County, voluntarily dismissing the case “without prejudice,” meaning that the case may be filed again, either in the same court or elsewhere.
The dismissal came on the eve of a hearing in which the defendants sought to dismiss the lawsuit based on their contention that the so-called “Founding Agreement” — that is, the contract that was the basis for Musk’s suit — was “make believe.”
Defendants argued that Musk hadn’t shown that there was any contract at all — written, oral, or implied — that supported his claim. They said, “Musk cannot bring suit on an agreement that he cannot even plead into existence.”
The suit attracted a great deal of media attention.
Musk portrayed the case against OpenAI and its co-founder Sam Altman in somewhat grandiose terms as a fight for the future of humanity.
Musk, a co-founder with Altman of OpenAI, claimed that the founders formed the company to serve as a foil for the generative artificial intelligence or AGI being developed at Google. AGI describes artificial intelligence that is able to equal or exceed humans in virtually all areas of human endeavor.
According to Musk, the co-founders agreed that OpenAI would pursue AGI as a nonprofit corporation and make its technology available on an open source basis for the benefit of humanity.
Musk’s complaint said that under Altman’s leadership, OpenAI has veered from the humanitarian goals emblazoned in its nonprofit corporate charter. Musk portrayed the fight in grand terms — some would say grandiose — as a fight for the future of humanity.
The defendants painted a different picture. They contended that Musk’s suit was sour grapes.
Their counter-narrative described Musk as a disgruntled competitor in the AI space who was angry, not over the fate of humanity, but because Altman had blocked his plan to take control of OpenAI himself.
Unanswered questions
In light of the dismissal, it does not appear the San Francisco court will weigh in on the questions that Musk’s suit raised about the governance of OpenAI.
While Musk’s lawsuit was primarily based on a contract theory, it opened the door to the question of whether OpenAI is operating within the limitations of its charter and applicable nonprofit law.
Musk focused on the documents filed in Delaware when OpenAI Inc. was founded. Musk quoted sections of those documents that said:
• OpenAI “shall be a nonprofit corporation organized exclusively for charitable and/or educational purposes”
• The company’s purpose “is to provide funding for research, development and distribution of technology related to artificial intelligence” that “will benefit the public”
• The company “is not organized for the private gain of any person”
• Company property “is irrevocably dedicated to” such nonprofit purposes
• “The technology would be owned by the foundation and used ‘for the good of the world’”
• OpenAI “will seek to open source technology for the public benefit when applicable.”
In some instances, state law gives the attorney general responsibility for making sure that corporations with a charitable mission do not ignore their corporate purposes.
OpenAI was formed in Delaware and questions about its governance could be heard there.
However, OpenAI Inc. was also registered with the Registry of Charitable Trusts maintained by California’s Attorney General. The registration requirement, subject to some exemptions, applies to charitable corporations “holding assets for charitable purposes or doing business in the State of California …”
When the act applies, Government Code 12588 says, “The Attorney General may investigate … for the purpose of ascertaining whether or not the purposes of the corporation or trust are being carried out in accordance with the terms and provisions of the articles of incorporation or other instrument.”
California Attorney General Rob Bonta had not sought, at least according to court records, to get involved in Musk’s suit before its dismissal.
Why Musk decided to dismiss the suit is not known. Requests for comment directed to the lawyers for the parties were not immediately returned.
The post AI lawsuit stunner: Musk decides to abandon case against OpenAI on eve of court hearing appeared first on Local News Matters.