Category: 3. Business

Elon Musk predicts Tesla’s Optimus robot will be a force for economic good — even if it ultimately eliminates much of the need for human labor.

While the humanoid robots are a production challenge and aren’t launching anytime soon, Tesla has demoed them handing out candy on Halloween, performing Kung Fu with Jared Leto, and dancing onstage at its recent shareholder meeting.

But Musk says he has an even bigger vision for the robots; he wants them to transform the economy.

“People often talk about eliminating poverty, giving everyone amazing medical care,” Musk said at the Thursday shareholder event. “There’s actually only one way to do that, and that’s with the Optimus robot.”

Musk later doubled down: “Optimus will actually eliminate poverty.”

Minutes earlier, the crowd cheered and broke out into chants of “Elon, Elon!” as shareholders approved Musk’s $1 trillion pay package. The Tesla CEO — who is the world’s richest person — will unlock up to $1 trillion in shares if Tesla achieves a series of lofty targets, including selling one million Optimus robots in the next decade.

Musk also said that Optimus would change life for incarcerated people at the meeting. Instead of physically jailing prisoners, Optimus could “follow you around and stop you from doing crime,” he said.

The robots would increase the global economy by a factor of 10, Musk said, or possibly even 100.

On Tesla’s third-quarter earnings call, Musk imagined a world of “sustainable abundance,” a goal outlined in Tesla’s Master Plan Part IV, with Optimus leading the way. An Optimus robot will have 5x the productivity of a human per year, Musk predicted, because it would be able to operate 24/7.

“There’s limit to much how much AI can do in terms of enhancing the productivity of humans, but there is not really a limit to AI that is embodied,” Musk said.

Musk also described how “sustainable abundance” and a robotic future will transform the economy in a recent interview with Joe Rogan.

“I came to the conclusion that the only way that the only way to get us out of the debt crisis and to prevent America from going bankrupt is AI and robotics,” Musk said.

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Robots like Optimus will make working “optional” in the future, Musk said.

“We’ll have, in a benign scenario, universal high income,” Musk said. “Anyone can have any products or services that they want. But there will be a lot of trauma and disruption along the way.”

Musk isn’t the only business leader touting the prospects of a universal basic income. Musk’s friend-turned-foe Sam Altman ran a pilot studying basic income in 2024. Facebook cofounder Chris Hughes has expressed support for UBI, as has eBay founder Pierre Omidyar.

There’s an economic irony here, Musk told Rogan.

“The capitalist implementation of AI and robotics, assuming it goes down the good path, is actually what results in the communist utopia,” he said.

What will humans do in Musk’s robotic future? Certainly not working, Musk wrote in an October X post.

“AI and robots will replace all jobs,” he wrote. “Working will be optional, like growing your own vegetables, instead of buying them from the store.”

Musk is no stranger to making bold, highly ambitious predictions — he’s called himself “pathologically optimistic” and said that he has “an issue with time.”

Tesla is currently in the design stage for Optimus, which Musk has said has proven challenging — especially when it comes to the robot’s hands. Musk said that he eventually expects to be able to sell Optimus for $20,000 to $30,000 once the robots hit volume production.

Thank you, I really appreciate the opportunity to speak to you today.¹

I am excited to be discussing stablecoins. This innovation has been unfairly treated as a pariah by some, but stablecoins are now an established and fast-growing part of the financial landscape. Putatively, stablecoins were originally intended to facilitate holding and trading cryptocurrency. But their proliferation has been aided by providing users with a stable store of value, a means of payment, and the ability to move capital quickly, irrespective of territorial borders.

