- Elon Musk is seeking an injunction against OpenAI to stop it from becoming a for-profit entity.
- It’s part of Musk’s lawsuit against Sam Altman, who says OpenAI engaged in anti-competitive behavior.
- The order would block OpenAI’s profitable transition and partnerships with Microsoft.
Elon Musk is trying to get a court to stop OpenAI from turning into a for-profit entity, a new filing shows.
In a motion filed Friday, Musk’s lawyers asked Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California to issue an injunction against OpenAI, preventing it from completing its transition from a non-profit to a for-profit company.
The request also argues that OpenAI has engaged in anti-competitive behavior by discouraging investors from partnering with its competitors, such as Musk’s company xAI, and has benefited from “misappropriated competitively sensitive information” through its ties to Microsoft.
Reid Hoffman, co-founder of LinkedIn, previously served on the boards of OpenAI and Microsoft simultaneously. Musk’s lawyers write that Hoffman’s role at both companies, which they describe as “Microsoft-OpenAI board nexus,” resulted in improper information sharing between the companies and monopolistic market practices. Musk’s lawyers say the partnership violates antitrust law.
“It would be one thing if Microsoft once again engaged in anti-competitive behavior, this time with OpenAI. It would be another if OpenAI, aided and abetted by Microsoft, violated the terms of Musk’s fundamental contributions to charity,” the filing said, referring to OpenAI as a charity because of its founding as a nonprofit organization. “But OpenAI and Microsoft together leverage Musk’s donations so they can build a profitable monopoly, a which now specifically targets xAI, is also very much. Plaintiffs and the public need a break.”
If granted, the request for a restraining order would hinder OpenAI’s profitable transition and force the company to end its partnership with Microsoft.
Lawyers for Microsoft, Hoffman and Musk did not immediately respond to requests for comment from Business Insider.
No longer a non-profit organization
Musk and OpenAI CEO Sam Altman were part of a group of Silicon Valley figures, including Hoffman and former PayPal CEO Peter Thiel, who co-founded or helped fund OpenAI in 2015 as a nonprofit. Musk invested between $45 million and $50 million in the company, Tesla’s CEO told CNBC last year, and OpenAI says on its website, and served on its board of directors until his departure in 2018. In the years since , Musk and Altman have publicly feuded over the direction of OpenAI, Musk’s role in its success, and the development of AI more broadly.
In September, OpenAI — now valued at more than $150 billion — announced plans to restructure into a profitable entity nearly a decade after its inception.
Friday’s statement argues that OpenAI’s path from a non-profit to a for-profit entity has been “fraught with per se anti-competitive practices, flagrant violations of its charitable mission and rampant self-dealing”.
“Any freedom OpenAI might have had due to antitrust law as a purported charity it chose to give up when it submitted to Microsoft for profit,” the filing said. “Therefore OpenAI must play by the same rules as everyone else. It cannot worry about the market as a Frankenstein, cobbled together by whatever corporate form serves the monetary interests of Microsoft and Altman at any given moment.”
The filing is the latest in an ongoing legal saga between Musk and Altman that has escalated this year. Musk first filed suit against Altman and other OpenAI executives in March before withdrawing it in June. He filed a new version of the lawsuit in August, arguing he was “tricked” into co-founding the company. Earlier this month, Musk’s lawyers added Microsoft and Hoffman as defendants.
Hoffman, in August, described Musk’s lawsuit against OpenAI as a case of “sour grapes.”
An OpenAI spokesperson told Business Insider the latest filing in the case, “which again recycles the same baseless complaints, continues to be completely without merit.”