Elon Musk Expands Lawsuit Against OpenAI, Adds Microsoft as Defendant in Antitrust Claims

Musk Expands Lawsuit Against OpenAI, Adds Microsoft and Antitrust Claims

OpenAI has called Musk's lawsuit more baseless than the previous one Billionaire entrepreneur Elon Musk expanded his lawsuit against ChatGPT maker OpenAI, adding federal antitrust and other claims and adding OpenAI's largest financial backer Microsoft as a defendant. Musk's amended lawsuit, filed on Thursday night in federal court in Oakland, California, said Microsoft and OpenAI illegally sought to monopolise the market for generative artificial intelligence and sideline competitors. Like Musk's original August complaint, it accused OpenAI and its chief executive, Samuel Altman, of violating contract provisions by putting profits ahead of the public good in the push to advance AI. "Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralysing gorgon -- and in just eight years," the complaint said. It seeks to void OpenAI's license with Microsoft and force them to divest "ill-gotten" gains. OpenAI in a statement said the latest lawsuit "is even more baseless and overreaching than the previous ones." Microsoft declined to comment. "Microsoft's anticompetitive practices have escalated," Musk's attorney Marc Toberoff said in a statement. "Sunlight is the best disinfectant." Musk has a long-simmering opposition to OpenAI, a startup he co-founded and that has since become the face of generative AI through billions of dollars in funding from Microsoft. Musk has gained new prominence as a key force in US President-elect Donald Trump's incoming administration. Trump named Musk to a new role designed to cut government waste, after he donated millions of dollars to Trump's Republican campaign. The expanded lawsuit said OpenAI and Microsoft violated antitrust law by conditioning investment opportunities on agreements not to deal with the companies' rivals. It said the companies' exclusive licensing agreement amounted to a merger lacking regulatory approvals. In a court filing last month, OpenAI accused Musk of pursuing the lawsuit as part of an "increasingly blusterous campaign to harass OpenAI for his own competitive advantage." © Thomson Reuters 2024

Musk expands lawsuit against OpenAI, adding Microsoft and antitrust claims

(Reuters) - Billionaire entrepreneur Elon Musk expanded his lawsuit against ChatGPT maker OpenAI, adding federal antitrust and other claims and adding OpenAI's largest financial backer Microsoft as a defendant. Musk's amended lawsuit, filed on Thursday night in federal court in Oakland, California, said Microsoft and OpenAI illegally sought to monopolize the market for generative artificial intelligence and sideline competitors. Like Musk's original August complaint, it accused OpenAI and its chief executive, Samuel Altman, of violating contract provisions by putting profits ahead of the public good in the push to advance AI. "Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon -- and in just eight years," the complaint said. It seeks to void OpenAI's license with Microsoft and force them to divest "ill-gotten" gains. OpenAI in a statement said the latest lawsuit "is even more baseless and overreaching than the previous ones." Microsoft and lawyers for Musk did not immediately respond to requests for comment. Musk has a long-simmering opposition to OpenAI, a startup he co-founded and that has since become the face of generative AI through billions of dollars in funding from Microsoft. Musk has gained new prominence as a key force in U.S. President-elect Donald Trump's incoming administration. Trump named Musk to a new role designed to cut government waste, after he donated millions of dollars to Trump's Republican campaign. The expanded lawsuit said OpenAI and Microsoft violated antitrust law by conditioning investment opportunities on agreements not to deal with the companies' rivals. It said the companies' exclusive licensing agreement amounted to a merger lacking regulatory approvals. In a court filing last month, OpenAI accused Musk of pursuing the lawsuit as part of an "increasingly blusterous campaign to harass OpenAI for his own competitive advantage." (Reporting by Mike Scarcella; editing by David Bario and Jonathan Oatis)

Elon Musk targets Microsoft in expanded OpenAI lawsuit

Billionaire alleges Microsoft and OpenAI illegally sought to monopolize AI market and sideline competitors Elon Musk has expanded his lawsuit against the ChatGPT maker OpenAI, adding federal antitrust and other claims and adding OpenAI's largest financial backer, Microsoft, as a defendant. Musk's amended lawsuit, filed on Thursday night in federal court in Oakland, California, said Microsoft and OpenAI illegally sought to monopolize the market for generative artificial intelligence and sideline competitors. Like Musk's original August complaint, it accused OpenAI and its chief executive, Samuel Altman, of violating contract provisions by putting profits ahead of the public good in the push to advance AI. "Never before has a corporation gone from tax-exempt charity to a $157bn for-profit, market-paralyzing gorgon - and in just eight years," the complaint said. It seeks to void OpenAI's license with Microsoft and force them to divest "ill-gotten" gains. OpenAI in a statement said the latest lawsuit "is even more baseless and overreaching than the previous ones". Microsoft declined to comment. "Microsoft's anticompetitive practices have escalated," Musk's attorney Marc Toberoff said in a statement. "Sunlight is the best disinfectant." Musk has a long-simmering opposition to OpenAI, a startup he co-founded and that has since become the face of generative AI through billions of dollars in funding from Microsoft. Musk has gained new prominence as a key force in Donald Trump's incoming administration. Trump named Musk to a new role designed to cut government waste, after he donated millions of dollars to Trump's Republican campaign. The expanded lawsuit said OpenAI and Microsoft violated antitrust law by conditioning investment opportunities on agreements not to deal with the companies' rivals. It said the companies' exclusive licensing agreement amounted to a merger lacking regulatory approvals. In a court filing last month, OpenAI accused Musk of pursuing the lawsuit as part of an "increasingly blusterous campaign to harass OpenAI for his own competitive advantage".