Demand for dollars continues to be strong, so it’s no surprise that a more efficient means of accessing dollars has become increasingly popular. With the passage this year of the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), there is now a clear regulatory pathway in the U.S. for stablecoin issuers to broaden their reach and solidify stablecoins as a core part of the payment system. I believe economic research has some catching up to do. Economists meticulously study demand for dollar assets and consider how monetary policy may be affected, and the rapid growth of stablecoins affects the supply of loanable funds in the U.S. economy. I am encouraged that the Federal Reserve is taking steps to recognize the importance of stablecoins for the payment system; greater transparency and rising adoption should help us consider their effect on monetary policy as well.²

Stablecoins and Dollars

Essentially all stablecoins are denominated in dollars, and their success is at least partly due to the U.S. dollar’s enduring status as the world’s preferred currency.³ Stablecoins are also contributing to the dollar’s dominance by allowing an ever-growing share of people around the globe to hold assets and conduct transactions in the most trusted currency.

My thesis is that stablecoins are already increasing demand for U.S. Treasury bills and other dollar-denominated liquid assets by purchasers outside the Unted States and that this demand will continue growing. All else equal, this new demand lowers borrowing costs for the U.S. government. However, as a central banker, my focus is on what I believe may be a substantial and long-term force putting downward pressure on a crucial guideline for monetary policymakers known as r*. The neutral rate, or r*, is the policy interest rate that neither stimulates nor restricts economic activity when the economy is operating at its potential once the transitory effects of cyclical economic shocks have abated. There are several open questions with respect to the impact of stablecoins on U.S. monetary policy: How many assets will be managed by stablecoin issuers? Will the funds come from domestic or foreign sources, and where might substitution pull funds out of the banking system? What are the systemic risks related to runs on stablecoins? Since monetary policy must be forward looking, my colleagues and I would be best served exploring these topics now. In these remarks, I’ll focus on the consequences for monetary policy if stablecoin growth follows industry expectations. In short, stablecoins may become a multitrillion dollar elephant in the room for central bankers.

GENIUS Act

While I tend to view new regulations skeptically, I’m greatly encouraged by the GENIUS Act. This regulatory apparatus for stablecoins establishes a level of legitimacy and accountability congruent with holding traditional dollar assets. For the purposes of monetary policy, the most important aspect of the GENIUS Act is that it requires U.S.-domiciled issuers to maintain reserves backed on at least a one-to-one basis in safe and liquid U.S. dollar–denominated assets. These reserves can be held in bank deposits, short-term Treasurys, overnight repurchase agreements (repos) or reverse repos backed by U.S. Treasurys, or government money market funds. Depending on the source of funds used to invest in stablecoins, it may constitute new loanable funds in the U.S. economy or the overall amount of money available for borrowing and lending.

Even stablecoins outside the ambit of the GENIUS Act are likely to boost demand for Treasurys and other dollar-denominated assets. Stablecoins that do not comply with the GENIUS Act can invest reserves in a much broader range of assets but, to be viewed as reliable stores of value, will likely end up still investing substantially in U.S. dollar securities with minimal credit risk.

The inter-quartile range of private-sector estimates compiled by Federal Reserve staff roughly projects stablecoin uptake reaching between $1 trillion and $3 trillion by the end of the decade. For reference, the Fed grew its holdings of U.S. Treasury securities by just over $3 trillion during the latest round of quantitative easing in response to the COVID-19 pandemic. In total, under $7 trillion in Treasury bills are outstanding today. If these forecasts prove accurate, the magnitude of additional demand from stablecoins will be too large to ignore.

Potential for Broad Adoption

The innovation of public blockchains means that stablecoins can trade freely on rails that anyone in the world can use. This advancement represents potentially transformational change for consumers and businesses outside the U.S., particularly those in emerging market economies (EMEs) or even advanced foreign economies (AFEs) with burdensome restrictions on their payment systems. In many jurisdictions, low-friction payment rails are unavailable. Banking services to convert local currency or assets into dollars may be limited. Basic banking services themselves may be limited. And billions of people worldwide are subject to capital controls preventing convertibility and access to dollars. Globally, savers disproportionately favor dollar-denominated assets, and the ubiquity of capital controls is indicative of that revealed preference.

