OpenAI turned Microsoft 'subsidiary': Elon Musk sues Sam Altman

Tesla (TSLA) CEO Elon Musk has moved to sue OpenAI and CEO Sam Altman over what he alleges is a breach of contract. Musk claims the company is no longer following its original goal of helping humanity, instead focused on profits. "OpenAI has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft," the lawsuit states.

Yahoo Finance Anchors Brad Smith and Seana Smith break down this latest development in the relationship between Musk and Altman.

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Editor's note: This article was written by Nicholas Jacobino

Video transcript

BRAD SMITH: Elon Musk is suing OpenAI and its CEO Sam Altman, saying, the company is no longer following its original goal to create AI to benefit humanity. And instead, has opted to focus on profit.

Now, Musk is claiming in the lawsuit that this pivot breaches their contract here. Musk had also brought up that he was originally presented with this idea of an open source type of AI platform and language learning model capability by Altman here.

Larger question, as we've seen some of these suits or allegations come forward, where this will net out, especially among some of the big investors that OpenAI has been able to take on billions of dollars from at this point.

SEANA SMITH: Yeah. I think the question is what the outcome is going to potentially look like, what some of those changes could result and end up being as a result of this lawsuit. But really, this is just the latest in this ongoing strained relationship, to say the least, between Elon Musk and Sam Altman.

So Elon Musk here filing this lawsuit saying that the company is really just strayed from that original nonprofit mission. And we know that Musk was an early investor within the SpaceX co-founded OpenAI in 2015. Stepped down from its board in 2018. But within this lawsuit bringing up the issue that he's saying that their deal here with Microsoft for more than $10 billion, that really represents the fact that it has strayed from their initial mission.

And he went on to say that OpenAI has been transformed into a closed source de facto subsidiary of the largest technology company, Microsoft. So I think the question here is just where this ends up, how this ends up, and what changes could, in fact, be implemented as a result of this.