Elon Musk drops lawsuit against OpenAI and Sam Altman

Elon Musk on Tuesday withdrew his lawsuit against OpenAI and two of the company’s founders, Sam Altman and Greg Brockman, in California state court. Musk’s decision to file the lawsuit came just one day after he publicly criticized OpenAI and its new partnership with Apple.

The case was dismissed without prejudice, according to a court filing obtained by CNBC.

In February, Musk sued OpenAI, Altman, and Brockman — the current CEO and president of OpenAI, respectively — for breach of contract and fiduciary duty.

A hearing is scheduled for Wednesday in San Francisco, where a judge will consider whether the case should be dismissed at the request of the defendants.

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

Instead, Musk claimed that the early OpenAI team set out to develop artificial general intelligence, or AGI, “for the benefit of humanity,” but the project was turned into a for-profit entity largely controlled by major shareholder Microsoft. .

Musk used much of the 35-page complaint (plus attached documents) he filed in March to remind the world where he stood in creating a company that has since become one of the hottest startups on the planet, (OpenAI ranked #1 on CNBC’s Disruptor list 50 in 2023) thanks in large part to the viral spread of ChatGPT.

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

Last year, Musk launched his own AI startup and OpenAI competitor, xAI, last month Announce $6 billion Series B funding round. Investors included Andreessen Horowitz, Sequoia Capital, and Fidelity Management and Research.

X.AI seeks to “understand the true nature of the universe,” according to its website. Last year, X.AI released a chatbot called Grok, which the company says was modeled after “The Hitchhiker’s Guide to the Galaxy.” The company claims that the chatbot debuted after two months of training and has instant knowledge of the Internet.

Representatives for Musk and Altman did not immediately respond to a request for comment.

—CNBC’s Laura Kolodny contributed to this report.

Correction: The lawsuit was filed in February. A previous version of this story misstated the month.