For stablecoins to enter widespread use, there must be a bridge from local fiat currencies into stablecoins. One can imagine many possible bridges, often already in use for existing dollar vehicles: Remittances from immigrants working in the U.S. might take the form of stablecoins; exporters may receive portions of their payment in stablecoins, perhaps undeclared if domiciled in jurisdictions that proscribe stablecoin use; people might trade local currency for cryptocurrency and then use that cryptocurrency to buy a stablecoin; or they might trade physical cash or goods or services or other assets for stablecoins. Stablecoins merely make it easier to traverse some of these bridges and increase incentives for doing so because once stablecoins are in circulation in an economy, they can circulate more freely and cheaply behind capital controls than traditional forms of dollar payments.⁴

These bridges will not be frictionless or have infinite capacity. For people who want to use dollars either as a store of value or a means of payment but are unable to do so, stablecoins make it incrementally easier. Stablecoins will not instantly obliterate barriers to dollar use, but they will perforate those barriers.

Reserve assets and currency provided by the U.S. are global public goods, but some jurisdictions prohibit their citizens’ enjoyment of them. Stablecoins might establish an easier means for the financially repressed to enjoy these global public goods and evade draconian restrictions on their finances. For individuals and businesses in many nations, especially those in which dollars are used for large purchases like homes, this also leapfrogs the challenges of high and unstable inflation or volatile exchange rates.

To be fair, stablecoin growth may not live up to the forecasts I cited earlier. Potential limits on yield and reward arrangements could limit adoption, particularly in open economies. The presumption that the crypto industry will grow at the prodigious rates of recent years cannot be taken for granted. But even with these considerations, it seems likely to me that the growth in stablecoin usage outside the U.S. will continue at a high rate.

One important distinction is that if domestically purchased stablecoins are financed with bank deposits, or foreign purchases are financed with existing dollar-denominated holdings, then that doesn’t affect the amount of loanable funds in the financial system. Further, there’s some risk that a flow of deposits out of the U.S. banking system and into stablecoins could disintermediate banks, affecting the transmission of monetary policy and stunting the velocity of money.

However, because GENIUS Act payment stablecoins do not offer yield and are not backed by federal deposit insurance, I see little prospect of funds broadly fleeing the domestic banking system. The real opportunity in stablecoins is to satiate untapped foreign appetite for dollar assets from savers in jurisdictions where dollar access is limited; by contrast, users in the U.S. and AFEs like the euro zone already freely access Treasurys, dollars, and other instruments that offer yield or deposit insurance. I therefore expect most demand for stablecoins to come from locales unable to access dollar-denominated saving instruments, boosting demand for dollar assets.

Implications for Monetary Policy

The supply–demand balance for loanable funds determines the neutral interest rate, or r*. As I discussed in a recent speech, I believe a range of different factors are putting downward pressure on r* and should be considered in formulating monetary policy.⁵ Some researchers have tried to estimate how much stablecoin growth might lower interest rates. In 2024, work by Marina Azzimonti and Vincenzo Quadrini estimated that if stablecoins are in widespread use and fully backed by U.S. securities, it could put as much as 40 basis points of downward pressure on interest rates.⁶

In estimating the effect of the projected growth of stablecoin issuance on demand for Treasurys and other highly liquid dollar assets, it is helpful to make a comparison to what most researchers believe was a large factor during an era of declining interest rates that began around the turn of the millennium—what former Fed Chairman Ben Bernanke called the global saving glut.⁷ In measuring the global saving glut, Bernanke reported that the annual U.S. current account deficit widened by 4 percentage points of U.S. gross domestic product (GDP) from 1996 to 2004.⁸

As I mentioned earlier, projections indicate between $1 trillion to $3 trillion of growth in stablecoins over the next several years. Adoption depends on regulatory clarity, institutional integration, and factors emanating from outside the U.S.—for instance, growth in EMEs, foreign exchange fluctuations, foreign political stability, and so forth.

An additional $2 trillion of foreign demand for dollar assets by the end of the decade would, all else equal, increase the current account deficit by roughly 1.2 percentage points of GDP over this period. This increase would represent about 30 percent of the size of the original global saving glut. More bullish stablecoin-uptake forecasts on the order of $4 trillion would double the size of this effect, making it about 60 percent the size of the original global saving glut. These magnitudes would matter for monetary policy.

