The battle between Elon Musk and Sam Altman is one of the true dramas of the modern tech world. However, the story has just taken a major twist – one that some observers describe as a “U-turn.” Abruptly – and seemingly without reason – Musk has decided to drop his lawsuit against OpenAI. The move came out of nowhere. Observers note that in the days leading up to this announcement, Elon had been posting up a storm on his X platform – making his hatred of OpenAI clear to the public. What exactly happened with Elon’s OpenAI lawsuit? What does this say about the future of ChatGPT, and could this apparent legal victory pave the way for more widespread AI implementation?

Why Did Elon Musk Sue OpenAI and Sam Altman in the First Place?

Essentially, Elon Musk accused Sam Altman of violating the founding agreement of OpenAI. In this agreement, Musk claims that Sam agreed only to develop AI for the “good of humanity.” The lawsuit revolved around the claim that Sam abandoned this guiding principle and instead pursued profit-driven motives. Many people forget that Musk and Altman actually founded OpenAI together back in 2015.

However, both tech gurus started to argue over the direction of the company, and Musk eventually abandoned the project. However, some say that he attempted to overthrow Altman as the new CEO before stepping down from the board.

Specifically, Musk was suing Open AI for breach of contract, breach of fiduciary duty, and unfair business practices. However, some say that the real reason Musk sued OpenAI has more to do with Microsoft’s increasing involvement in the company. After investing heavily in OpenAI, Microsoft attempted to pressure the board into firing Altman. Although this move was initially successful, a major pushback from OpenAI employees forced them to reverse the decision. Musk said that this amounts to an internal “coup,” causing the company to be run exclusively by Altman and Microsoft. This, he argued, paved the way for a purely profit-driven exploitation of AI technology.

There are many other details to consider, including questions about who decides when ChatGPT meets the definition of an “Artificial General Intelligence.” Once this threshold is met, Microsoft can no longer profit from its use. However, these details are somewhat meaningless now that Musk has dropped his lawsuit.

Why Did Musk Drop His Lawsuit Against OpenAI?

Elon Musk did not give a specific reason for dropping his lawsuit against OpenAI, but there are many theories. Some observers say that Musk had no other choice but to give up after OpenAI published some of his emails in a blog post. These emails seem to indicate that Musk was also willing to explore the profit potential of AI. If these emails are legitimate, they suggest that Altman was not the only one violating the founding agreement – and that the leaders were all considering how to earn revenue from the software.

Other observers have pointed to a string of recent X posts made by Musk. These posts attack OpenAI’s new deal with Apple, a deal that would integrate ChatGPT into Siri. Musk highlighted significant security concerns and promised to ban all Apple devices at his workplaces. While OpenAI tends to dismiss Musk as a jealous outcast who wishes he was still involved with the company, some OpenAI employees raise similar concerns. Recently, a number of employees have left the company due to concerns about data safety and security.

According to Yahoo News, Elon Musk may not be giving up the fight against OpenAI. Instead, the report states, he could just be moving his fight out of the legal arena. Lawsuits can expose all kinds of private information, and Musk may wish to keep this information away from the public eye – especially since OpenAI has already expressed a willingness to publish his emails.

Musk may be more interested in beating OpenAI on a more familiar battleground: The business world. The tech billionaire has spent months repositioning his companies for the coming AI boom. In terms of its future goals, Tesla seems to be more focused on robotics and AI than auto manufacturing. Musk is also planning to launch his own AI company.

This company, known as “xAI,” already has a valuation of $24 billion – making it the second-most-valuable AI company behind OpenAI. This is quite an accomplishment, especially since xAI hasn’t even provided any products or services. If xAI becomes the new leader in this space and overtakes OpenAI, it may be just as sweet as a legal victory for Musk – perhaps more so.

The OpenAI Saga Provides Important Lessons for New Tech Startups

One of Musk’s major challenges when pursuing this lawsuit was the nature of the founding agreement. In short, there were serious questions as to whether it was even a legal contract. Some legal experts believe that this document is more like a private agreement between friends. In other words, it was never legally binding. It also seems to have been signed by Musk and Altman on a personal level – and it did not directly involve the business entity of OpenAI.

If Musk had through this agreement more carefully, it may have been more legally binding in court. This highlights the importance of technology lawyers for new startups – especially those engaged in new, innovative, and groundbreaking software. You never know how your software will evolve over the years, and your product may eventually lead to a completely new movement in the tech world. While it might be tempting to scrawl out a quick agreement between your co-founders, it makes more sense to draft a proper, legally binding contract with help from an experienced tech lawyer.

Find an Experienced Technology Lawyer

If you’ve been searching for an experienced technology lawyer, consider booking a consultation with John P. O’Brien. With a singular focus on technology law, we can help with virtually any tech-related legal issue imaginable. These include SaaS agreements, tech licensing, and much more. We also offer professional legal consulting services for tech startups, software companies, and anyone else who might need help. Reach out today to discuss your unique situation in more detail.