Elon Musk v OpenAI, Court Filing, retrieved on April 30, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 19 of 29.

COUNT VII: BREACH OF IMPLIED-IN-FACT CONTRACT (In the alternative to Count VI) (Against Altman and OpenAI, Inc.)

254. Plaintiff re-alleges and incorporates by reference paragraphs 1 through 253 inclusive, as though fully set forth herein.

255. The relationship, surrounding circumstances, and intentional course of conduct between Musk on the one hand, and Altman and OpenAI, Inc. on the other resulted in a valid, enforceable, and binding implied-in-fact contract.

256. Altman proposed that he and Musk co-found an AI research nonprofit which Altman promised would make its findings open for the good of all and would avoid concentrating its technology for the profit of any person or company. Musk assented and in turn agreed to use his time, name, reputation, and extensive connections to recruit premier talent, and make significant financial contributions to help launch the non-profit.

257. From there, Altman individually and/or on behalf of OpenAI, Inc. proceeded and continued to reaffirm both publicly and to Musk directly that OpenAI, Inc. would be open and not for-profit. Such reaffirmations by Defendants were made, without limitation, in OpenAI, Inc.’s Certificate of Incorporation, the non-profit’s Charter (circulated to Musk), numerous OpenAI online announcements, and countless communications to Musk from 2015 to 2020, as alleged in detail hereinabove.

258. The conduct of Musk on the one hand, and Altman and OpenAI, Inc. on the other was intentional, and each knew or had reason to know that the other party(ies) would interpret their conduct as an agreement.

259. Musk fulfilled any and all obligations and has performed and/or complied with any and all terms and conditions of the agreement that he was required to perform and/or comply with, except those which were waived and/or excused, or the non-performance of which was justified, and is in no matter or respect in breach of said agreement. During OpenAI, Inc.’s critical first five years, Musk used his power and connections to bring in the workforce necessary to launch the non-profit and contributed considerable funding each year, totaling approximately $44,811,795.00 from 2016 to 2020.

260. Initially, Altman and OpenAI, Inc. performed their obligations, and publicly disclosed the non-profit’s findings and research supporting its preliminary GPT models.

261. In 2023, however, Altman and OpenAI, Inc. breached their implied-in-fact contract by, without limitation, failing to publicly disclose the nonprofit’s research, closing off the non-profit’s technology for private profit, excluding the public from open usage, self-dealing and exploiting the nonprofit’s assets to enrich themselves, and as recently as June 2024, working to convert the non-profit to a fully for-profit entity.

262. Defendants’ obligations to perform were not waived nor were their breaches and/or failures to perform justified and/or excused. Defendants intentionally concealed their wrongful conduct, which prevented Musk from discovering their scheme, notwithstanding his exercise of due diligence.

263. As a direct and proximate result of Altman and OpenAI, Inc.’s conduct, acts, and omissions alleged hereinabove, Defendants have deprived Musk of the benefit of the parties’ agreement and have caused Musk to suffer damages, including but not limited to the loss of the time and resources he expended to direct research and recruit talent, the financial contributions he made to OpenAI, and damage to his reputation, in an amount to be adjudicated and determined at trial, but which vastly exceeds $75,000, plus prejudgment interest.

264. Musk has no adequate remedy at law for many of the injuries he suffered as a result of Defendants’ breaches and failures, and such injuries cannot reasonably, adequately, or precisely be measured or compensated in damages. Thus, Musk also seeks and is entitled to specific performance of Defendants’ contractual obligations.

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