Demand could obviously differ in domestic versus foreign adoption or miss these estimates. My goal is not to pinpoint the most accurate forecast, but to highlight the potential power of this channel. You can fill in your own numbers using this same method—my crystal ball is no clearer than others’. Moreover, the asset mix purchased by the rest of the world 20 years ago differs from that purchased by stablecoin issuers. The effects of a lower neutral rate might therefore manifest in financial markets differently than they did last time.

Even relatively conservative estimates of stablecoin growth imply an increase in the net supply of loanable funds in the economy that pushes down r*. If r* is lower, policy rates should also be lower than they would otherwise be to support a healthy economy. A failure of the central bank to cut rates in response to a reduction in r* is contractionary.

If a global stablecoin glut looks like a global saving glut, some other consequences may be replicated, too. For instance, a lower r* increases the odds that the zero lower bound (ZLB) binds in the future, limiting the ability of short-term interest rates to move down to provide accommodation but not restraining their ability to move up to restrict activity. Markets may expect policy to spend more time at the ZLB because of that inability to provide accommodation and get away from zero. That may make the fed funds rate more volatile to the upside with respect to other financial conditions, even as downside volatility remains muted by the ZLB, simulating elements of former Chairman Alan Greenspan’s “conundrum.”⁹

Moreover, if a global stablecoin glut is driven by flows out of foreign currencies and into the U.S. dollar, it will, all else equal, make the dollar stronger. Depending on the strength of this effect relative to other forces affecting the Fed’s price-stability and maximum-employment mandates, that might be something that monetary policy reacts to.

Finally, incremental dollarization may reduce the benefits of floating exchange rates. Exchange rates often function as shock absorbers, adjusting rapidly to changes in relative conditions across countries so that nominal prices don’t have to. If nominal prices are sticky and exchange rates are not, the cyclical distortions associated with those rigidities are less detrimental for the economy. Increased real price rigidity because exchange rates cannot adjust would intensify the volatility of global business cycles. And Fed policy will have a greater effect on foreign economic growth with greater dollarization, increasing business cycle synchronization. Whether this phenomenon would matter for the U.S. and not just for countries that dollarize a portion of their economies remains speculative.¹⁰

America’s capital markets are the world’s deepest, helping to support economic growth, fund new ideas, and allocate capital efficiently. However, our financial infrastructure, not unlike our physical infrastructure, could use a reboot. Stablecoins may well lead the way on this front, facilitating dollar holdings and payments domestically and abroad. While there has been extensive research on the topic since the advent of stablecoins a decade ago, the scope for rapid increases in issuance makes it now even more imperative to consider what widespread adoption may mean for monetary policy, both in the U.S. and abroad.

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1. The views expressed here are my own and are not necessarily those of my colleagues on the Federal Reserve Board or the Federal Open Market Committee. Return to text

2. See Board of Governors of the Federal Reserve System (2025), proceedings of the Payments Innovation Conference, streamed live on October 21, YouTube (Washington: Board of Governors). Return to text

3. For the list of stablecoins circulating, see the DeFiLlama website at https://defillama.com/stablecoins; at the time of writing, 99.6 percent of stablecoins were denominated in dollars. For more on the enduring global preference for dollars, see Carol Bertaut, Bastian von Beschwitz, and Stephanie Curcuru (2025), “The International Role of the U.S. Dollar – 2025 Edition,” FEDS Notes, (Washington: Board of Governors of the Federal Reserve System, July 18). Return to text

4. Although many countries have existing black markets for dollars, these are likely to be less preferred to stablecoins because of the difficulty of verifying and saving currency. Relative to stablecoins, physical cash is riskier, and both more difficult and costlier to store or move in large volumes. Moreover, many black market dollars trade at a premium because the amount of dollars available is limited. Return to text

5. See Stephen I. Miran (2025), “Nonmonetary Forces and Appropriate Monetary Policy,” speech delivered at the Economic Club of New York, New York, September 22. Return to text

