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Wouldn't you have to prove damages in a lawsuit like this? What damages does Musk personally suffer if OpenAI has in fact broken their contract?

laristine 3y ago
You can sue for many reasons. For example, when a party breaks a contract, the other party can sue to compel the contract to be performed as agreed.
- otterley 3y ago
  Specific performance is a last resort. In contract law, the bias is towards making the plaintiff whole, and frequently there are many ways to accomplish that (like paying money) instead of making the defendant specifically honor the terms of the original agreement.
  - nsomaru 3y ago
    Not sure about English law but in Roman law (and derived systems as in South Africa) the emphasis is on specific performance as a first resort — the court will seek to implement the intention of the parties embodied in the contract as far as possible. Cancellation is a last resort.
    - dragonwriter 3y ago
      > Not sure about English law but in Roman law This is actually American law, neither English nor Roman. While it is derived from English common law, it has an even stronger bias against specific performance (and in fact bright-line prohibits some which would be allowed in the earlier law from which it evolved, because of the Constitutional prohibition on involuntary servitude.)
      - otterley 3y ago
        This is correct!
  - laristine 3y ago
    That's very interesting, thanks! I just learned that courts actually tend to grant monetary damages more frequently than specific performance in general. However, I have always maintained that making the plaintiff whole should bias toward specific performance. At least that's what I gathered from law classes. In many enterprise partnerships, the specific arrangements are core to the business structures. For example, Bob and Alice agreed to be partners in a millions-dollar business. Bob suddenly kicked Alice out without a valid reason, breaching the contract. Of course, Alice's main remedy should be to be back in the business, not receiving monetary damage that is not just difficult to measure, but also not in Alice's mind or best interest at all.
- aCoreyJ 3y ago
  Well Elon was forced to buy Twitter that way
  - wand3r 3y ago
    I think this is downvoted because (and I could be wrong) he could have paid a breakup fee instead of buying the business. So he wasn't compelled to actually own and operate the business.
    - colejohnson66 3y ago
      No. He couldn't back out as he had already agreed to the 44B. The breakup fee was for if the deal fell through for other reasons, such as Twitter backing out or the government blocking it. https://www.nytimes.com/2022/07/12/technology/twitter-musk-lawsuit-reasons.html https://www.nytimes.com/2022/07/12/technology/twitter-musk-l...
    - selectodude 3y ago
      You are wrong, I’m afraid. The breakup fee is reimbursement for outside factors tanking the deal. A binding agreement to buy means that if you arrange financing and the government doesn’t veto it, you’re legally obligated to close.
    - dragonwriter 3y ago
      > I think this is downvoted because (and I could be wrong) he could have paid a breakup fee instead of buying the business. No, he couldn't, the widely discussed breakup fee in the contract was a payment if the merger could not be completed for specific reasons outside of Musk’s control. It wasn’t a choice Musk was able to opt into. OTOH, IIRC, he technically wasn't forced to because he completed the transaction voluntarily during a pause in the court proceedings after it was widely viewed as clear that he would lose and be forced to complete the deal.
    - Mountain_Skies 3y ago
      It's a thread about OpenAI. Some people seem to spend their days looking for ways to make every thread about their angst over Musk purchasing Twitter and will shove it into any conversation they can without regard of its applicability to the thread's subject. Tangent conversations happen but they get tedious after a while when they're motivated by anger and the same ones pop up constantly. Yes, the thread is about Musk, that doesn't mean his taste in music should be part of the conversation any more than some additional whining about him buying Twitter should be.
boole1854 3y ago
He doesn't have access to the GPT-4 source code and data because they decided to keep that proprietary.
- cynusx 3y ago
  They will probably try to unearth that in the discovery phase
tw600040 3y ago
that AGI, instead of benefitting the whole world, in which Musk is a part of, will end up only benefitting Microsoft, which he isn't a part of?
- AlbertCory 3y ago
  I don't think that qualifies as "standing", but IANAL.
  - jlmorton 3y ago
    I think the missing info here is that Musk gave the non-profit the initial $100 million dollars, which they used to develop the technology purportedly for the benefit of the public, and then turned around and added a for-profit subsidiary where all the work is happening.
    - AlbertCory 3y ago
      He has plenty of standing, but the "supposed to benefit all mankind" argument isn't it. If that were enough, everyone not holding stock in MSFT would have standing, and they don't.
  - s1artibartfast 3y ago
    He was also a founding donor, so there is that. If I have a non-profit legally chartered save puppies, you give me a million dollars, then I buy myself cars and houses, I would expect you have some standing.
    - AlbertCory 3y ago
      Note that I didn't say he lacks standing. Just that your argument wasn't it.
    - sroussey 3y ago
      No, they spent $1m saving puppies, then raised more funds and did other things. That money Musk donated was spent almost a decade ago. He has a competitor now that is not very good, so he is suing to slow them down.
KeplerBoy 3y ago
A non-profit took his money and decided to be for profit and compete with the AI efforts of his own companies?
- a_wild_dandan 3y ago
  Yeah, OpenAI basically grafted a for-profit entity onto the non-profit to bypass their entire mission. They’re now extremely closed AI, and are valued at $80+ billion. If I donated millions to them, I’d be furious.
  - acorn1969 3y ago
    Nobody promised open sourced AI, despite the name. Exhibit B, page 40, Altman to Musk email: "We'd have an ongoing conversation about what work should be open-sourced and what shouldn't."
    - HDThoreaun 3y ago
      Elon isnt asking for them to be open source.
    - 93po 3y ago
      Do you think payroll should be open source? Even if yes it’s something you should discuss first. This isn’t a damming statement
