Elon Musk Accused of Insider Trading Again and Settles Open AI Lawsuit | Business Update

Elon Musk has decided to withdraw a lawsuit he had filed against ChatGPT creator Open AI, and at the same time, he is now facing a new investor claim related to his sale of Tesla shares.

The billionaire, who initiated the lawsuit earlier this year, chose to drop the case just a day before a San Francisco judge was scheduled to hear Open AI’s motion to dismiss the lawsuit.

In his complaint, Musk accused the company, which he helped establish, and its CEO Sam Altman of deviating from their original goal of developing artificial intelligence for the betterment of humanity rather than for profit.

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Musk, who has his own AI ventures, has been a vocal critic of the company’s utilization of artificial intelligence. He recently criticized Apple’s plans to integrate AI, including ChatGPT, into its devices, hinting at a potential ban within his own companies due to security concerns.

He has not provided a reason for his decision to drop the lawsuit.

It was disclosed on Tuesday that Musk is facing a separate lawsuit in Delaware from an institutional investor in Tesla.

The Employees’ Retirement System of Rhode Island (ERSRI) alleges that he and his brother Kimbal, a director at the electric car company, unlawfully sold a total of $30 billion (£23.5 billion) in shares between late 2021 and the end of 2022.

The lawsuit asserts that they sold the shares before news that would have caused the stock to decline in value became public.

The claim accuses Musk of selling shares at artificially inflated prices and hiding his intention to use the proceeds to purchase the social media platform Twitter, later renamed X.

It also alleges that Musk sold Tesla stock when he was aware that Tesla car deliveries were significantly lower than public projections.

Musk and Tesla have not commented on the lawsuit, which also includes claims of poor governance and inappropriate actions such as diverting Tesla employees to work at X and causing Tesla to pay for advertising on Twitter.

Tesla shareholder Michael Perry recently filed a similar lawsuit alleging insider trading by Musk, who is also under regulatory investigation for his Twitter purchase.

The news of the new lawsuit came just before Tesla shareholders are set to vote on reinstating Musk’s $56 billion pay package that was nullified by a Delaware judge in January due to improper control of the process.