Elon Musk files for injunction to halt OpenAI’s transition to a for-profit

Elon Musk files injunction to stop OpenAI's for-profit transition alleging anticompetitive actions.

: Elon Musk has filed for an injunction against OpenAI, its co-founders, and investor Microsoft to halt OpenAI's transition to a for-profit entity. Musk's attorneys claim OpenAI is engaging in anticompetitive practices, including discouraging investments in competitors like Musk's xAI. They allege OpenAI is benefitting from sensitive information obtained through Microsoft, and some defendants are involved in self-dealing. Musk argues the injunction is necessary to preserve OpenAI's nonprofit character.

Elon Musk has sought a preliminary injunction against OpenAI, its co-founders, and investor Microsoft, filed in the U.S. District Court for the Northern District of California. The motion alleges that OpenAI and its partners are engaging in anticompetitive behavior, including discouraging investments in competitors like Musk's own xAI, and accuses them of converting OpenAI's governance structure to a for-profit entity.

The allegations extend to OpenAI benefiting from competitively sensitive information through its connections with Microsoft and involve deals with organizations in which defendants have financial interests. Musk's filing includes claims against Sam Altman, Reid Hoffman, and Microsoft VP Dee Templeton, suggesting they share proprietary information illegally and engage in self-dealing practices that undermine competition.

Musk's attorneys argue that without the injunction, OpenAI could fail to maintain its nonprofit mission, leading to irreversible financial and operational impacts. They assert that maintaining OpenAI's charitable status is crucial for protecting its original mission and preventing market harm, while OpenAI dismisses Musk's lawsuit as baseless. Musk's xAI, contrastingly, has successfully raised $5 billion recently, even amid these legal battles.