SAN FRANCISCO, July 11 — The technical reality for OpenAI is that its legal exposure is growing at a pace that might almost rival its model training runs. The company, which began life as a nonprofit artificial intelligence research outfit on December 11, 2015, with a $1 billion pledge from founders including Elon Musk and Sam Altman, now faces a fresh lawsuit from Apple that adds to an already crowded docket of copyright disputes.
The Apple lawsuit, the detail that matters here, compounds the legal risk the company carries as it pushes into hardware development. OpenAI is understood to be working on potential gadgets, including a wearable AI device, a move that places it in more direct competition with the very tech giants that have bankrolled its ascent.
That ascent has been, under the hood, a staggering financial story. Microsoft’s involvement began with a $1 billion investment announced on July 22, 2019, the same year OpenAI transitioned from its original nonprofit structure to a “capped-profit” model. Further injections followed: an additional $2 billion in 2021, and a $10 billion commitment in January 2023, bringing the total from Microsoft alone to over $13 billion.
By February 2024, OpenAI’s valuation had reached $80 billion.
The product pipeline
The company’s technical output has been relentless. GPT-1 landed in June 2018, followed by GPT-2 in February 2019, GPT-3 in June 2020, and GPT-4 in March 2023. The image generation model DALL-E arrived in January 2021, with DALL-E 3 following in October 2023.
But the product that changed the public conversation was ChatGPT, a conversational AI launched on November 30, 2022. It reached 100 million users by January 2023 — a rate of adoption that caught even the company’s backers off guard.
As ever with rapid deployment, the legal framework has struggled to keep pace. The New York Times filed a lawsuit against OpenAI in December 2023, alleging copyright infringement over the use of its articles to train the company’s models. That case remains active.
The Apple lawsuit now adds another front to the company’s legal defence, though the specifics of the claim have not been detailed in public filings.
What to watch next
The intersection of AI hardware development and mounting copyright litigation will be the story to track. OpenAI’s move into physical devices represents a strategic bet that the company can translate its software dominance into a hardware ecosystem, but the legal bills — and the risk of adverse rulings — are mounting. For a firm that started with a lofty nonprofit mission and now carries an $80 billion valuation, the tension between its founding ideals and its current position has never been sharper.
Sources
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