Tag Archives: Business

Elon Musk sues OpenAI and Sam Altman for allegedly ditching non-profit mission

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OpenAI co-founder Elon Musk has sued the company, his fellow co-founders, associated businesses and unidentified others. He claims that, by chasing profits, they’re violating OpenAI’s status as a non-profit and its foundational contractual agreements to develop AI “for the benefit of humanity.”

The suit alleges that OpenAI has become a “closed-source de facto subsidiary” of Microsoft, which has invested $13 billion and holds a 49 percent stake. Microsoft uses OpenAI tech to power generative AI tools such as Copilot.

According to the filing, under OpenAI’s current board, it is allegedly developing and refining an artificial general intelligence (AGI) “to maximize profits for Microsoft, rather than for the benefit of humanity. This was a stark betrayal of the Founding Agreement.”

The suit defines AGI as "a machine having intelligence for a wide variety of tasks like a human." Musk argues in the suit that GPT-4, which is purportedly "better at reasoning than average humans," is tantamount to AGI and is "a de facto Microsoft proprietary algorithm."

Musk has long expressed concerns over AGI. He claims the theoretical tech posits "a grave threat to humanity," particularly "in the hands of a closed, for-profit company like Google."

According to the filing, OpenAI CEO Sam Altman and fellow co-founder Greg Brockman persuaded Musk to help them start the non-profit and to fund its early operations in a bid to counter Google's advancements in the AGI space with DeepMind. He noted that their initial agreement called for OpenAI's tech to be "freely available" to the public. Musk claims to have donated $44 million to the non-profit between 2016 and 2020 (he stepped down as an OpenAI board member in 2018). As TechCrunch reports, Musk previously said he was offered a stake in OpenAI's for-profit subsidiary, but rejected it due to "a principled stand."

Muskl, of course, has some skin in the game. Since the public debut of OpenAI's ChatGPT in November 2022, there's been a battle between tech giants to offer the best generative AI tools. Musk joined that rat race when his AI company, xAI, rolled out ChatGPT rival Grok to Premium+ subscribers on his X social network last year.

When Altman swiftly returned to power after OpenAI's board shockingly fired him in November, he's said to have appointed a new group of directors that is less technically minded and more business-focused. Microsoft was appointed as a non-voting observer. “The new board consisted of members with more experience in profit-centric enterprises or politics than in AI ethics and governance,” the lawsuit alleges.

The suit accuses the defendants of breach of contract, breach of fiduciary duty and unfair business practices. Musk is seeking a jury trial and a ruling that forces OpenAI to stick to its original non-profit mission. He also wants it to be banned from monetizing tech it developed as a non-profit for the benefit of OpenAI leadership as well as Microsoft and other partners.

Competition regulators in the US, the UK and European Union are said to be examining OpenAI's partnership with Microsoft. It was reported this week that the Securities and Exchange Commission is investigating whether OpenAI misled investors. Several news organizations have sued OpenAI and Microsoft as well, alleging that ChatGPT repurposes their work "verbatim or nearly verbatim" without attribution, infringing upon their copyright in the process.

In a couple of internal memos seen by Bloomberg, OpenAI said it "categorically disagrees" with the lawsuit Musk has filed. Chief Strategy Officer Jason Kwon denied that OpenAI has become a "de facto subsidiary" of Microsoft and said that Musk's claims "may stem from [his] regrets about not being involved with the company today." Altman also said in another memo that Musk is his hero and that he misses the person he knew who competed with others by building better technology.

Update, March 02, 2023, 1:47AM ET: This story has been updated to include OpenAI's internal memos about the lawsuit.

This article originally appeared on Engadget at https://www.engadget.com/elon-musk-sues-openai-and-sam-altman-for-allegedly-ditching-non-profit-mission-160722736.html?src=rss

More news organizations sue OpenAI and Microsoft over copyright infringement

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Legal claims are starting to pile up against Microsoft and OpenAI, as three more news sites have sued the firms over copyright infringement, The Verge reported. The Intercept, Raw Story and AlterNet filed separate lawsuits accusing ChatGPT of reproducing news content "verbatim or nearly verbatim" while stripping out important attribution like the author's name.

