OpenAI publishes blog post claiming that 'Elon Musk was trying to turn OpenAI into a commercial entity'
Elon Musk, the owner of X and a co-founder and former director of OpenAI, has filed an antitrust lawsuit against OpenAI and its executives and former executives, and has also sought an injunction to block OpenAI from becoming a commercial company. In response, OpenAI argued in a blog post that Musk had previously sought to transform OpenAI, a non-profit organization, into a for-profit entity.
Elon Musk wanted an OpenAI for-profit | OpenAI
OpenAI fires back against Musk, claims he wanted an OpenAI for-profit | TechCrunch
OpenAI was founded in 2015 as a non-profit research organization called OpenAI Inc., and later established a for-profit subsidiary called OpenAI Global LLC in 2019 to cover the large costs required for AI model development. The for-profit corporation OpenAI Global LCC is owned by the non-profit corporation OpenAI Inc., and the non-profit board of directors fully manages the for-profit division. However, it has been reported that OpenAI plans to transition to a for-profit public interest corporation in September 2024 due to fundraising and other reasons.
OpenAI may turn into a for-profit organization, CEO Sam Altman reportedly in negotiations to acquire 7% of all shares - GIGAZINE
In response, Musk sued OpenAI, its CEO Sam Altman, president Greg Brockman, former director Reid Hoffman, former director and Microsoft vice president Dee Templeton, Microsoft, and others for antitrust violations. Musk's side argued that 'OpenAI should be prohibited from profiting from competitive confidential information obtained through its ties with Microsoft and from adjustments at the board of directors,' and asked the court for an injunction to stop OpenAI from becoming a commercial company. In addition, Musk criticized OpenAI in the trial for abandoning its original purpose of making the results of AI research available to everyone.
Elon Musk files for court injunction to block commercialization of OpenAI - GIGAZINE
In response to the lawsuit, OpenAI commented, 'This is Musk's fourth lawsuit. He continues to make the same meritless claims, which are again without merit.'
Furthermore, OpenAI reported in its blog that Musk had previously been pushing for OpenAI to become a commercial company. According to OpenAI, from the beginning of OpenAI's launch as a non-profit organization in 2015, Musk had questioned the way OpenAI should be a non-profit organization, saying, 'OpenAI's structure does not seem optimal. We should set up a non-profit organization in parallel with the for-profit company.'
Then, in 2017, when it became clear that OpenAI's plans to build artificial general intelligence (AGI) would require billions of dollars in funding, OpenAI executives and Musk agreed that in order to move forward with the plan, OpenAI needed to become a commercial company.
Musk then requested that OpenAI executives hold a majority stake in the company and that he serve as CEO of OpenAI when it becomes a commercial company. In September 2017, he applied to the state of Delaware to establish a public interest corporation called Open Artificial Intelligence Technologies, Inc., which was approved on September 17 of the same year.
However, OpenAI told Musk, 'We really want to work with you. If we work together, we will maximize the chances of the mission's success,' and added, 'As OpenAI continues to make progress toward AGI, we are concerned that Musk's absolute control of the company conflicts with OpenAI's policy that AGI should not be in the hands of dictators.' In addition, Altman insisted, 'We will continue to run OpenAI as a non-profit organization.'
In response, Musk said, 'The discussion is over,' and negotiations with OpenAI broke down. After that, in February 2018, Musk resigned from OpenAI's board of directors. Also, just before resigning, Musk said, 'OpenAI's AI development is lagging behind Google, and the only way to catch up is for OpenAI to merge with Tesla and get abundant funds.' However, Brockman said, 'Our goals and mission should not be wrong. The development of the best AGI will come from the growth of OpenAI alone,' rejecting Musk's proposal.
With the resignation of Mr. Musk, who had provided OpenAI with abundant funding, the company fell into a serious shortage of funds. So OpenAI established a new for-profit organization, 'OpenAI Global LLC,' to raise funds for AI development, and in 2019 received $1 billion (about 150 billion yen) from Microsoft, and is now thriving.
In contrast, Musk founded an AI company called xAI in 2023, and in a 2024 lawsuit, he asked that OpenAI be prohibited from asking investors not to support rival companies, including xAI.
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