      - deleted 3y ago
        [deleted]
  - api 3y ago
    It's almost like the guy behind an obvious grift like Worldcoin doesn't always work in good faith. What gives me even less sympathy for Altman is that he took OpenAI, whose mission was open AI, and turned it not only closed but then immediately started a world tour trying to weaponize fear-mongering to convince governments to effectively outlaw actually open AI.
Kranar 3y ago
The statement of claims is full of damages. It claims that Musk donated 44 million dollars on the basis of specific claims made by the plaintiffs as well as the leasing of office space and some other contributions Musk made.
- riku_iki 3y ago
  it sounds like small amount in grand scheme of things..
  - bitcurious 3y ago
    Unless you consider it as funding in a seed round. These days, OpenAI is worth double digit billions at the very least. If Musk funded the venture as a startup, he’d have increased his net worth by at least a few billion.
    - riku_iki 3y ago
      it was not his intention to spend these money on funding some startup with expectation of future profit, otherwise he would invest this money into some startup instead of non-profit OpenAI, or even requested OpenAI equity. Imo(non-expert) court unlikely will buy such approach.
TeeMassive 3y ago
I didn't read the suit, but they used (and abused?) Twitter's api to siphon data that was used to train an AI which that made them very very rich. That's just unjust enrichment. Elon's money paid for the website and using the API at that scale cost Twitter money while they got nothing out of it.
zoogeny 3y ago
I don't know how comparable it would be, but I imagine if I donated $44 million to a university under the agreement that they would use the money in a particular way (e.g. to build a specific building or to fund a specific program) and then the university used the money in some other way, I feel I ought to have some standing to sue them. Of course, this all depends on the investment details specified in a contract and the relevant law, both of which I am not familiar with.
- mikeyouse 3y ago
  Yeah - Had you donated the funds as "restricted funding" in the nonprofit parlance, they would have a legal requirement to use the funds as you had designated. It seems that Musk contributed general non-restricted funding so the nonprofit can more or less do what they want with the money.. Not saying there's no case here, but if he really wanted them to do something specific, there's a path for that to happen and that he didn't take that path is definitely going to hurt his case.
  - SoftTalker 3y ago
    A non-profit is obligated to use any donated funds for its stated non-profit purpose. Restricted donations are further limited.
    - mikeyouse 3y ago
      Right - but OpenAI's nonprofit purpose is extremely broad; "OpenAIs mission is to build general-purpose artificial intelligence (AI) that safely benefits humanity, unconstrained by a need to generate financial return. OpenAI believes that artificial intelligence technology has the potential to have a profound, positive impact on the world, so our goal is to develop and responsibly deploy safe AI technology, ensuring that its benefits are as widely and evenly distributed as possible." So as long as the Musk bucks were used for that purpose, the org is within their rights to do any manner of other activities including setting up competing orgs and for-profit entities with non-Musk bucks - or even with Musk bucks if they make the case that it serves the purpose. The IRS has almost no teeth here, these types of "you didn't use my unrestricted money for the right purpose" complaints are very, very rarely enforced.
AlwaysRock 3y ago
It's worth reading the actual filing. It's very readable. https://www.courthousenews.com/wp-content/uploads/2024/02/musk-v-altman-openai-complaint-sf.pdf https://www.courthousenews.com/wp-content/uploads/2024/02/mu...
- QuantumG 3y ago
  It's literally the title.
  - AlwaysRock 3y ago
    The title does not go into detail of the suit claims, which is what the comment I responded to asked about.
dragonwriter 3y ago
> Wouldn't you have to prove damages in a lawsuit like this? Not really; the specific causes of action Musk is relying on do not turn on the existence if actual damages, and of the 10 remedies sought in the prayer for relief, only one of them includes actual damages (but some relief could be granted under it without actual damages.) Otherwise, its seeking injuctive/equitable relief, declaratory judgement, and disgorgement of profits from unfair business practices, none of which turn on actual damages.
delfinom 3y ago
Non-profit status is a government granted status and the government is we the people. Abuse of non-profit status is damaging to all citizens.
prepend 3y ago
The damages are clearly the valuation of the current organization vs the percent of original funding Musk provided. The exact amount will be argued but it will likely be in the billions given OpenAI’s recent valuations.
thepasswordis 3y ago
Could they just give him back the $60M or whatever? That seems like nothing to them, or Elon.
- robbrown451 3y ago
  Imagine if a regular for profit startup did that. It gets 60 million in initial funding, and later their valuation goes up to 100 billion. Of course they can't just give the 60 million back. This is different and has a lot of complications that are basically things we've never seen before, but still, just giving the 60 million back doesn't make any sense at all. They would've never achieved what they've achieved without his 60 million.
stubish 3y ago
How much money have competitors been spending to keep up, reproducing the technology that was supposed to be released to the public benefiting everyone. All of that could conceivably be claimed as damages. Money they should not have needed to spend. Even all of the money spent to access ChatGPT. Because, if OpenAI had been releasing their tech to the public, the public would not have had to pay OpenAI to use it. Or the value of OpenAI-for-profit itself could be considered damages in a class action. Because it gained that value because of technology withheld from the public, rather than releasing it and allowing the public to build the for-profit businesses around the tech. Lots of avenues for Musk and others' lawyers to get their teeth into, especially if this initial law suit can demonstrate the fraud.
xcv123 3y ago
They scammed him out of tens of millions of dollars and a significant amount of his time and energy.