The sites, all represented by the same law firm, said that if ChatGPT trained on copyright material, it "would have learned to communicate that information when providing responses." Raw Story and AlterNet added that OpenAI and Microsoft must have known that the chatbot would be less popular and generate lower revenue if "users believed that ChatGPT responses violated third-party copyrights." 

The news organizations note in the lawsuit that OpenAI offers an opt-out system for website owners, meaning that the company must be aware of potential copyright infringement. Microsoft and OpenAI have also said that they'll defend customers against legal claims around copyright infringement that might arise from using their products, and even pay for incurred costs.

Late last year, The New York Times sued OpenAI and Microsoft for copyright infringement, saying it "seeks to hold them responsible for the billions of dollars in statutory and actual damages". OpenAI asked a court to dismiss that claim, saying the NYT took advantage of a ChatGPT bug that made it recite articles word for word.

The companies also face lawsuits from multiple non-fiction authors accusing them of "massive and deliberate theft of copyrighted works," and by comedian Sarah Silverman over similar claims. 

This article originally appeared on Engadget at https://www.engadget.com/more-news-organizations-sue-openai-and-microsoft-over-copyright-infringement-061103178.html?src=rss

More news organizations sue OpenAI and Microsoft over copyright infringement

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Legal claims are starting to pile up against Microsoft and OpenAI, as three more news sites have sued the firms over copyright infringement, The Verge reported. The Intercept, Raw Story and AlterNet filed separate lawsuits accusing ChatGPT of reproducing news content "verbatim or nearly verbatim" while stripping out important attribution like the author's name.

The sites, all represented by the same law firm, said that if ChatGPT trained on copyright material, it "would have learned to communicate that information when providing responses." Raw Story and AlterNet added that OpenAI and Microsoft must have known that the chatbot would be less popular and generate lower revenue if "users believed that ChatGPT responses violated third-party copyrights." 

The news organizations note in the lawsuit that OpenAI offers an opt-out system for website owners, meaning that the company must be aware of potential copyright infringement. Microsoft and OpenAI have also said that they'll defend customers against legal claims around copyright infringement that might arise from using their products, and even pay for incurred costs.

Late last year, The New York Times sued OpenAI and Microsoft for copyright infringement, saying it "seeks to hold them responsible for the billions of dollars in statutory and actual damages". OpenAI asked a court to dismiss that claim, saying the NYT took advantage of a ChatGPT bug that made it recite articles word for word.

The companies also face lawsuits from multiple non-fiction authors accusing them of "massive and deliberate theft of copyrighted works," and by comedian Sarah Silverman over similar claims. 

This article originally appeared on Engadget at https://www.engadget.com/more-news-organizations-sue-openai-and-microsoft-over-copyright-infringement-061103178.html?src=rss

Nintendo lawsuit accuses Switch emulator creators of ‘piracy at a colossal scale’

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Nintendo has filed a lawsuit against the creators of a popular Switch emulator called Yuzu, which gives users a way to play games developed for the platform on their PCs and Android devices. In the lawsuit shared by Game File's Stephen Totilo, the company argued that Yuzu violates the anti-circumvention and anti-trafficking provisions of the Digital Millennium Copyright Act (DMCA). 

Nintendo explained that it protects its games with encryption and other security features meant to prevent people from playing pirated copies. Yuzu has the capability to defeat those security measures and to decrypt Nintendo games. "[W]ithout Yuzu's decryption of Nintendo's encryption, unauthorized copies of games could not be played on PCs or Android devices," the company wrote in its complaint. 

It's illegal to "circumvent technological measures put into place by copyright owners to protect against unlawful access to and copying of copyrighted works" under the DMCA, Nintendo continued. And distributing "software primarily designed to circumvent technological measures" also constitutes unlawful trafficking. The defendants are, thus, "facilitating piracy at a colossal scale," the lawsuit argued. This case could set a precedent for future lawsuits against emulators, which aren't illegal in and of them themselves. As Ars Technica notes, Nintendo's arguments are calling their very nature unlawful. 

