TLDR

• Elon Musk has withdrawn his breach of contract lawsuit against OpenAI, its CEO Sam Altman, and President Greg Brockman in California state court.
• The case was dismissed without prejudice, meaning Musk could potentially file the lawsuit again in the future.
• Musk’s decision came one day before a hearing where the judge was set to consider OpenAI’s request to dismiss the case.
• In the lawsuit, Musk alleged that OpenAI deviated from its original mission to develop AI for the benefit of humanity rather than profit.
• Legal experts had previously questioned the strength of Musk’s case, noting that the “Founding Agreement” central to his claims was not a formal signed contract.

Tesla CEO Elon Musk has abruptly withdrawn his lawsuit against artificial intelligence company OpenAI, its CEO Sam Altman, and President Greg Brockman, according to court filings in the San Francisco Superior Court.

The decision to drop the breach of contract case comes just one day before a scheduled hearing where the judge was set to consider the defendants’ request to dismiss the lawsuit.

Musk originally filed the complaint in February 2024, alleging that OpenAI had strayed from its initial mission to develop AI technology for the benefit of humanity rather than for profit.

The billionaire entrepreneur, who was one of the founding members of OpenAI, claimed that the company’s collaboration with Microsoft to build artificial general intelligence (AGI) and its decision to launch ChatGPT-4 in a closed-source manner violated an early agreement among the founders.

In the 35-page complaint, Musk sought to remind the public of his role in the creation of OpenAI, which has since become one of the most prominent AI startups globally following the viral success of its ChatGPT language model.

He requested an injunction to prevent the for-profit exploitation of AGI technology and urged OpenAI to return to its open-source principles.

However, legal experts had previously cast doubt on the strength of Musk’s case, noting that the “Founding Agreement” at the heart of his claims appeared to be more of a shared understanding among early participants rather than a formal, signed contract.

OpenAI denied Musk’s allegations, stating that there was “no agreement at all” with the billionaire and suggesting that he had wanted “absolute control” of the company by merging it with Tesla.

The dismissal of the case without prejudice leaves the door open for Musk to potentially file the lawsuit again in the future.

The decision to withdraw the complaint came just a day after Musk publicly criticized OpenAI’s new partnership with Apple, which will see ChatGPT integrated into iPhone, iPad, and Mac operating systems.

Musk claimed that the move was an “unacceptable security violation” against Apple users, although the tech giant has asserted that user data will remain private and not be stored by OpenAI.

Musk’s legal action against OpenAI coincided with the launch of his own AI startup, xAI, which aims to compete with the likes of ChatGPT.

The company recently secured $6 billion in funding from prominent investors such as Andreessen Horowitz, Sequoia Capital, and Fidelity Management & Research Company. xAI’s chatbot, named Grok, has been touted as having real-time knowledge of the internet and being modeled after “The Hitchhiker’s Guide to the Galaxy.”

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