Musk v. Altman, Take 2

I previously wrote (including here and here) about a suit Elon Musk filed against Sam Altman and OpenAI; in large part, he claimed that Altman had converted OpenAI from a nonprofit to a for-profit, in violation of its early plans. 

In June, he withdrew the suit.

Then yesterday, he revived it with a new complaint. (Because so many new sites absolutely refuse to link to or host the legal documents they write about, you can find it here.)

I’ve just skimmed through it. As best as I can tell, Musk has mostly (though not entirely) dropped the allegations that OpenAI has stopped being a nonprofit and, instead, is a for-profit. Instead, he argues that it has used an intricate web of for-profit subsidiaries to pull the value out of OpenAI and allow Altman and Microsoft (and maybe others) to enrich themselves. But Altman and OpenAI disguised that, fraudulently inducing Musk to provide funding to what he believed would be a charitable not-for-profit entity. He claims that OpenAI turned “Musk’s contributions into free start-up capital and their years of section 501(c)(3) tax benefits into a free government subsidy.”

Of course, they also throw in a civil RICO claim at the end and, while I’m not an expert on RICO by any means, my understanding is that in 99% of the time, a civil RICO claim is a strong indicator that a case is purely performative and the plaintiff doesn’t know what they’re doing.

Is that going to hold here? I don’t know for sure, of course, but between the RICO claim, the former complaint, and the fact that it’s Musk sitting in the plaintiff’s spot, I’ll admit to a fair amount of skepticism.

But I guess we’ll see where this goes.

Samuel D. Brunson