laristine 3y ago

You can sue for many reasons. For example, when a party breaks a contract, the other party can sue to compel the contract to be performed as agreed.

otterley 3y ago
Specific performance is a last resort. In contract law, the bias is towards making the plaintiff whole, and frequently there are many ways to accomplish that (like paying money) instead of making the defendant specifically honor the terms of the original agreement.
- nsomaru 3y ago
  Not sure about English law but in Roman law (and derived systems as in South Africa) the emphasis is on specific performance as a first resort — the court will seek to implement the intention of the parties embodied in the contract as far as possible. Cancellation is a last resort.
  - dragonwriter 3y ago
    > Not sure about English law but in Roman law This is actually American law, neither English nor Roman. While it is derived from English common law, it has an even stronger bias against specific performance (and in fact bright-line prohibits some which would be allowed in the earlier law from which it evolved, because of the Constitutional prohibition on involuntary servitude.)
    - otterley 3y ago
      This is correct!
- laristine 3y ago
  That's very interesting, thanks! I just learned that courts actually tend to grant monetary damages more frequently than specific performance in general. However, I have always maintained that making the plaintiff whole should bias toward specific performance. At least that's what I gathered from law classes. In many enterprise partnerships, the specific arrangements are core to the business structures. For example, Bob and Alice agreed to be partners in a millions-dollar business. Bob suddenly kicked Alice out without a valid reason, breaching the contract. Of course, Alice's main remedy should be to be back in the business, not receiving monetary damage that is not just difficult to measure, but also not in Alice's mind or best interest at all.
aCoreyJ 3y ago
Well Elon was forced to buy Twitter that way
- wand3r 3y ago
  I think this is downvoted because (and I could be wrong) he could have paid a breakup fee instead of buying the business. So he wasn't compelled to actually own and operate the business.
  - colejohnson66 3y ago
    No. He couldn't back out as he had already agreed to the 44B. The breakup fee was for if the deal fell through for other reasons, such as Twitter backing out or the government blocking it. https://www.nytimes.com/2022/07/12/technology/twitter-musk-lawsuit-reasons.html https://www.nytimes.com/2022/07/12/technology/twitter-musk-l...
  - selectodude 3y ago
    You are wrong, I’m afraid. The breakup fee is reimbursement for outside factors tanking the deal. A binding agreement to buy means that if you arrange financing and the government doesn’t veto it, you’re legally obligated to close.
  - dragonwriter 3y ago
    > I think this is downvoted because (and I could be wrong) he could have paid a breakup fee instead of buying the business. No, he couldn't, the widely discussed breakup fee in the contract was a payment if the merger could not be completed for specific reasons outside of Musk’s control. It wasn’t a choice Musk was able to opt into. OTOH, IIRC, he technically wasn't forced to because he completed the transaction voluntarily during a pause in the court proceedings after it was widely viewed as clear that he would lose and be forced to complete the deal.
  - Mountain_Skies 3y ago
    It's a thread about OpenAI. Some people seem to spend their days looking for ways to make every thread about their angst over Musk purchasing Twitter and will shove it into any conversation they can without regard of its applicability to the thread's subject. Tangent conversations happen but they get tedious after a while when they're motivated by anger and the same ones pop up constantly. Yes, the thread is about Musk, that doesn't mean his taste in music should be part of the conversation any more than some additional whining about him buying Twitter should be.

