This content originally appeared on HackerNoon and was authored by Legal PDF: Tech Court Cases
:::tip 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 25 of 29.
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COUNT XIII: AIDING AND ABETTING BREACH OF FIDUCIARY DUTY (Against the OpenAI For-Profit Entities)
316. Plaintiff re-alleges and incorporates by reference paragraphs 1 through 315 inclusive, as though fully set forth herein.
\ 317. As a charity and persons soliciting contributions on behalf of a charity, OpenAI, Inc., Altman, and Brockman each owe a fiduciary duty to Musk, from whom charitable contributions were actively solicited, including under Cal. Bus. & Prof. Code § 17510.8.
\ 318. Altman, Brockman, and OpenAI, Inc. solicited and obtained contributions from Musk by making repeated and material promises, representations, and reassurances to him that they would develop AI for the benefit of humanity, would predominantly open source their technology, avoid concentrating it, and would not operate for the profit of any person or company, as evidenced in, without limitation, the emails, corporate filings, and online pronouncements alleged above.
\ 319. On information and belief, Altman, Brockman, and OpenAI, Inc. breached their fiduciary duties to Musk by:
\ a. Keeping secret the non-profit’s research and development, including details on GPT-4, GPT-4T, and GPT-4o’s architecture, hardware, training method, and training computation;
\ b. Exploiting Musk’s contributions, and the technological assets funded by those contributions, in a thoroughly for-profit enterprise;
\ c. Licensing and/or furnishing OpenAI, Inc.’s GPT-4 and related technology exclusively to Microsoft, concentrating it in this single giant for-profit corporation;
\ d. Permitting Microsoft, a publicly traded business, to occupy a seat on OpenAI, Inc.’s Board of Directors and otherwise to exert undue influence and control over OpenAI’s activities;
\ e. Closing off OpenAI, Inc.’s technology for profit and erecting a “paywall” excluding the public from open usage of GPT-4 and related technology to advance Defendants and Microsoft’s own commercial interests;
\ f. Self-dealing and manipulating the non-profit’s assets to enrich themselves by, for example causing OpenAI, Inc. to excessively patronize businesses in which Altman owns a significant interest, for his personal enrichment; and
\ g. Currently working to convert the non-profit into a fully for-profit commercial entity
\ 320. The OpenAI For-Profit Entities each had actual knowledge of the fiduciary duties Altman, Brockman, and OpenAI, Inc. owed to Musk, because Altman and Brockman were instrumental in their formation. The very purpose of the OpenAI For-Profit Entities is to enable Altman and Brockman to operate for non-charitable purposes and to circumvent the fiduciary duties they owe to the donors. Further, on information and belief, Altman and Brockman have at all relevant times been officers, agents, employees, and/or owners whose knowledge and intent is imputed to the OpenAI For-Profit Entities.
\ 321. The OpenAI For-Profit Entities provided substantial assistance to Altman and Brockman, aiding and abetting their respective breaches of fiduciary duty by helping them exploit OpenAI, Inc.’s intellectual property and staff for Defendants’ private gain, rather than advancing the non-profit’s express charitable purposes. 322. Defendants willfully aided and abetted these breaches of fiduciary duty for Defendants’ own benefit, and this was a substantial factor in causing harm to Musk.
\ 323. On information and belief, Defendants have been greatly enriched by their resulting misappropriation of the non-profit’s assets and their selfdealing in blatant derogation of the fiduciary duties Altman, Brockman, and OpenAI, Inc. owed and continue to owe Musk.
\ 324. Defendants intentionally concealed their wrongful conduct, which prevented Musk from discovering their scheme, notwithstanding his exercise of due diligence.
\ 325. As a direct and proximate result of the OpenAI For-Profit Entities’ conduct, acts, and omissions alleged hereinabove, Musk is entitled to recover the damages he sustained and will sustain, including any income, gains, compensation, profits, and advantages obtained, received, or to be received by Defendants, or any of them, arising from the wrongful acquisition of Musk’s contributions to OpenAI, Inc., including prejudgment interest. Musk is entitled to an order requiring Defendants, jointly and severally, to render an accounting to ascertain the amount of such proceeds.
\ 326. As a direct and proximate result of Defendants’ wrongful conduct, acts, and omissions alleged hereinabove, Musk has been damaged, and Defendants have been and will continue to be unjustly enriched, in an amount that shall be assessed at trial, but which vastly exceeds $75,000, and for which restitution and/or non-restitutionary disgorgement is appropriate. Such should include the imposition of a constructive trust; a declaration by this Court that Defendants are jointly and severally the constructive trustee(s) for the benefit of Musk; and an order that Defendants convey to Musk all of the profits, assets, property, and ill-gotten gains received or to be received by Defendants, which are traceable to Musk’s wrongfully acquired financial and other contributions to OpenAI, Inc.
\ 327. Defendants’ wrongful conduct, acts, and omissions have proximately caused and will continue to cause Musk substantial injury and damage, much of which cannot be reasonably or adequately measured or compensated in money damages. The harm this wrongful conduct will cause to Musk is both imminent and irreparable, and the amount of damage sustained by Musk will be difficult to ascertain if such wrongful conduct is allowed to continue without restraint. Musk is entitled to an injunction during the pendency of this action, and permanently enjoining Defendants, their officers, agents, and employees, and all persons acting in concert with them, from engaging in such further tortious conduct.
\ 328. Defendants’ wrongful conduct constitutes oppression, fraud, and/or malice under Cal. Civ. Code § 3294, entitling Musk to an award of punitive damages appropriate to punish or set an example of Defendants in an amount to be determined at trial.
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This content originally appeared on HackerNoon and was authored by Legal PDF: Tech Court Cases
Legal PDF: Tech Court Cases | Sciencx (2024-08-11T11:00:14+00:00) OpenAI Trustees Accused of Misusing Donor Funds. Retrieved from https://www.scien.cx/2024/08/11/openai-trustees-accused-of-misusing-donor-funds/
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