Interesting lawsuit; thanks for sharing! A few hot (unresearched, and very tentative) takes, mostly on the Musk contract/fraud type claims rather than the unfair-competition type claims related to x.ai:
One of the overarching questions to consider when reading any lawsuit is that of remedy. For instance, the classic remedy for breach of contract is money damages . . . and the potential money damages here don’t look that extensive relative to OpenAI’s money burn.
Broader “equitable” remedies are sometimes available, but they are more discretionary and there may be some significant barriers to them here. Specifically, a court would need to consider the effects of any equitable relief on third parties who haven’t done anything wrongful (like the bulk of OpenAI employees, or investors who weren’t part of an alleged conspiracy, etc.), and consider whether Musk unreasonably delayed bringing this lawsuit (especially in light of those third-party interests). On hot take, I am inclined to think these factors would weigh powerfully against certain types of equitable remedies.
Stated more colloquially, the adverse effects on third parties and the delay (“laches”) would favor a conclusion that Musk will have to be content with money damages, even if they fall short of giving him full relief.
Third-party interests and delay may be less of a barrier to equitable relief against Altman himself.
Musk is an extremely sophisticated party capable of bargaining for what he wanted out of his grants (e.g., a board seat), and he’s unlikely to get the same sort of solicitude on an implied contract theory that an ordinary individual might. For example, I think it was likely foreseeable in 2015 to January 2017 -- when he gave the bulk of the funds in question—that pursuing AGI could be crazy expensive and might require more commercial relationships than your average non-profit would ever consider. So I’d be hesitant to infer much in the way of implied-contractual constraints on OpenAI’s conduct than section 501(c)(3) of the Internal Revenue Code and California non-profit law require.
The fraud theories are tricky because the temporal correspondence between accepting the bulk of the funds and the alleged deceit feels shaky here. By way of rough analogy, running up a bunch of credit card bills you never intended to pay back is fraud. Running up bills and then later deciding that you aren’t going to pay them back is generally only a contractual violation. I’m not deep into OpenAI drama, but a version of the story in which the heel turn happened later in the game than most/all of Musk’s donations and assistance seems plausible to me.
Interesting lawsuit; thanks for sharing! A few hot (unresearched, and very tentative) takes, mostly on the Musk contract/fraud type claims rather than the unfair-competition type claims related to x.ai:
One of the overarching questions to consider when reading any lawsuit is that of remedy. For instance, the classic remedy for breach of contract is money damages . . . and the potential money damages here don’t look that extensive relative to OpenAI’s money burn.
Broader “equitable” remedies are sometimes available, but they are more discretionary and there may be some significant barriers to them here. Specifically, a court would need to consider the effects of any equitable relief on third parties who haven’t done anything wrongful (like the bulk of OpenAI employees, or investors who weren’t part of an alleged conspiracy, etc.), and consider whether Musk unreasonably delayed bringing this lawsuit (especially in light of those third-party interests). On hot take, I am inclined to think these factors would weigh powerfully against certain types of equitable remedies.
Stated more colloquially, the adverse effects on third parties and the delay (“laches”) would favor a conclusion that Musk will have to be content with money damages, even if they fall short of giving him full relief.
Third-party interests and delay may be less of a barrier to equitable relief against Altman himself.
Musk is an extremely sophisticated party capable of bargaining for what he wanted out of his grants (e.g., a board seat), and he’s unlikely to get the same sort of solicitude on an implied contract theory that an ordinary individual might. For example, I think it was likely foreseeable in 2015 to January 2017 -- when he gave the bulk of the funds in question—that pursuing AGI could be crazy expensive and might require more commercial relationships than your average non-profit would ever consider. So I’d be hesitant to infer much in the way of implied-contractual constraints on OpenAI’s conduct than section 501(c)(3) of the Internal Revenue Code and California non-profit law require.
The fraud theories are tricky because the temporal correspondence between accepting the bulk of the funds and the alleged deceit feels shaky here. By way of rough analogy, running up a bunch of credit card bills you never intended to pay back is fraud. Running up bills and then later deciding that you aren’t going to pay them back is generally only a contractual violation. I’m not deep into OpenAI drama, but a version of the story in which the heel turn happened later in the game than most/all of Musk’s donations and assistance seems plausible to me.