To illustrate how much Yuzu has affected its business, Nintendo revealed in its complaint that The Legend of Zelda: Tears of the Kingdom was illegally distributed a week and a half before its official release. It was apparently downloaded over a million times from pirated websites, which specifically noted that people can play the game file through Yuzu. The company also mentioned that Yuzu's creators are making money from their emulator. They're getting around $30,000 a month from their Patreon supporters and have earned around $50,000 from the paid version of their software on Google Play, so far. 

Nintendo is asking the court to stop Yuzu's creators from promoting and distributing the software. It's also asking for an unspecified amount in "equitable relief and damages."

This article originally appeared on Engadget at https://www.engadget.com/nintendo-lawsuit-accuses-switch-emulator-creators-of-piracy-at-a-colossal-scale-093157736.html?src=rss

Nintendo lawsuit accuses Switch emulator creators of ‘piracy at a colossal scale’

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Nintendo has filed a lawsuit against the creators of a popular Switch emulator called Yuzu, which gives users a way to play games developed for the platform on their PCs and Android devices. In the lawsuit shared by Game File's Stephen Totilo, the company argued that Yuzu violates the anti-circumvention and anti-trafficking provisions of the Digital Millennium Copyright Act (DMCA). 

Nintendo explained that it protects its games with encryption and other security features meant to prevent people from playing pirated copies. Yuzu has the capability to defeat those security measures and to decrypt Nintendo games. "[W]ithout Yuzu's decryption of Nintendo's encryption, unauthorized copies of games could not be played on PCs or Android devices," the company wrote in its complaint. 

It's illegal to "circumvent technological measures put into place by copyright owners to protect against unlawful access to and copying of copyrighted works" under the DMCA, Nintendo continued. And distributing "software primarily designed to circumvent technological measures" also constitutes unlawful trafficking. The defendants are, thus, "facilitating piracy at a colossal scale," the lawsuit argued. This case could set a precedent for future lawsuits against emulators, which aren't illegal in and of them themselves. As Ars Technica notes, Nintendo's arguments are calling their very nature unlawful. 

To illustrate how much Yuzu has affected its business, Nintendo revealed in its complaint that The Legend of Zelda: Tears of the Kingdom was illegally distributed a week and a half before its official release. It was apparently downloaded over a million times from pirated websites, which specifically noted that people can play the game file through Yuzu. The company also mentioned that Yuzu's creators are making money from their emulator. They're getting around $30,000 a month from their Patreon supporters and have earned around $50,000 from the paid version of their software on Google Play, so far. 

Nintendo is asking the court to stop Yuzu's creators from promoting and distributing the software. It's also asking for an unspecified amount in "equitable relief and damages."

This article originally appeared on Engadget at https://www.engadget.com/nintendo-lawsuit-accuses-switch-emulator-creators-of-piracy-at-a-colossal-scale-093157736.html?src=rss

Appeals court overturns $1 billion copyright lawsuit against Cox

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An appeals court has blocked a $1 billion copyright verdict from 2019 against US internet service provider Cox Communications and ordered a retrial, Arts Technica has reported. A three-judge panel ruled unanimously that Cox didn't profit directly from its users' piracy, rebutting claims from Sony, Universal and Warner. 

The judges did affirm the original jury's finding of willful contributory infringement from the trial, first announced back in 2018. To that effect, they ordered a new damages trial that may reduce the size of the award.

"We reverse the vicarious liability verdict and remand for a new trial on damages because Cox did not profit from its subscribers' acts of infringement, a legal prerequisite for vicarious liability," the panel wrote. It added that "no reasonable jury could find that Cox received a direct financial benefit from its subscribers' infringement of Plaintiffs' copyrights." 

Cox allegedly refused to take "reasonable measures" to fight piracy, according to the original allegations. Internet providers are supposed to terminate the accounts of offending users, but the ISP only conducted temporary disconnections and warned some users more than 100 times. The labels claimed it even instituted a cap on accepted copyright complaints and cut back on anti-piracy staffers.