boole1854 3y ago

He doesn't have access to the GPT-4 source code and data because they decided to keep that proprietary.

cynusx 3y ago
They will probably try to unearth that in the discovery phase

tw600040 3y ago

that AGI, instead of benefitting the whole world, in which Musk is a part of, will end up only benefitting Microsoft, which he isn't a part of?

AlbertCory 3y ago
I don't think that qualifies as "standing", but IANAL.
- jlmorton 3y ago
  I think the missing info here is that Musk gave the non-profit the initial $100 million dollars, which they used to develop the technology purportedly for the benefit of the public, and then turned around and added a for-profit subsidiary where all the work is happening.
  - AlbertCory 3y ago
    He has plenty of standing, but the "supposed to benefit all mankind" argument isn't it. If that were enough, everyone not holding stock in MSFT would have standing, and they don't.
- s1artibartfast 3y ago
  He was also a founding donor, so there is that. If I have a non-profit legally chartered save puppies, you give me a million dollars, then I buy myself cars and houses, I would expect you have some standing.
  - AlbertCory 3y ago
    Note that I didn't say he lacks standing. Just that your argument wasn't it.
  - sroussey 3y ago
    No, they spent $1m saving puppies, then raised more funds and did other things. That money Musk donated was spent almost a decade ago. He has a competitor now that is not very good, so he is suing to slow them down.

KeplerBoy 3y ago

A non-profit took his money and decided to be for profit and compete with the AI efforts of his own companies?

a_wild_dandan 3y ago
Yeah, OpenAI basically grafted a for-profit entity onto the non-profit to bypass their entire mission. They’re now extremely closed AI, and are valued at $80+ billion. If I donated millions to them, I’d be furious.
- acorn1969 3y ago
  Nobody promised open sourced AI, despite the name. Exhibit B, page 40, Altman to Musk email: "We'd have an ongoing conversation about what work should be open-sourced and what shouldn't."
  - HDThoreaun 3y ago
    Elon isnt asking for them to be open source.
  - 93po 3y ago
    Do you think payroll should be open source? Even if yes it’s something you should discuss first. This isn’t a damming statement
    - deleted 3y ago
      [deleted]
- api 3y ago
  It's almost like the guy behind an obvious grift like Worldcoin doesn't always work in good faith. What gives me even less sympathy for Altman is that he took OpenAI, whose mission was open AI, and turned it not only closed but then immediately started a world tour trying to weaponize fear-mongering to convince governments to effectively outlaw actually open AI.

Kranar 3y ago

The statement of claims is full of damages. It claims that Musk donated 44 million dollars on the basis of specific claims made by the plaintiffs as well as the leasing of office space and some other contributions Musk made.

riku_iki 3y ago
it sounds like small amount in grand scheme of things..
- bitcurious 3y ago
  Unless you consider it as funding in a seed round. These days, OpenAI is worth double digit billions at the very least. If Musk funded the venture as a startup, he’d have increased his net worth by at least a few billion.
  - riku_iki 3y ago
    it was not his intention to spend these money on funding some startup with expectation of future profit, otherwise he would invest this money into some startup instead of non-profit OpenAI, or even requested OpenAI equity. Imo(non-expert) court unlikely will buy such approach.

