‘I’m a fool essentially providing free funding to OpenAI,’ Elon Musk once told Sam Altman
Billionaire entrepreneur Elon Musk, co-founder of OpenAI, has filed an amended lawsuit against the AI organisation and its CEO, Sam Altman. The lawsuit, filed in a US court, alleges that OpenAI abandoned its original non-profit ideals, a move that Musk claims goes against the founding principles of the organisation.
The lawsuit highlights email exchanges between Musk and OpenAI leadership, revealing years of internal tensions over funding and organisational direction.
Musk, who was OpenAI’s largest financial backer during its early years, contributed over $44 million in cash alone between 2016 and 2020, according to the lawsuit. These contributions were critical to OpenAI’s establishment and growth.
“Without Musk’s involvement, backing, and substantial supportive efforts, there would have been no OpenAI,” the lawsuit states. In addition to cash funding, Musk reportedly leased office space to OpenAI in San Francisco and covered monthly overhead expenses, even after stepping down from its board in February 2018.
In September 2016, OpenAI’s leadership, including Altman, struck a deal with Microsoft for discounted compute services. However, Musk rejected the initial proposal, which required OpenAI to promote Microsoft’s products publicly.
“This actually made me feel nauseous. It sucks and is exactly what I would expect from them,” Musk wrote in an email to Altman, expressing his disapproval. The deal was later renegotiated without the promotional clause but still provided discounted rates for OpenAI’s compute needs.
A critical point of contention arose in 2017 when Altman and Greg Brockman, OpenAI’s co-founder, proposed transitioning the organisation into a for-profit entity. The goal was to attract shareholders, raise capital, and sell equity—a move Musk opposed.
In a September 2017 email exchange, Musk expressed his frustration, writing: “Either go do something on your own or continue with OpenAI as a non-profit. I will no longer fund OpenAI until you have made a firm commitment to stay or I’m just being a fool who is essentially providing free funding to a start-up. Discussions are over.”
Musk’s lawsuit argues that the shift to a for-profit model has compromised OpenAI’s mission to ensure that artificial intelligence remains a broadly accessible and beneficial technology.
Musk also raised concerns about the monopolisation of AI technologies, writing, “The wise course of action is to approach the advent of AI with caution and ensure that its power is widely distributed and not controlled by any one company or person. That is why we created OpenAI.”
The lawsuit accuses OpenAI and Microsoft of monopolising the generative AI market and abandoning their original commitments. Musk is seeking to void OpenAI’s licensing agreements with Microsoft and recover what he calls “ill-gotten gains.”