However, the judges said that Sony offered no causal connection between infringement and higher revenues for Cox. "No evidence suggest that customers chose Cox's Internet service, as opposed to a competitor's, because of any knowledge or expectation about Cox's lenient response to infringement." 

Under the US Digital Millennium Copyright Act (DMCA) and EU rules, ISPs enjoy "safe harbor" protections that shield them from liability for user actions. However, that only holds if they comply with specific requirements and address copyright violations promptly — and in this case, Cox didn't do that, the judges said. 

"The jury saw evidence that Cox knew of specific instances of repeat copyright infringement occurring on its network, that Cox traced those instances to specific users, and that Cox chose to continue providing monthly Internet access to those users... because it wanted to avoid losing revenue," the ruling states. The case is now headed back to a US District court.

This article originally appeared on Engadget at https://www.engadget.com/appeals-court-overturns-1-billion-copyright-lawsuit-against-cox-130810427.html?src=rss

FuboTV accuses Disney, Fox and Warner Bros. of antitrust practices over joint streaming service

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FuboTV, a streaming platform dedicated to live sports, has filed an antitrust lawsuit against Disney, Fox and Warner Bros. Discovery, accusing the companies of staging "a years-long campaign" to hamper its business. The company's lawsuit comes shortly Disney-owned ESPN, Fox and Warner Bros. Discovery announced that they're launching a sports streaming service in the fall of 2024, which will give subscribers access to sporting events from the networks they own. FuboTV's complaint argued that the companies are stealing its playbook and that the launch of their joint venture will destroy competition and lead to price inflation for consumers. 

Further, FuboTV alleged that the launch of the defendants' streaming service is but "the latest coordinated step" in their "campaign to eliminate competition in the sports-first streaming market" and in their effort to block its business. The streaming service said the defendants charge it content licensing rates that are 30 to 50 percent higher than the rates they charge other distributors. They also allegedly force FuboTV to bundle "dozens of expensive non-sports channels" that "customers do not want" with their sports offerings as a condition of licensing their content. All these increase the costs FuboTV must pass onto its customers, the company explained. 

FuboTV also claimed that the companies in question have prevented it from being able to offer streaming products subscribers would like, including content available on Hulu. Plus, the defendants allegedly impose a limitation on how many subscribers can buy their content package, ensuring that FuboTV can't make a dent in the market. 

"Each of these companies has consistently engaged in anticompetitive practices that aim to monopolize the market, stifle any form of competition, create higher pricing for subscribers and cheat consumers from deserved choice," FuboTV CEO David Gandler said in a statement. "By joining together to exclusively reserve the rights to distribute a specialized live sports package, we believe these corporations are erecting insurmountable barriers that will effectively block any new competitors from entering the market. This strategy ensures that consumers desiring a dedicated sports channel lineup are left with no alternative but to subscribe to the Defendants' joint venture."

Engadget has reached out to all three defendants: ESPN has declined to comment, while Fox and Warner Bros. Discovery have yet to get back to us. FuboTV is asking the court to prohibit the joint venture's launch or to impose restrictions, such as economic parity of licensing terms, on the defendants.

This article originally appeared on Engadget at https://www.engadget.com/fubotv-accuses-disney-fox-and-warner-bros-of-antitrust-practices-over-joint-streaming-service-064140676.html?src=rss

Walmart is buying smart TV maker Vizio for $2.3 billion

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Walmart is buying Smart TV manufacturer Vizio for $2.3 billion, the retail giant announced as part of its latest earnings report. While Walmart has long been one of the major sellers of Vizio TVs, the company says the acquisition "enables a profitable advertising business that is rapidly scaling" via the company's SmartCast OS. The deal is still subject to regulatory approval. 

Vizio sells solid mid-range TVs, most equipped with its SmartCast operating system that supports free ad-supported content. The company recently refreshed its lineup with a more intuitive user interface and faster startups and app switching. 

Walmart, meanwhile, prominently features the brand on its shelves (along with TCL), as anyone who has gone there lately has probably noticed. The retailer already has its own TV house brand, ONN, but those sets are very much on the low end, usually selling for under $500. 

