Elon Musk has escalated his legal dispute with OpenAI and Microsoft by filing for a preliminary injunction in the U.S. District Court for the Northern District in California against OpenAI’s transition to a for-profit entity. The filing accuses OpenAI of engaging in anticompetitive practices and corporate misconduct and alleges that these actions harm xAI and other competitors.
Central to Musk’s claims is the accusation that OpenAI has been discouraging investors from backing rival AI ventures. Musk’s legal team contends that OpenAI has exerted undue influence over its investors, effectively shutting out competition. This alleged conduct has purportedly deprived xAI of funding opportunities, reports TechCrunch.
Another key allegation is the misuse of proprietary information. Musk’s team asserts that OpenAI and Microsoft have benefitted from confidential and competitively sensitive information shared through their partnership, giving them an unfair edge in the AI race. This relation, they argue, exemplifies an improper blending of resources and interests that undermines fair competition.
The filing also highlights alleged self-dealing among OpenAI’s leadership. Musk’s attorneys claim that OpenAI CEO Sam Altman and others have directed the organisation’s business toward entities in which they hold significant financial stakes.
For instance, they point to OpenAI’s selection of Stripe as its payment processor, noting Altman’s substantial financial interests in the platform. Musk contends that these actions betray OpenAI’s original nonprofit mission and deepen its shift toward self-serving priorities.
Musk, who co-founded OpenAI in 2015, left the organisation in 2018 following disagreements about its direction. Since then, he has criticised the company’s transition from a nonprofit model to a for-profit structure. He alleges that this transformation has strayed from the organisation’s founding promise to make AI advancements widely accessible.
Musk’s attorneys argue that without judicial intervention, OpenAI’s nonprofit roots will be entirely eroded, leaving it free to prioritise private profits over public benefit.
The motion also draws attention to Microsoft’s growing influence over OpenAI. Having invested approximately $13 billion in the company, Microsoft has become a crucial partner, providing essential cloud computing resources for OpenAI’s operations. Musk’s legal team suggests this close relationship has facilitated anticompetitive practices, including exclusive agreements and resource sharing favouring Microsoft and its interests.
OpenAI has denied the allegations, with a spokesperson calling Musk’s claims baseless and reiterating the company’s position that his legal efforts lack merit. The organisation has previously sought to dismiss Musk’s lawsuits, describing them as unfounded and speculative.
“Elon’s fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit,” an OpenAI spokesperson told TechCrunch.
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