Musk & OpenAI’s legal fiasco, LinkedIn founder, Microsoft, Open AI sued, & India’s far behind judicial landscape

Billionaire tech giant Elon Musk in its lawsuit with OpenAI has now named Microsoft, Linkedin’s founder Reid Hoffman, a former Open AI Board member and Microsoft VP Dee Templeton as defendants. Musk has also increased plaintiffs in the suit by adding its biotech startup Neuralink’s executive, its AI company xAI and a former board member of OpenAI Shivon Zillis. This legal feud of Musk and Open AI is not new.

Musk and Open AI Background –

Elon Musk and Open AI are no strangers to each other since Musk was one of the initial investors in Open AI back in December 2015. Then in the year 2018 Musk left Open AI’s board because Open AI changed its status from non-profit to a capped profit organisation which left Musk’s vision unaccomplished (build AI for the world not to make money).

Eventually Musk and OpenAI parted ways and Microsoft swopped in with a $1 Billion investment. In July of 2024 Musk sued OpenAI and the suit was withdrawn within days for unsaid reasons. In the next month I.e. August the same suit was brought again. It accused Open AI of defrauding Musk in the amount of $44 Million as an investor when it changed its status to capped profit.

Recent Developments -

An amended file has been put on record where Microsoft, Linkedin’s founder, a former Open AI board member and a Microsoft VP have been named defendants. The plaintiffs have also increased since Musk’s biotech venture Neuralink, his AI venture xAI have been named plaintiffs. In a recent complaint filed Musk has also accused Open AI of entering into monopolistic practices to take over the Generative AI Market and specifically blocked xAI’s funding. “Microsoft and OpenAI, apparently unsatisfied with their monopoly, or near so, in generative artificial intelligence ("AI") are now actively trying to eliminate competitors, such as xAI, by extracting promises from investors not to fund them” said Musk’s lawyer.

Email Mania -

Some emails have been put in public light during the discovery process in Musk vs Altman trial. These mails which portray the power struggle between Musk and Microsoft and portray how Open AI dangled between being a nonprofit AI company or ruling the Gen AI world. One of these mails show Altman, OpenAI’s co-founder asking/convincing Musk for investing in OpenAI. One of such mail is portrayed below –

Altman to Musk

Been thinking a lot about whether it's possible to stop humanity from developing AI.I think the answer is almost definitely not.If it's going to happen anyway, it seems like it would be good for someone other than Google to do it first. Any thoughts on whether it would be good for YC to start a Manhattan Project for AI? My sense is we could get many of the top ~50 to work on it, and we could structure it so that the tech belongs to the world via nonprofit but the people working on it get startup-like compensation if it works. Obviously we'd comply with/aggressively support all regulation.

Musk to Altman

Worth a conversation

Next set of mails that came to light portrayed the dispute over OpenAI’s Microsoft deal. They show how Musk was scared if Microsoft would partner with OpenAI then they would turn OpenAI into a marketing pawn.

“You will be Microsoft’s marketing b1tch”

Another set of mails show the power feud between Musk and other co-founders of Open AI Greg Brockman and Ilya Sutskever. Mails show tention about ‘unilateral absolute control’ of AI technology emerged, as well as about Altman's leadership and his goals with the OpenAI.

Ilya to Musk

The current structure provides you with a path where you end up with unilateral absolute control over the AGI [artificial general intelligence]. You stated that you don’t want to control the final AGI, but during this negotiation, you’ve shown to us that absolute control is extremely important to you.

As an example, you said that you needed to be CEO of the new company so that everyone will know that you are the one who is in charge, even though you also stated that you hate being CEO and would much rather not be CEO.

Thus, we are concerned that as the company makes genuine progress towards AGI, you will choose to retain your absolute control of the company despite current intent to the contrary.

The goal of OpenAI is to make the future good and to avoid an AGI dictatorship. You are concerned that Demis [Hassabis, at Google-owned DeepMind] could create an AGI dictatorship. So do we. So it is a bad idea to create a structure where you could become a dictator if you chose to, especially given that we can create some other structure that avoids this possibility

Musk to Ilya

We haven’t been able to fully trust your judgements throughout this process, because we don’t understand your cost function.

We don’t understand why the CEO title is so important to you. Your stated reasons have changed, and it’s hard to really understand what’s driving it.

Is AGI truly your primary motivation? How does it connect to your political goals?

Musk’s allegations on LinkedIn Founder and Microsoft –

-       Musk and team have alleged that Templeton, former board member of Open AI, was able to facilitate a deal with Microsoft and Open AI that would violate antitrust rules.

-       Hoffman, founder of Linkedin who was both on the board of Microsoft and Open AI invested in a different rival company and gave up Open AI’s company secrets.

-       It has been alleged that Open AI constitutes to 70% of the Gen AI market and it constitutes a monopoly

Musk and Altman’s legal fiasco is shaking up the Silicon Valley. Open AI has largely been silent to Musk’s attacks. Some say Musk is using this suit to get back at Open AI since he regrets leaving the company, while some experts do not agree. The trial is pending in the California Court and the world awaits to see what will unfold next.

On a lighter note –

It is well known to the world that States (US) is home to biggest corporate rivalries, litigations between companies with millions as fine, high profile anti-trust lawsuits and large class action suits. India on the other hand is still dangling with its large backlog problems and . India’s judicial landscape is far behind the world. The main reason this is the cost that Indians don’t want to spend on litigation. There is also a huge lack of awareness that has to be dealt with. Even today majority of the cases in Indian courts are filed by individuals. Majority of companies in India prefer out of court settlements merely because companies do not want to spend so much time and resources on long litigations. All of this has to be addressed to take India’s legal landscape to the next level