Musk’s OpenAI Lawsuit May Be in Peril: Experts

Estimated read time 4 min read
  • OpenAI released emails that appear to show Elon Musk agreeing to the company’s for-profit shift.
  • The emails could undermine Musk’s lawsuit against the AI venture, experts told BI.
  • “I thought he was going to lose before, but, at this point, I don’t really see a way he could win,” one expert said.

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Elon Musk may have thrown the first punch against OpenAI with his lawsuit against the company he helped create.

But OpenAI’s receipts-filled response could prove to be a major blow to Musk’s legal fight, experts say.

The AI company on Tuesday released a slew of emails that it claims were sent between Musk and its other founders. The emails appear to show Musk might not have been entirely transparent in his attack on OpenAI.

Business Insider was unable to independently verify the authenticity of the emails, which were partially redacted.

“OpenAI should be renamed ‘super closed source for maximum profit AI,’ because this is what it actually is,” Musk said in an apparent dig at the company last year during an interview.

But while Musk has been saying in public (and in his lawsuit) that he hadn’t agreed to OpenAI developing a for-profit arm or moving away from open-sourced data when he helped found the company, behind closed doors Musk appears to not only have agreed with the move, but even pushed for OpenAI to pivot toward a for-profit revenue stream. In 2018, Musk even forwarded an email suggesting OpenAI should “attach to Tesla as its cash cow,” according to the document.

“My probability assessment of OpenAI being relevant to DeepMind/Google without a dramatic change in execution and resources is 0%. Not 1%. I wish it were otherwise,” Musk wrote in one email to OpenAI’s cofounders in 2018, according to the company’s release.

The emails likely spell even more trouble for Musk’s lawsuit.

‘I don’t really see a way he could win’

The juicy clapback from OpenAI is just one of many reasons Musk will likely struggle to get his lawsuit past a motion to dismiss, experts say.

“I thought he was going to lose before, but, at this point, I don’t really see a way he could win,” Samuel Brunson, a nonprofit legal expert from Loyola University, told Business Insider.

The billionaire already faced an uphill battle when it came to proving his argument without a written contract. In his lawsuit, Musk argued that OpenAI strayed from its “founding agreement,” citing a handful of emails and the organization’s certificate of incorporation as the basis of the so-called contract.

“His argument is based off a handful of emails, which begs the question: Why wouldn’t these emails be counted as well?” Brunson said, pointing out both sides cherry-picked emails from around the same time periods.

It’s unlikely Musk’s case would make it past a motion to dismiss, David Hoffman, a contract law expert from the University of Pennsylvania, said. The emails would do the most damage to Musk if the case were to go to trial, which is highly unlikely, according to Hoffman.

For now, the emails serve the purpose of combatting Musk in the public court of opinion, Kyle Lawrence, a corporate and securities lawyer from Falcon Rappaport & Berkman, told BI.

“A lot of what Elon Musk was doing was trying to generate negative publicity” for OpenAI, Lawrence said. “So them releasing these emails is perfectly within their rights and it helps them create the narrative that they’d want to have going into a trial — if it gets to that.”

Meanwhile, OpenAI might still pay a price for Musk’s lawsuit in the form of lost time and resources. It follows a chaotic few months for OpenAI, which included its CEO’s ousting and quick return, a board reshuffling, as well as a series of lawsuits and an investigation by financial regulators.

“I think Musk’s lawsuit is already doing what he intended,” Hoffman said. “This is a distraction for OpenAI. They had to spend time getting this together, which is a non-mission-focused activity and probably not a good use of their time.”

Musk’s lawyers declined to comment. Musk has definitely seen the company’s response though, replying to the company on social media without addressing the contents of the emails.

“Change your name to ClosedAI and I will drop the lawsuit,” Musk wrote on X.

Musk’s lawsuit comes after the billionaire launched his own AI company last year. Musk has said he invested tens of millions of dollars into OpenAI during its founding but walked away from the company’s board in 2018.

At the time, Musk said he’d left to avoid a potential conflict of interest with Tesla and its AI efforts.