6. See Marina Azzimonti and Vincenzo Quadrini (2024), “Digital Assets and the Exorbitant Dollar Privilege (PDF)” AEA Papers and Proceedings, vol. 114 (May), pp. 153–56. This paper and related work by the same authors—including the 2025 paper “Digital Economy, Stablecoins and the Global Financial System,” NBER Working Paper Series 34066 (Cambridge, Mass.: National Bureau of Economic Research, July)—expand on some of these ideas but do so in a model in which stablecoin issuers can choose to hold much less—or even none—of their assets in Treasury securities. The prediction on the interest rate depends on the fraction of reserves held in Treasury securities by stablecoin issuers. With a low enough fraction, the stablecoin steady-state interest rate can actually also be higher. However, such a pattern does not match what we observe from issuers or the guidelines in the GENIUS Act, and I therefore prefer to assume a high value of the fraction of reserves held in Treasury securities. It follows that the stablecoin steady-state interest rate is lower than the steady-state interest rate in which stablecoins are absent. Return to text

7. In his 2005 speech that coined the term and launched a thousand papers, then-Fed Governor Ben Bernanke estimated that the global saving glut began around 2001. See Ben S. Bernanke (2005), “The Global Saving Glut and the U.S. Current Account Deficit,” remarks delivered at the Sandridge Lecture, Virginia Association of Economists, Richmond, Virginia, March 10. Return to text

8. After peaking in 1995 at 7.91 percent, the 10-year yield fell to 4.92 percent in January 2001. Return to text

9. See Alan Greenspan (2005), testimony before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, February 16, 109th Cong. (Washington: U.S. Government Printing Office), quoted text in paragraph 23. Return to text

10. Caballero, Fahri, and Gourinchas (2017) note that once the ZLB for global interest rates is reached, the world economy becomes increasingly interdependent as countries can no longer use monetary policy to insulate their economies from world capital flows; see Ricardo J. Caballero, Emmanuel Farhi, and Pierre-Olivier Gourinchas (2017), “The Safe Assets Shortage Conundrum (PDF),” Journal of Economic Perspectives, vol. 31 (Summer), pp. 29–46. Return to text

This article first appeared on GuruFocus.

Microsoft (NASDAQ:MSFT) said it will supply more than 60,000 advanced Nvidia (NVDA) artificial intelligence chips to the United Arab Emirates under export licenses cleared by the U.S. Commerce Department.

The approval, issued in September, permits the transfer of Nvidia’s high-end GB300 Grace Blackwell processors under what officials called strict security and compliance conditions. The chips will be deployed across UAE data centers to expand cloud and AI infrastructure.

The development comes shortly after President Donald Trump said in a 60 Minutes interview that U.S. authorities would block shipments of the most advanced chips overseas, particularly to China. The UAE deal, however, falls under an earlier license granted with additional oversight.

The export agreement is linked to the UAE’s pledge to channel about $1.4 trillion into U.S.-based projects in AI and energy, a figure that far exceeds the Gulf nation’s annual GDP of roughly $540 billion.

Microsoft said the deliveries form part of its $15.2 billion regional technology investment and will support AI access from OpenAI, Anthropic, open-source developers, and its own cloud platforms already running over 21,000 Nvidia GPUs in the UAE.

This article first appeared on GuruFocus.

Thermo Fisher Scientific (NYSE:TMO) just announced a big win for shareholders a $5 billion stock buyback plan with no expiration date. That means the company can repurchase shares at its own pace, whenever the timing feels right.

Alongside that, Thermo Fisher is keeping things steady on the income side, maintaining its quarterly dividend at $0.43 per share.

It’s a confident move that signals the company’s strong balance sheet and steady cash flow. By buying back stock and sticking with its dividend, Thermo Fisher is showing it can balance growth investments with shareholder rewards a combo investors always like to see.

Sequoia Capital’s Roelof Botha was ousted by top lieutenants who lost confidence in his ability to keep Silicon Valley’s most powerful venture capital firm ahead of rivals.

Botha stepped down as managing partner of the group on Tuesday following an intervention from Alfred Lin, Pat Grady and Andrew Reed, said multiple people with knowledge of the matter.

