I have not paid attention to the current lawsuit brought by Elon Musk against OpenAI and its now private shareholders. I rather cavalierly dismissed it as an expression of egomania on the part of two very smart and driven men facing off against one another.
But an article on the trial caused me to rethink and conclude that this litigation was brought by Musk to champion moral capitalism.
The importance of the moral issue of taking responsibility for development and deployment of product and technology has just been given deep theological and philosophical importance by Pope Leo XIV in his new encyclical on AI.
Both Pope Leo and Elon Musk worried about the consequences for humanity of machine thinking – a new technology. Economists call such consequences “externalities” of a product or a service – what does the product or service cause to happen? Usually, the concern is about price. Does the price charged for a good or service include the costs to users, society, the community and the environment of any negative effects brought about by that product or service? Here is the issue of who should pay for the costs of pollution?
Thus, to have the work of developing AI, Musk thought of using what some call a “benefit corporation,” where the ability of owners to place profit above all other considerations is restrained. The purpose of the entity must be to generate benefits for specified stakeholders. Musk chose the form of a non-profit corporation. Money was raised and staff were hired. Later, the CEO, Sam Altman, working with Microsoft, took the capital of the non-profit and moved it to a for-profit company.
Musk sued for breach of contract and specific performance of the original contract provision to benefit humanity and not owners.
Here are relevant excepts from Musk’s complaint:
Mr. Musk has long recognized that artificial general intelligence (AGI) poses a grave threat to humanity – perhaps the greatest existential threat we face today. His concerns mirrored those raised before him by luminaries like Stephen Hawking and Sun Microsystems founder Bill Joy. Our entire economy is based around the fact that humans work together and come up with the best solutions to a hard task. If a machine can solve nearly any task better than we can, that machine becomes more economically useful than we are. As Mr. Joy warned, with strong AGI, “the future doesn’t need us.” …
With the DeepMind team, Google immediately catapulted to the front of the race for AGI. Mr. Musk was deeply troubled by this development. He believed (and still does) that in the hands of a closed, for-profit company like Google, AGI poses a particularly acute and noxious danger to humanity. In 2014, it was already difficult enough to compete with Google in its core businesses. Google had collected a uniquely large set of data from our searches, our emails and nearly every book in our libraries. Nevertheless, up to this point, everyone had the potential to compete with Google through superior human intelligence and hard work. AGI would make competition nearly impossible. …
The Founding Agreement of OpenAI, Inc.
Mr. Altman purported to share Mr. Musk’s concerns over the threat posed by AGI. In 2015, Mr. Altman wrote that the “development of superhuman machine intelligence (SMI) is probably the greatest threat to the continued existence of humanity. There are other threats that I think are more certain to happen . . . but are unlikely to destroy every human in the universe in the way that SMI could.” Later that same year, Mr. Altman approached Mr. Musk with a proposal: that they join forces to form a non-profit AI lab that would try to catch up to Google in the race for AGI, but it would be the opposite of Google. …
Together with Mr. Brockman, the three agreed that this new lab: (a) would be a non-profit developing AGI for the benefit of humanity, not for a for-profit company seeking to maximize shareholder profits and (b) would be open-source, balancing only countervailing safety considerations and would not keep its technology closed and secret for proprietary commercial reasons (the “founding agreement”). Reflecting the founding agreement, Mr. Musk named this new AI lab “OpenAI,” which would compete with and serve as a vital counterbalance to Google/DeepMind in the race for AGI, but would do so to benefit humanity, not the shareholders of a private, for-profit company (much less one of the largest technology companies in the world). …
The founding agreement was also memorialized, among other places, in OpenAI, Inc.’s December 8, 2015, certificate of incorporation, which affirmed that its “resulting technology will benefit the public and the corporation will seek to open-source technology for the public benefit when applicable. The corporation is not organized for the private gain of any person.” The certificate of incorporation further affirmed that all of the corporation’s property was “irrevocably dedicated” to these agreed purposes. …
