Key Events Shaping OpenAI Lawsuit by Elon Musk

Updated on March 7 2024

The artificial intelligence world has been sent into a frenzy by Elon Musk’s explosive lawsuit against OpenAI, the company he co-founded with an ambitious mission: ensuring artificial general intelligence (AGI) benefits all of humanity.

Musk’s bombshell allegations have ignited a firestorm of controversy, pitting his vision for OpenAI against the company’s transformation into a for-profit AI powerhouse, partnered with tech titan Microsoft.

However, in a scathing blog post published on March 5, 2024, OpenAI swiftly mounted a vigorous defense, accusing Musk of once seeking “absolute control” over the company by demanding “majority equity, initial board control, and to be CEO” as they discussed transitioning to a for-profit structure in late 2017.

The company alleged that Musk himself acknowledged the need for vast resources to achieve AGI, even suggesting a $1 billion funding commitment in November 2015 while admitting in December 2018 that “this needs billions per year immediately or forget it.”

To truly grasp the magnitude of this high-stakes clash, we must unpack the dramatic saga through the lens of critical events that shaped its trajectory.

OpenAI Timeline
OpenAI Timeline

Read This Story: Why Did Elon Musk Sue OpenAI and Sam Altman?

November 2015: Billion-Dollar Ambitions Revealed

In the formative days of OpenAI, Musk’s ambitions were laid bare in a revealing email to the team. Recognizing the immense challenges ahead, he stated, “We need to go with a much bigger number than $100M to avoid sounding hopeless… I think we should say that we are starting with a $1B funding commitment.” His resolve was clear: “I will cover whatever anyone else doesn’t provide.”

This bold proclamation set the stage for OpenAI’s quest, with Musk acknowledging the staggering resources required to achieve AGI. However, as co-founder Greg Brockman recalls, “In total, the non-profit has raised less than $45M from Elon and more than $90M from other donors,” falling well short of Musk’s proposed $1 billion commitment.

Late 2017: The Pivot to Profit

As the true scale of the resource requirements for achieving AGI became apparent, a pivotal decision was made – OpenAI and Musk agreed that a for-profit entity was necessary to secure the astronomical funding required. However, a rift emerged as Musk demanded “majority equity, initial board control, and to be CEO” of this new for-profit structure. When terms couldn’t be agreed upon, renowned investor Reid Hoffman stepped in to bridge the growing financial chasm, covering salaries and operations.

“We couldn’t agree to terms on a for-profit with Elon because we felt it was against the mission for any individual to have absolute control over OpenAI,” OpenAI co-founders stated, revealing the depths of the divide over control and ownership.

February 2018: The Tesla Merger Proposition


In a bold move, Musk proposed merging OpenAI into his electric vehicle juggernaut, Tesla. He argued bluntly in an email, “Tesla is the only path that could even hope to hold a candle to Google,” envisioning Tesla as OpenAI’s “cash cow” to provide the resources to compete with AI giants. However, OpenAI rebuffed the proposal, unwilling to grant any individual or entity “absolute control” over its mission.

“Even then, the probability of being a counterweight to Google is small. It just isn’t zero,” Musk conceded in the email, foreshadowing his growing doubts about OpenAI’s ability to achieve its lofty goals without a drastic change.

December 2018: Musk’s Dire Warning

Musk-Openai-Email -Exchange-Warning

As the year drew to a close, Musk issued a dire warning to OpenAI’s leadership in a candid email: “Even raising several hundred million won’t be enough. This needs billions per year immediately or forget it.” He expressed grave doubts about OpenAI’s relevance “without a dramatic change in execution and resources,” foreshadowing the rift that was to come.

“Unfortunately, humanity’s future is in the hands of [Google]… And they are doing a lot more than this,” Musk ominously cautioned, setting the stage for his eventual exit from OpenAI and the formation of a competitor within Tesla.

2019: Microsoft’s Billion-Dollar Entry

Heeding Musk’s warnings about the astronomical resource requirements, OpenAI made a transformative move – the formation of OpenAI LP, a for-profit entity designed to secure the necessary funding and computing power. This bold step, coupled with a groundbreaking $1 billion investment from Microsoft in 2019, catapulted OpenAI’s valuation to a staggering $90 billion, providing the resources to pursue its lofty AGI ambitions.

“We realized building AGI will require far more resources than we’d initially imagined,” OpenAI acknowledged, justifying the pivotal shift that would ultimately culminate in Musk’s explosive lawsuit.

29th Feb, 2024: OpenAI Lawsuit by Elon Musk

After years of simmering tensions, Musk dropped a legal bombshell, filing a lawsuit alleging that OpenAI had become “a closed-source de facto subsidiary” of Microsoft, abandoning its original nonprofit mission in pursuit of profits – a “breach of contract.” The AI world was sent into a tailspin, with Musk’s allegations striking at the heart of OpenAI’s purpose and direction.

“OpenAI has become a closed-source de facto subsidiary of Microsoft that is focused on making money instead of benefitting humanity,” Musk’s complaint stated, igniting a fierce debate over the company’s trajectory and its $13 billion partnership with the tech giant.

5th March, 2024: The Counterattack by OpenAI

OpenAI swiftly mounted a vigorous defense, claiming that Musk himself understood the need for a for-profit structure to amass the resources required for AGI. They cited a 2016 email exchange where Musk agreed to being “less open” as OpenAI neared its goal, contradicting his accusations of abandoning transparency.

“We’re sad that it’s come to this with someone whom we’ve deeply admired—someone who inspired us to aim higher, then told us we would fail, started a competitor, and then sued us when we started making meaningful progress towards OpenAI’s mission without him,” the co-founders lamented, setting the stage for a bitter legal battle.

As this high-stakes legal drama unfolds, the core issues at stake – control, funding, open-sourcing, and OpenAI’s very purpose – have come into sharp focus. The outcome of Musk’s lawsuit could redefine the landscape of AGI development, the role of for-profit entities in this critical endeavor, and the delicate balance between transparency and safety.

With billions of dollars, the future of artificial intelligence, and the wellbeing of humanity hanging in the balance, this clash between Musk’s vision and OpenAI’s current trajectory is captivating the tech world. Regardless of the legal verdict, this saga will undoubtedly shape the future trajectory of our species’ relentless pursuit of AGI.

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