More importantly, the companies plan to combine their respective ad businesses. Walmart already has a $2.7 billion ad business, but Vizio would increase its access to key consumer info like viewership data. It would also effectively give Walmart more eyeballs for its ads — for instance, companies that sell goods at Walmart could also run ads on Vizio TVs, all of which could be tracked by the retailer. 

"We believe the combination of these two businesses would be impactful as we redefine the intersection of retail and entertainment," said Walmart VP Seth Dallaire. "Our technology will help bring a scaled, connected TV advertising platform to Walmart Connect," added Vizio CEO William Wang. 

The acquisition may also be a counter to Amazon's in-house Fire TV business, both in terms of television retailing and advertising, as The Wall Street Journal reported last week. Amazon has one of the largest ad businesses in the US behind Alphabet and Meta, and smart TVs help it gather personalized consumer data for targeted advertising. 

This article originally appeared on Engadget at https://www.engadget.com/walmart-is-buying-smart-tv-maker-vizio-for-23-billion-130725953.html?src=rss

The EU is reportedly set to hit Apple with a $539 million fine in antitrust probe

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Apple may be facing a fine of roughly $539 million (500 million euros) from the EU and a ban on its alleged anti-competitive App Store practices for music streaming services, according to FT. The publication, which cites five unnamed sources with knowledge of the matter, reports that the European Commission will announce its ruling early next month.

The probe stems from a 2019 antitrust complaint filed by Spotify and is focused on App Store rules that at the time prevented developers from directing customers to alternative subscription options outside the app, which could be cheaper as they wouldn’t have to compensate for Apple’s 30 percent fee. Apple later loosened these restrictions. According to FT, the Commission will say Apple broke EU antitrust law and created “unfair trading conditions” for its rivals with the App Store’s “anti-steering obligations.”

This article originally appeared on Engadget at https://www.engadget.com/the-eu-is-reportedly-set-to-hit-apple-with-a-539-million-fine-in-antitrust-probe-162106781.html?src=rss

Amazon, one of the world’s largest employers, has called the National Labor Relations Board ‘unconstitutional’

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Amazon, a company that employs more than 1.54 million people, has claimed that the National Labor Relations Board Relations Board (NLRB), the federal agency responsible for protecting the rights of workers, is unconstitutional. Amazon made the claim in a legal document filed on Thursday as part of a case in which prosecutors from the Board have accused the e-commerce giant of discrimination against workers at an Amazon warehouse in Staten Island who had voted to unionize, according to The New York Times.

Amazon is not the first company to challenge the Board’s constitutionality. Last month, Elon Musk’s SpaceX sued the NLRB after the agency accused the company of unlawfully firing eight employees and called the agency “unconstitutional” in the lawsuit. Weeks later, grocery chain Trader Joe’s, which the NLRB accused of union-busting, said that the NLRB’s structure and organization was “unconstitutional,” Bloomberg reported. And in separate lawsuits, two Starbucks baristas have independently challenged the agency’s structure as they sought to dissolve their unions.

Amazon’s claim is similar to the existing claims filed by SpaceX and Trader Joe’s. In the lawsuit, the company’s lawyers argued that “the structure of the N.L.R.B. violates the separation of powers” by “impeding the executive power provided for in Article II of the United States Constitution.” In addition, Amazon claimed that the NLRB’s hearings “can seek legal remedies beyond what’s allowed without a trial by jury.”

Seth Goldstein, a lawyer who represents unions in the Amazon and Trader Joe’s cases told Reuters that these challenges to the NLRB increase the chances of the issue reaching the Supreme Court. And they might cause employers to stop bargaining with unions in hope that courts will finally strip the federal agency of its powers, Goldstein said. Amazon has a contentious history with the NLRB, which said the company broke federal labor laws last year. 

This article originally appeared on Engadget at https://www.engadget.com/amazon-one-of-the-worlds-largest-employers-has-called-the-national-labor-relations-board-unconstitutional-011519013.html?src=rss