Mr. Altman became OpenAI, Inc.’s CEO in 2019. On September 22, 2020, OpenAI entered into an agreement with Microsoft, exclusively licensing to Microsoft its Generative PreTrained Transformer (GPT)-3 language model. However, OpenAI published a detailed paper describing the internals and training data for GPT-3, enabling the community to create similar models themselves. And most critically, the Microsoft license only applied to OpenAI’s pre-AGI technology. Microsoft obtained no rights to AGI. It was up to OpenAI, Inc.’s non-profit board, not Microsoft, to determine when OpenAI attained AGI. …
In 2023, defendants Mr. Altman, Mr. Brockman and OpenAI set the founding agreement aflame. In March 2023, OpenAI released its most powerful language model yet, GPT-4. GPT-4 is not just capable of reasoning. It is better at reasoning than average humans. It scored in the 90thpercentile on the Uniform Bar Exam for lawyers. It scored in the 99th percentile on the GRE Verbal Assessment. It even scored a 77% on the Advanced Sommelier examination. At this time, Mr. Altman caused OpenAI to radically depart from its original mission and historical practice of making its technology and knowledge available to the public. GPT-4’s internal design was kept and remains a complete secret except to OpenAI – and on information and belief, Microsoft. There are no scientific publications describing the design of GPT-4. Instead, there are just press releases bragging about performance. On information and belief, this secrecy is primarily driven by commercial considerations, not safety. Although developed by OpenAI using contributions from plaintiff and others that were intended to benefit the public, GPT-4 is now a de facto Microsoft proprietary algorithm, which it has integrated into its Office software suite. …
Furthermore, on information and belief, GPT-4 is an AGI algorithm and hence, expressly outside the scope of Microsoft’s September 2020 exclusive license with OpenAI. …
A board coup took place in November 2023. On November 17, 2023, OpenAI, Inc.’s board fired Mr. Altman after losing “confidence in his ability to continue leading OpenAI” because “he was not consistently candid with the board.” In a series of stunning developments spanning the next several days, Mr. Altman and Mr. Brockman, in concert with Microsoft, exploited Microsoft’s significant leverage over OpenAI, Inc. and forced the resignation of a majority of OpenAI, Inc.’s board members, including Chief Scientist Ilya Sutskever. Mr. Altman was reinstated as CEO of OpenAI, Inc. on November 21. On information and belief, the new board members were hand-picked by Mr. Altman and blessed by Microsoft. …
This case is filed to compel OpenAI to adhere to the founding agreement and return to its mission to develop AGI for the benefit of humanity, not to personally benefit the individual defendants and the largest technology company in the world.
November 2023 To Present: Altman’s OpenAI
The public is still in the dark regarding what exactly the board’s “deliberative review process” revealed that resulted in the initial firing of Mr. Altman. However, one thing is clear to Mr. Musk and the public at large: OpenAI has abandoned its “irrevocable” non-profit mission in the pursuit of profit. Numerous leaders and intellectuals have publicly commented on the irony and tragedy of OpenAI becoming “Closed, For-Profit AI.” …
Defendants have breached the founding agreement in multiple separate ways, including at least by:
Failing to disclose to the public, among other things, details on GPT-4’s architecture, hardware, training method and training computation and further by erecting a “paywall” between the public and GPT-4, requiring per-token payment for usage, in order to advance defendants and Microsoft’s own private commercial interests, despite agreeing that OpenAI’s technology would be open-source, balancing only countervailing safety considerations.
Wherefore, plaintiff prays for judgment against defendants as follows: for an order compelling specific performance of defendants’ repeated contractual promises including, without limitation, an order requiring that defendants continue to follow OpenAI’s longstanding practice of making AI research and technology developed at OpenAI available to the public and an order prohibiting defendants from utilizing OpenAI, Inc. or its assets for the financial benefit of the individual defendants, Microsoft or any other particular person or entity.
May the good guys win and moral capitalism be vindicated by law!