To beat Altman in court, Musk offers to give all damages to Open AI nonprofit - Ars Technica

Overview

To beat Altman in court, Musk offers to give all damages to Open AI nonprofit

Musk won’t seek a “single dollar” in Open AI suit after asking to pocket up to $134 billion.

Details

On Tuesday, Elon Musk amended his lawsuit that accuses Open AI and its CEO, Sam Altman, of abandoning its mission, clarifying that any ill-gotten gains recovered should be returned to the AI firm’s charitable nonprofit arm, not to Musk.

Musk “is not seeking a single dollar for himself,” according to his lawyer, Marc Toberoff.

Toberoff told The Wall Street Journal that the new remedies that Musk is seeking strip away distracting claims from Open AI that the lawsuit is intended to harass and harm the AI firm that Musk helped co-found but today is one of his biggest rivals.

“He is asking the court to return everything that was taken from a public charity—and to make sure the people responsible are never in a position to do this again,” Toberoff told the WSJ. “That was the essence of his complaint from the outset of this case, until Open AI’s spin doctors got to work distorting it. This filing sets the record straight.”

However, Musk’s pivot comes after US District Judge Yvonne Gonzalez Rogers issued an order that risked severely limiting the remedies Musk could seek in the lawsuit if he didn’t change his strategy.

A week prior to Musk’s filing, the judge denied Musk’s request for punitive damages. She also agreed with defendants that Musk’s expert—who calculated that Open AI and Microsoft’s wrongful gains from Musk’s early donation of

It seems clear from Gonzalez Rogers’ order that Musk realized he needed to change his damages claims to keep the lawsuit alive. She also denied his request to instruct the jury about his theory that his damages “accrued every time Defendants used the fruits of Musk’s contributions to pursue purposes other than the charitable purposes for which those contributions were given.”

“That is not the law,” the judge wrote, noting that such a theory would allow a charitable donor like Musk to sue at basically any time, without limitations. “Accordingly, the Court will not instruct the jury on continuous accrual.”

In his latest filing, Musk tries to recover from the order, arguing that he’s changing the remedies so late in the game in order to ensure that the trial “remains focused” on “critical remedies.”

“The remedies Musk intends to seek are strictly tied to his purpose in bringing this lawsuit: to prevent the subordination of a public charity—one he co-founded and for which he was the primary supporter during its formative years—to private, for-profit interests,” the filing said.

Musk continues to accuse Altman, Greg Brockman, and other defendants of making false promises when soliciting “donations, labor, and public goodwill under solemn promises that Open AI would operate as a nonprofit for the benefit of humanity.”

Their true goal, Musk has alleged, was to convert those assets “into a wealth machine for themselves, Microsoft, and Silicon Valley insiders.” (Musk is not alone in drawing such conclusions; his lawsuit was cited in a recent New Yorker investigation into Altman’s trustworthiness.)

To forever unplug Altman’s alleged “wealth machine,” Musk is suing to return profits to the charity, unseat Altman from the board and the company, and “unwind Open AI’s for-profit conversion and restructuring,” so that Open AI permanently stays a nonprofit charity.

Whether the jury’s ruling will be impacted by Musk’s efforts to update the remedies being sought will soon be tested, as the trial is expected to start this month.

His filing said that Open AI’s alleged “breach of charitable trust, fraud, and unjust enrichment” is “at the heart of this case,” but for the extreme remedies he seeks, his argument seems somewhat weak and untested.

To justify the remedies, Musk points to California law, which, he said, “is clear that courts have broad equitable authority to remedy exactly this kind of misconduct.” But his lawyer placed emphasis on the part of the statute that says that “a plaintiff with standing may bring an action to ‘enjoin, correct, obtain damages for or to otherwise remedy a breach of a charitable trust.” Most likely it will be up to a jury to interpret the vague statute and determine if returning ill-gotten gains in the amounts calculated by Musk’s expert is an appropriate remedy.

If Musk wins, Open AI could be permanently barred from any “future product release, capital raise, or corporate transaction” that runs afoul of its initial promise to remain a public-benefit nonprofit, his filing said. Altman and Brockman could also be ordered to step down as officers of the for-profit company and disgorge any unlawful personal financial benefits that they received.

“Those proceeds belong to the charity, not to its faithless stewards,” Musk’s filing alleged.

Most of all, Musk wants “an order unwinding the for-profit conversion and restructuring as a purported public benefit corporation, restoring Open AI to the role of a bona fide public charity that operates as the nonprofit it was intended to be, consistent with its founding charter and mission.”

On X, Open AI’s newsroom accused Musk of lodging a “court filing pretending to change his tune about attacking the nonprofit Open AI Foundation.”

“The truth is that this case has always been about Elon generating more power and more money for what he wants,” Open AI’s post said. “Having increasingly realized that his attempt to damage the nonprofit Open AI Foundation rests on a baseless legal case, Elon is once again trying to change the narrative and save face as the trial approaches. His lawsuit remains nothing more than a harassment campaign that’s driven by ego, jealousy, and a desire to slow down a competitor.”

Unsurprisingly, Musk also acknowledged the new filing on X. Reposting a Grok-generated comic that showed Musk blocking Altman from stealing money bags under a glass museum case, Musk wrote, “Yes.”

In his filing, he argued the updated remedies “are even more appropriate here, where the public interest is not merely a background policy concern but the very purpose that gave the charity its legal existence.”

“Any assets obtained at the charity’s expense belong to the Open AI charity and must be returned to it,” Musk’s filing said, insisting that Musk “does not and will not seek these funds for himself.”

To “remove doubts” of his motives, he instead “seeks their return to the charitable trust that was breached.”

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Key Takeaways

• To beat Altman in court, Musk offers to give all damages to Open AI nonprofit

• Musk won’t seek a “single dollar” in Open AI suit after asking to pocket up to $134 billion

• On Tuesday, Elon Musk amended his lawsuit that accuses Open AI and its CEO, Sam Altman, of abandoning its mission, clarifying that any ill-gotten gains recovered should be returned to the AI firm’s charitable nonprofit arm, not to Musk

• Musk “is not seeking a single dollar for himself,” according to his lawyer, Marc Toberoff

• Toberoff told The Wall Street Journal that the new remedies that Musk is seeking strip away distracting claims from Open AI that the lawsuit is intended to harass and harm the AI firm that Musk helped co-found but today is one of his biggest rivals