The trio of senior partners had the blessing of the wider firm and Doug Leone, Sequoia’s former managing partner, said three of the people.

Their move came on the back of concerns about Botha’s management style, questions about Sequoia’s artificial intelligence investment strategy and follows high-profile clashes between senior figures at the firm, said the people.

The Financial Times spoke to 10 people close to the firm, including investors who have worked with Botha and the institutions that bankroll Sequoia, known as limited partners. His ousting was motivated by a belief that a new generation of leaders would better serve Sequoia’s LPs, they said.

One of those described the removal as a “revolt” against Botha’s “imperial style of leadership”, following a period of upheaval at one of Silicon Valley’s most successful and enduring firms.

“On an IQ level he is off the charts . . . But the heart of the matter is that Roelof is one of these people who always needs to be seen as the smartest guy in the room,” the person said, adding Botha’s emotional intelligence did not match his intellect.

“Roelof is a legendary investor, leader and human being,” Sequoia’s new leadership team told the FT. “He was part of the decision to empower the next generation, and he will continue to serve on boards and advise the partnership, alongside former stewards Doug [Leone] and Jim [Goetz].”

The trio of lieutenants took advantage of Sequoia’s unique governance, which allows partners to call a vote in the leadership at any point, said two people with knowledge of the arrangement.

The measure gives additional weighting to the longer-serving investors and is designed to prevent senior partners blocking the ascent of dealmakers beneath them, they added.

“The reason Sequoia has stayed Sequoia for 53 years is they have refused to cement themselves in hierarchy,” said one person with knowledge of Botha’s removal.

Grady and Lin will now run the firm, while Reed and Grady will co-lead Sequoia’s fund investing in more mature start-ups. Lin and another partner, Luciana Lixandru, will co-lead the firm’s early stage investment fund.

Botha, who has run its US and European business since 2017 and took over the whole firm in 2022, will remain as an adviser.

The 52-year old grandson of Roelof “Pik” Botha, the last foreign secretary under South Africa’s apartheid regime and later a member of Nelson Mandela’s first government, was hired to PayPal by Elon Musk early in his career.

He has led a string of investments, including in Instagram, YouTube and $30bn database management company MongoDB. Sequoia has returned more than $50bn to its US and European investors since 2017, said a person with knowledge of the matter.

Despite these successes, partners decided Lin, who has backed Airbnb, DoorDash and OpenAI, and Grady, behind investments in Snowflake, Zoom and ServiceNow, were better placed to lead Sequoia forward.

Under Botha, Sequoia has taken a more cautious approach to AI investment than some rivals. The firm invested a little more than $20mn in OpenAI in 2021, when the ChatGPT maker was valued at about $20bn, and has boosted that stake in subsequent rounds, said people with knowledge of the deals.

When OpenAI raised funds at a $260bn valuation earlier this year, Sequoia offered to invest $1bn, but ultimately was given a stake of a fraction of that, according to people with knowledge of that deal.

Sequoia also holds a stake in Musk’s xAI, but has focused on early investments in AI application companies such as Harvey, Sierra and Glean — an approach also advocated by Grady.

Botha also grappled with major conflicts during his tenure. Last month, the FT reported Sequoia’s chief operating officer Sumaiya Balbale left the firm in August after complaining that colleague Shaun Maguire’s X posts about New York’s mayor-elect Zohran Mamdani were Islamophobic.

Botha reminded Maguire — a vital Musk ally — of the need to consider Sequoia’s reputation, but otherwise refused to discipline him, citing the firm’s long-standing position that all partners had a right to free speech. Balbale left after considering her position untenable, according to those with knowledge of the incident.

Last year, a fight over board seats at Swedish fintech Klarna exposed a schism between Botha and Michael Moritz, who had previously led the firm and backed some of its most successful companies.

Botha threw his weight behind an effort to vote Moritz out as Klarna chair, said people familiar with the situation. The effort backfired, with Moritz remaining in post and Sequoia’s Matthew Miller being ousted as a Klarna director instead.

