Elon Musk seeks court order to stop OpenAI’s for-profit shift
Elon Musk, his AI business xAI, and former OpenAI board member Shivon Zilis have filed a motion seeking a preliminary injunction against OpenAI. The petition attempts to prevent OpenAI from becoming a completely for-profit organization, claiming that the company is forcing investors to avoid backing competitors such as xAI.According to CNBC, the case shows rising tensions in the AI field, calling into question fair competition, corporate governance, and the ethical balance between profit and innovation in artificial intelligence.
The most recent court filings represent a dramatic escalation in the legal dispute between Elon Musk, OpenAI, its CEO Sam Altman, and key investors including Reid Hoffman and Microsoft.
Musk initially launched a case against OpenAI in March 2024 in a San Francisco state court, but then dropped it, preferring to sue in federal court.
In the federal complaint, Musk's attorneys, lead by Marc Toberoff, claim that OpenAI violated federal racketeering laws.
This exacerbates the argument by raising worries about one of the most renowned AI companies' governance and competitive tactics.
In mid-November, Elon Musk and his legal team updated their federal complaint to include claims that Microsoft and OpenAI violated antitrust rules. The allegations revolve around OpenAI pressuring investors to promise not to support rival companies, including Musk's AI startup, xAI.
Microsoft declined to respond.
Musk's attorneys say in their application for preliminary injunction that OpenAI should be barred from "benefitting from wrongfully obtained competitively sensitive information or coordination via the Microsoft-OpenAI board interlocks."
"Elon's fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit," claimed an OpenAI representative.
OpenAI has emerged as one of the most significant firms, with its ChatGPT chatbot igniting extensive business interest in AI and huge language models.
Meanwhile, Elon Musk's xAI, which launched in July 2023, has rapidly gained traction.
The startup launched its Grok chatbot and is apparently raising up to $6 billion at a $50 billion valuation, with some of the proceeds going toward the acquisition of 100,000 Nvidia chips.
"Microsoft and OpenAI now seek to cement this dominance by cutting off competitors' access to investment capital (a group boycott), while continuing to benefit from years' worth of shared competitively sensitive information during generative AI's formative years," the lawyers stated in their filing.
According to the attorneys, the terms that OpenAI sought investors to agree to constituted a "group boycott" that "blocks xAI's access to essential investment capital."
The lawyers further clarified that OpenAI "cannot lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interests of Microsoft."
FTC Chair Lina Khan indicated earlier this year that the commission would conduct a "market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers."
The FTC listed numerous prominent corporations in its AI industry review, including OpenAI, Amazon, Alphabet, Microsoft, and Anthropic.
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