Elon Musk drops suit against OpenAI and Sam Altman

In this photo illustration, the logo of ‘OpenAI’ is displayed on a mobile phone screen in front of a computer screen displaying the photographs of Elon Musk and Sam Altman in Ankara, Turkiye on March 14, 2024.

Muhammed Selim Korkutata | Anadolu | Getty Images

Elon Musk on Tuesday withdrew his lawsuit against OpenAI and two of the company’s co-founders, Sam Altman and Greg Brockman, in California state court. In March, Musk had filed a lawsuit for breach of contract and fiduciary duty.

A hearing was scheduled for Wednesday in San Francisco in which the judge was going to consider whether the case should be dismissed as requested by the defendants including Altman and Brockman.

Experts told CNBC in March that the case was built on a questionable legal foundation, because the contract at the heart of the suit was not a formal written agreement that was signed by all parties involved.

Rather, Musk had alleged that the early OpenAI team had set out to develop artificial general intelligence, or AGI, “for the benefit of humanity,” but that the project has been transformed into a for-profit entity that’s largely controlled by principal shareholder Microsoft.

Musk had used much of the 35-page complaint (plus attached exhibits) he filed in March to remind the world of his position in the creation of a company that’s since become one of the hottest startups on the planet, (OpenAI ranked first on CNBC’s Disruptor 50 list in 2023) thanks largely to the viral spread of ChatGPT.

“It’s certainly a good advertisement for the benefit of Elon Musk,” Kevin O’Brien, partner at Ford O’Brien Landy LLP and former assistant U.S. attorney, told CNBC at the time. “I’m not sure about the legal part though.”

-CNBC’s Lora Kolodny contributed to this report.

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