Early in his tenure, Botha also split from Sequoia’s lucrative Chinese business. Geopolitical pressure gave the firm little choice, but the decision nonetheless impacted returns.

“I do think the last five years have been super intense, it’s really hard to lead a firm through all of that,” said one long-standing Sequoia LP.

Botha was also hurt by other strategic decisions of his own, said multiple people with knowledge of the matter.

This included the announcement, as Leone was handing over the reins, of a new “evergreen” fund to hold on to Sequoia’s best companies after they went public, a point at which VCs typically cash out.

The timing was disastrous: the fund was launched at the peak of a tech investment boom in 2022 and the valuations of start-ups which Sequoia had clung on to cratered.

Public market valuations have since rebounded, and the fund has generated nearly $7bn in gains on where the companies were priced when they were rolled in, according to a person with knowledge of Sequoia’s financials. But the decision angered some LPs who were given little option but to participate in the new fund, said people familiar with the matter.

“The evergreen structure came at the wrong time, they put a lot of strain on LPs and didn’t return money at the top of the market,” said a Silicon Valley VC.

It is unclear if Lin and Grady intend to move the firm in a new direction. The pair are “very warm, very capable and clever”, said the long-standing Sequoia LP, adding they are also “sitting on a very hot seat”.

Additional reporting by Stephen Morris in San Francisco

OpenAI is facing seven lawsuits claiming ChatGPT drove people to suicide and harmful delusions even when they had no prior mental health issues.

The lawsuits filed Thursday in California state courts allege wrongful death, assisted suicide, involuntary manslaughter and negligence. Filed on behalf of six adults and one teenager by the Social Media Victims Law Center and Tech Justice Law Project, the lawsuits claim that OpenAI knowingly released GPT-4o prematurely, despite internal warnings that it was dangerously sycophantic and psychologically manipulative. Four of the victims died by suicide.

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EDITOR’S NOTE — This story includes discussion of suicide. If you or someone you know needs help, the national suicide and crisis lifeline in the U.S. is available by calling or texting 988.

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The teenager, 17-year-old Amaurie Lacey, began using ChatGPT for help, according to the lawsuit filed in San Francisco Superior Court. But instead of helping, “the defective and inherently dangerous ChatGPT product caused addiction, depression, and, eventually, counseled him on the most effective way to tie a noose and how long he would be able to “live without breathing.’”

“Amaurie’s death was neither an accident nor a coincidence but rather the foreseeable consequence of OpenAI and Samuel Altman’s intentional decision to curtail safety testing and rush ChatGPT onto the market,” the lawsuit says.

OpenAI called the situations “incredibly heartbreaking” and said it was reviewing the court filings to understand the details.

Another lawsuit, filed by Alan Brooks, a 48-year-old in Ontario, Canada, claims that for more than two years ChatGPT worked as a “resource tool” for Brooks. Then, without warning, it changed, preying on his vulnerabilities and “manipulating, and inducing him to experience delusions. As a result, Allan, who had no prior mental health illness, was pulled into a mental health crisis that resulted in devastating financial, reputational, and emotional harm.”

“These lawsuits are about accountability for a product that was designed to blur the line between tool and companion all in the name of increasing user engagement and market share,” said Matthew P. Bergman, founding attorney of the Social Media Victims Law Center, in a statement.

OpenAI, he added, “designed GPT-4o to emotionally entangle users, regardless of age, gender, or background, and released it without the safeguards needed to protect them.” By rushing its product to market without adequate safeguards in order to dominate the market and boost engagement, he said, OpenAI compromised safety and prioritized “emotional manipulation over ethical design.”

In August, parents of 16-year-old Adam Raine sued OpenAI and its CEO Sam Altman, alleging that ChatGPT coached the California boy in planning and taking his own life earlier this year.

“The lawsuits filed against OpenAI reveal what happens when tech companies rush products to market without proper safeguards for young people,” said Daniel Weiss, chief advocacy officer at Common Sense Media, which was not part of the complaints. “These tragic cases show real people whose lives were upended or lost when they used technology designed to keep them engaged rather than keep them safe.”