TeeMassive 3y ago

I didn't read the suit, but they used (and abused?) Twitter's api to siphon data that was used to train an AI which that made them very very rich. That's just unjust enrichment. Elon's money paid for the website and using the API at that scale cost Twitter money while they got nothing out of it.

zoogeny 3y ago

I don't know how comparable it would be, but I imagine if I donated $44 million to a university under the agreement that they would use the money in a particular way (e.g. to build a specific building or to fund a specific program) and then the university used the money in some other way, I feel I ought to have some standing to sue them. Of course, this all depends on the investment details specified in a contract and the relevant law, both of which I am not familiar with.

mikeyouse 3y ago
Yeah - Had you donated the funds as "restricted funding" in the nonprofit parlance, they would have a legal requirement to use the funds as you had designated. It seems that Musk contributed general non-restricted funding so the nonprofit can more or less do what they want with the money.. Not saying there's no case here, but if he really wanted them to do something specific, there's a path for that to happen and that he didn't take that path is definitely going to hurt his case.
- SoftTalker 3y ago
  A non-profit is obligated to use any donated funds for its stated non-profit purpose. Restricted donations are further limited.
  - mikeyouse 3y ago
    Right - but OpenAI's nonprofit purpose is extremely broad; "OpenAIs mission is to build general-purpose artificial intelligence (AI) that safely benefits humanity, unconstrained by a need to generate financial return. OpenAI believes that artificial intelligence technology has the potential to have a profound, positive impact on the world, so our goal is to develop and responsibly deploy safe AI technology, ensuring that its benefits are as widely and evenly distributed as possible." So as long as the Musk bucks were used for that purpose, the org is within their rights to do any manner of other activities including setting up competing orgs and for-profit entities with non-Musk bucks - or even with Musk bucks if they make the case that it serves the purpose. The IRS has almost no teeth here, these types of "you didn't use my unrestricted money for the right purpose" complaints are very, very rarely enforced.

AlwaysRock 3y ago

It's worth reading the actual filing. It's very readable. https://www.courthousenews.com/wp-content/uploads/2024/02/musk-v-altman-openai-complaint-sf.pdf https://www.courthousenews.com/wp-content/uploads/2024/02/mu...

QuantumG 3y ago
It's literally the title.
- AlwaysRock 3y ago
  The title does not go into detail of the suit claims, which is what the comment I responded to asked about.

dragonwriter 3y ago

> Wouldn't you have to prove damages in a lawsuit like this? Not really; the specific causes of action Musk is relying on do not turn on the existence if actual damages, and of the 10 remedies sought in the prayer for relief, only one of them includes actual damages (but some relief could be granted under it without actual damages.) Otherwise, its seeking injuctive/equitable relief, declaratory judgement, and disgorgement of profits from unfair business practices, none of which turn on actual damages.

delfinom 3y ago

Non-profit status is a government granted status and the government is we the people. Abuse of non-profit status is damaging to all citizens.

prepend 3y ago

The damages are clearly the valuation of the current organization vs the percent of original funding Musk provided. The exact amount will be argued but it will likely be in the billions given OpenAI’s recent valuations.

thepasswordis 3y ago

Could they just give him back the $60M or whatever? That seems like nothing to them, or Elon.

robbrown451 3y ago
Imagine if a regular for profit startup did that. It gets 60 million in initial funding, and later their valuation goes up to 100 billion. Of course they can't just give the 60 million back. This is different and has a lot of complications that are basically things we've never seen before, but still, just giving the 60 million back doesn't make any sense at all. They would've never achieved what they've achieved without his 60 million.

stubish 3y ago

How much money have competitors been spending to keep up, reproducing the technology that was supposed to be released to the public benefiting everyone. All of that could conceivably be claimed as damages. Money they should not have needed to spend. Even all of the money spent to access ChatGPT. Because, if OpenAI had been releasing their tech to the public, the public would not have had to pay OpenAI to use it. Or the value of OpenAI-for-profit itself could be considered damages in a class action. Because it gained that value because of technology withheld from the public, rather than releasing it and allowing the public to build the for-profit businesses around the tech. Lots of avenues for Musk and others' lawyers to get their teeth into, especially if this initial law suit can demonstrate the fraud.

xcv123 3y ago

They scammed him out of tens of millions of dollars and a significant amount of his time and energy.