Tech billionaire Elon Musk has filed for a preliminary injunction against OpenAI, several of its key figures, and its investor Microsoft. The filing, submitted in the U.S. District Court for the Northern District of California, accuses the defendants of engaging in anticompetitive behavior and other improper activities.
The motion targets OpenAI CEO Sam Altman, President Greg Brockman, LinkedIn co-founder Reid Hoffman, former OpenAI board member Dee Templeton, and Microsoft. Musk’s attorneys allege that these parties have acted unlawfully to the detriment of competitors, including Musk’s AI venture, xAI. Key allegations include:
- Discouraging investors from supporting rivals like xAI.
- Misusing sensitive information obtained through OpenAI’s relationship with Microsoft.
- Altering OpenAI’s governance structure to benefit for-profit entities.
- Conducting business with organizations in which the defendants hold financial interests.
Musk’s attorneys argue that an injunction is necessary to prevent “irreparable harm,” claiming that OpenAI has strayed from its original nonprofit mission.
Background and Allegations
OpenAI was founded in 2015 as a nonprofit with the goal of ensuring AI research benefits all of humanity. In 2019, it transitioned to a “capped-profit” model, and recent developments suggest it is moving towards becoming a fully for-profit corporation. Musk, one of OpenAI’s co-founders, departed the company in 2018 over disagreements about its direction.
Musk’s motion claims that OpenAI’s transition has compromised its original values. Specifically, the filing accuses OpenAI of extracting commitments from investors in its funding rounds to avoid supporting competitors like xAI. A recent Financial Times report corroborated this, revealing that OpenAI’s funding agreements may include clauses barring investments in rival firms.
Financial Stakes and Market Competition
Despite these alleged barriers, xAI has successfully raised substantial capital, recently closing a $5 billion funding round with backing from prominent firms like Andreessen Horowitz and Fidelity. xAI has positioned itself as a formidable competitor in the AI space, leveraging its Grok AI model across platforms, including Musk’s social network X (formerly Twitter).
Musk’s attorneys also claim OpenAI and Microsoft have shared proprietary information improperly and engaged in self-dealing. For example, OpenAI’s selection of Stripe as its payment processor is cited as problematic due to Altman’s significant financial interests in the company.
Microsoft’s Role
Microsoft, OpenAI’s largest investor, has poured approximately $13 billion into the company, securing a 49% stake in its earnings. Musk’s filing argues that this deep partnership has enabled Microsoft to influence OpenAI’s operations, potentially violating antitrust regulations. Hoffman and Templeton, with roles at both Microsoft and OpenAI, are also alleged to have facilitated questionable agreements between the two entities.
Musk’s Legal Strategy
Musk’s attorneys emphasize the need to maintain OpenAI’s nonprofit character and prevent further transactions they believe harm the public interest and marketplace competition. They warn that allowing OpenAI to continue on its current trajectory could result in investor losses and make reversing the organization’s structural changes nearly impossible.
“Plaintiffs and the public need a pause,” the filing states, advocating for an injunction to preserve OpenAI’s founding mission.
OpenAI’s Response
An OpenAI spokesperson dismissed Musk’s claims, stating, “Elon’s fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit.” OpenAI had previously sought to have Musk’s suit dismissed as unfounded.
This motion marks the latest chapter in Musk’s legal battle with OpenAI, underscoring his dissatisfaction with the organization’s transformation since his departure.
The post has been updated with a statement from OpenAI.
