ChatGPT-maker OpenAI has a harsh response to Elon Musk's lawsuit

March 6, 2024 – Media Mention

TheStreetQuoted | Ira Steinberg

Litigation Partner, Ira Steinberg, shared his insights with TheStreet regarding the lawsuit Elon Musk filed against OpenAI.

Excerpts:

Ira Steinberg, a partner in Greenberg Glusker’s Litigation Group, told TheStreet that while Musk's complaint is well-written, he thinks it unlikely that Musk will be able to achieve his "real goal, which is to change how OpenAI is operating and enforce his views of how AI research should progress."

"The claims appear to be Musk attempting to vindicate a philosophical interest in how AI research should proceed and how OpenAI should operate. Those kinds of claims are inherently difficult for an individual to bring," Steinberg said, adding that legally, the case will turn on the "extent to which OpenAI has a duty to Musk personally to abide by the spirit of its founding."

Steinberg said that Musk's arguments both of breach of contract and promissory estoppel — a quasi-contract where someone relies on an oral promise to their detriment — are weak to the goal of the case. Even if Musk can prove these claims, the legal remedy would involve the return of his donation.

The problem with Musk's argument of breach of fiduciary duty, according to Steinberg, is that the statute "states that duties arise from the creation of a 'charitable trust.'" He said that "very few people have the power to sue for a breach of the duties owed in a charitable trust," adding that normally, it is the Attorney General" who would bring such a suit.

Steinberg said that the legal theory throughout Musk's suit is "probably not" strong enough to accomplish his goal of re-steering OpenAI's governance. Musk's strongest claims, he said, are for the return of his donations.

Steinberg expects OpenAI to knock out some of the claims in a motion to dismiss, "but would not be surprised to see other claims survive, in particular the promissory estoppel and unfair business practices claims."

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