OpenAI lawsuit dropped by Elon Musk amid new insider trading allegations

Tech billionaire Elon Musk has dropped a lawsuit he filed against OpenAI, the makers of ChatGPT, and is now facing a new claim from an investor related to his sale of Tesla shares. The lawsuit, which was filed earlier this year, was dropped just 24 hours before a hearing was scheduled in San Francisco for OpenAI’s motion to dismiss the case.

Musk had accused the company, which he co-founded, and its CEO Sam Altman of straying from their original mission of developing artificial intelligence for the betterment of society, instead focusing on profits. However, Musk has chosen not to comment on his decision to drop the case.

In addition to this, it was revealed on Tuesday that Musk is facing another lawsuit in Delaware brought by an institutional investor in Tesla. The Employees’ Retirement System of Rhode Island (ERSRI) alleges that Musk and his brother Kimbal, a director at Tesla, sold a combined $30 billion in shares between late 2021 and the end of 2022. The lawsuit claims that they did so before public announcements that would have caused the stock to decrease in value.

The suit also alleges that Musk sold shares at artificially inflated prices by concealing his plan to use the proceeds to purchase social media platform Twitter, which he later renamed X. It also claims that he sold Tesla stock while knowing that car deliveries were significantly lower than public projections.

Neither Musk nor Tesla have commented on the lawsuit. The suit also alleges poor governance and inappropriate actions, including diverting Tesla employees to work at X and causing Tesla to pay for advertising on Twitter.

Last month, Tesla shareholder Michael Perry filed a similar lawsuit accusing Musk of insider trading. Musk is already facing a regulatory investigation for his purchase of Twitter.

This news comes just two days before Tesla shareholders are set to vote on whether to reinstate Musk’s $56 billion pay package. In January, a Delaware judge nullified the package, finding that Musk had improperly controlled the process. We will continue to monitor the situation and provide updates as they become available.

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