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Lawyers for tech billionaire Elon Musk foot To issue a preliminary injunction against OpenAI, several of its co-founders, and its investor and close collaborator, Microsoft, to prevent OpenAI and the other named defendants from engaging in what Musk’s attorneys claim is anti-competitive conduct.
The injunction request, filed late Friday in the U.S. District Court for the Northern District of California, accuses OpenAI, its CEO Sam Altman, its president Greg Brockman, Microsoft and LinkedIn co-founder and former OpenAI board member Reed Hoffman, and Former OpenAI Board of Directors and Microsoft Vice President Dee Templeton of various illegal activities and seeks to stop them. The allegations include:
- Discouraging investors from backing OpenAI competitors like Musk’s own AI company, xAI.
- Leveraging “competitively sensitive information illegally obtained” through OpenAI’s communications with Microsoft.
- Convert OpenAI’s governance structure to a for-profit corporation and “transfer any tangible assets, including intellectual property, owned, owned or controlled by OpenAI, Inc. or its subsidiaries or affiliates.”
- Have OpenAI deal with organizations in which any defendant has a “material financial interest.”
Musk’s lawyers contend that “irreparable harm” will occur if the injunction is not granted.
“Prosecutors and the public need to pause,” they wrote in the filing. “An injunction to preserve what remains of OpenAI’s nonprofit character, free of self-dealing, is the only appropriate remedy. If not, OpenAI promised Musk, the public will be long gone by the time the court gets to the merits.”
Musk’s lawsuit against OpenAI, which essentially accuses the company of abandoning its original nonprofit mission of making the fruits of its AI research available to everyone, It was withdrawn In July, just to be alive Late this summer. in Amended complaint In November, the lawsuit named new defendants, including Microsoft, Hoffman, and Templeton, and two new plaintiffs: Shivon Zilis, a Neuralink executive and former board member of OpenAI, and xAI.
Musk has argued in previous lawsuits that he was defrauded out of more than $44 million that he says he donated to OpenAI by exploiting his “known concerns about the existential harms” of artificial intelligence. Musk, a co-founder of OpenAI, left the company in 2018 over disagreements over its direction.
In seeking an injunction, Musk’s lawyers claim that OpenAI is depriving the xAI company of capital by extracting promises from investors that they will not fund it and compete. In October, Financial Times I mentioned OpenAI asked investors in its latest funding round to refrain from funding any of OpenAI’s competitors, including xAI.
“Musk has verified that at least one lead investor in OpenAI’s October funding round has subsequently declined to invest in xAI,” Musk’s lawyer wrote.
Naturally, XAI has had no problem raising funds recently. The startup reportedly closed a $5 billion round this month with participation from high-profile investors including Andreessen Horowitz and Fidelity. With about $11 billion in the bank, xAI is one of the best-funded AI projects in the world.
Musk’s request for an injunction also alleges that Microsoft and OpenAI continue to illegally share proprietary information and resources, and that several defendants, including Altman, engage in self-dealing that harms competition in the marketplace. For example, in the filing note, OpenAI selected Stripe, a payment platform in which Altman has a “material financial interest,” to be OpenAI’s payment processor. (Altman is said to have made Billions Of his belongings in the tape.)
Microsoft, which first backed OpenAI in early 2019, has been ramping up the partnership over the past several years, investing a total of roughly $13 billion for what is effectively a 49% share of the company’s profits. Microsoft also allowed OpenAI to extensively leverage its cloud hardware resources, enabling the startup to train, tune, and run AI models like the ones that power ChatGPT.
Musk’s lawyers argue that Hoffman’s position on the boards of both Microsoft and OpenAI, while also being a partner at the investment firm Greylock, gave Hoffman a privileged view into the two companies’ dealings. (Hoffman stepped down from OpenAI’s board in 2023.) As for Templeton, who was briefly appointed by Microsoft as a non-voting observer on OpenAI’s board, Musk’s lawyer says she was in a position to facilitate agreements between Microsoft and OpenAI that would violate antitrust rules.
“Maintaining OpenAI’s charitable status pending a final decision and halting further self-dealing by Altman protects the organization’s founding mission and the public interest in the proper governance of charities,” Musk’s lawyers wrote.
Musk’s lawyer wrote that if the injunction is not granted, OpenAI may “lack sufficient funds” to pay damages if the court ultimately rules in Musk’s favor. (OpenAI is It is said Moreover, they say, if a judge had rejected OpenAI’s transition to a nonprofit, it would have been “almost impossible” to “unbundle” the company’s transactions without “widespread loss to investors.” OpenAI must continue to accept new investments.
“No objective observer could look at OpenAI today and say it bears any resemblance at all to what it promised,” Musk’s lawyers wrote. “Plaintiffs respectfully request that the Court maintain the status quo and restrain Defendants’ aggravating conduct until final disposition.”
OpenAI did not immediately respond to TechCrunch’s request for comment. The company previously sought to dismiss Musk’s lawsuit, calling it “loud” and baseless.
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