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OpenAI's legal headaches are adding up

Geoff Weiss   

OpenAI's legal headaches are adding up
  • Even as it promises to disrupt the economy, OpenAI's legal headaches are adding up.
  • Elon Musk just sued the AI company, and the SEC is reportedly investigating it.

OpenAI's technology continues to stun (and worry) onlookers, but a growing number of lawsuits and investigations are nipping at the company's heels.

The latest suit against the company comes courtesy of Elon Musk, the Space X and Tesla CEO who was initially on the OpenAI board.

Musk alleges that the AI startup's pact with Microsoft has betrayed its nonprofit mission.

His lawyers accused OpenAI of creating artificial general intelligence to "maximize profits for Microsoft, rather than for the benefit of humanity."

On Wednesday, The Wall Street Journal reported that the Securities and Exchange Commission was investigating whether OpenAI misled investors.

That investigation follows a shocking leadership shake-up at the company in November after Sam Altman was briefly ousted — with the company's board saying the CEO had not been "consistently candid in his communications." (He was reinstalled about two weeks later, and the board was shuffled up.)

The Journal reported on the SEC investigation after OpenAI nearly tripled its valuation to about $80 billion earlier this month following a deal to let employees cash out their shares.

OpenAI has also been hit with claims of copyright infringement.

In December, The New York Times filed a suit against OpenAI and Microsoft, alleging Times articles had been used to train chatbots. OpenAI hit back Wednesday, claiming in court filings that the Times had paid someone to "hack" its platforms and game them to generate deceptive evidence.

A group of writers, including Jonathan Franzen, John Grisham, and George R.R. Martin, has also filed copyright suits against OpenAI.

That's not all. UK regulators are looking into antitrust concerns surrounding OpenAI's relationship with Microsoft. In the US, the Federal Trade Commission launched an inquiry in January into OpenAI and four other tech giants to determine "their impact on the competitive landscape."

In July, the FTC also began investigating OpenAI over data and privacy concerns to determine whether the company was in violation of consumer-protection laws.

As legal issues keep cropping up, any losses on fronts including copyrights, competition, or user privacy could throw a wrench into OpenAI's work and give a leg up to the company's many competitors in the AI arms race.

OpenAI did not immediately respond to a request for comment.

Meanwhile, OpenAI continues to roll out products such as Sora — a tool that can generate eerily lifelike videos from inputted text. A web-search product to compete with Google is also in the works, The Information reported.

Axel Springer, Business Insider's parent company, has a global deal to allow OpenAI to train its models on its media brands' reporting.