Elon Musk Names Microsoft in Lawsuit Against OpenAI

Elon Musk has expanded his ongoing lawsuit against ChatGPT maker OpenAI to include Microsoft and a batch of new antitrust allegations. The updated lawsuit, filed on Thursday in a federal court in Northern California, also names LinkedIn co-founder Reid Hoffman as a defendant and Microsoft VP Dee Templeton, who previously served on the board of OpenAI. Musk -- who first started proceedings against OpenAI in March -- now alleges that OpenAI is attempting to eliminate its competitors, by stopping its investors funding rival AI firms. The suit also alleges that OpenAI's partnership with Microsoft has allowed the two tech firms to exchange "competitively sensitive information". OpenAI has gone from a "tax-exempt charity to a $157bn for-profit, market-paralyzing gorgon - and in just eight years" according to the filing. A "Gorgon" is a fierce monster from Greek myth. The updated lawsuit also accused OpenAI CEO Sam Altman of "rampant self dealing". "As a result of their unlawful actions, defendants have been unjustly enriched to the tune of hundreds of billions of dollars in value, while Mr Musk has been conned along with the public," it read. Microsoft is by far OpenAI's biggest investor, has invested $14 billion in the company so far since 2019, and owes roughly 49% of the start-up's commercial unit. The latest legal action comes after Musk accused OpenAI of committing wire fraud in a previous filing in August. Musk was one of OpenAI's earliest investors. The 83-page document claims that the Tesla CEO invested over $44.5 million in OpenAI between May 2016 and September 2020 via a series of small wire transfers. The filing claimed that Musk was "manipulated" and that falsely led to the belief that OpnAI "decentralizes its technology by making it open source." But Musk has increasingly become a competitor of OpenAI during 2024. In July, Elon Musk's xAI startup opened up a sprawling supercomputing facility in Memphis, Tennessee, to train AI chatbot Grok. Microsoft has yet to release a statement on the allegations at the time of writing. OpenAI's Jason Deutrom commented that: "Elon's third attempt in less than a year to reframe his claims is even more baseless and overreaching than the previous ones," in a statement shared with The New York Times.

Elon Musk expands lawsuit against OpenAI, blasts 'ill-gotten gains'...

Billionaire entrepreneur Elon Musk expanded his lawsuit against ChatGPT maker OpenAI, adding federal antitrust and other claims and adding OpenAI's largest financial backer Microsoft as a defendant. Musk's amended lawsuit, filed on Thursday night in federal court in Oakland, Calif., said Microsoft and OpenAI illegally sought to monopolize the market for generative artificial intelligence and sideline competitors. Like Musk's original August complaint, it accused OpenAI and its chief executive, Sam Altman, of violating contract provisions by putting profits ahead of the public good in the push to advance AI. "Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon -- and in just eight years," the complaint said. It seeks to void OpenAI's license with Microsoft and force them to divest "ill-gotten" gains. OpenAI in a statement said the latest lawsuit "is even more baseless and overreaching than the previous ones." Microsoft and lawyers for Musk did not immediately respond to requests for comment. Musk has a long-simmering opposition to OpenAI, a startup he co-founded and that has since become the face of generative AI through billions of dollars in funding from Microsoft. Musk has gained new prominence as a key force in President-elect Donald Trump's incoming administration. Trump named Musk to a new role designed to cut government waste, after he donated millions of dollars to Trump's Republican campaign. The expanded lawsuit said OpenAI and Microsoft violated antitrust law by conditioning investment opportunities on agreements not to deal with the companies' rivals. It said the companies' exclusive licensing agreement amounted to a merger lacking regulatory approvals. In a court filing last month, OpenAI accused Musk of pursuing the lawsuit as part of an "increasingly blusterous campaign to harass OpenAI for his own competitive advantage."

Elon Musk adds Microsoft to suit against OpenAI

Elon Musk has amended a lawsuit he brought this year against OpenAI, escalating his yearslong feud with the maker of the online chatbot ChatGPT. The amended complaint, filed Thursday in federal court in Northern California, makes new antitrust claims against OpenAI and adds defendants, including the tech giant Microsoft and venture capitalist Reid Hoffman. Microsoft is a close partner of OpenAI, after investing more than $13 billion in the startup. Hoffman is a Microsoft board member and previously served on the board of OpenAI. The new legal filing also adds two plaintiffs to the suit alongside Musk: his startup xAI, which competes with OpenAI, and Shivon Zilis, a former OpenAI board member. Zilis is now an executive at Musk's brain implant company Neuralink and the mother of three of his children. OpenAI and Hoffman did not immediately respond to requests for comment. Microsoft declined to comment. Musk sued OpenAI in March in a state court in San Francisco, before withdrawing the suit without explanation. Seven weeks later, he filed a new suit in federal court, arguing that OpenAI violated federal racketeering laws by conspiring to defraud him. Like the original suit, the federal complaint claimed that OpenAI and two of its founders, Sam Altman and Greg Brockman, breached the company's founding contract by putting commercial interests ahead of the public good. After joining with Musk to create OpenAI in 2015 and pledging to carefully develop artificial intelligence for the benefit of humanity, the suit claimed, Altman and Brockman abandoned this mission by entering its multibillion-dollar partnership with Microsoft. Musk stepped away from OpenAI in 2018, before that partnership was created. In the amended complaint, Musk argued that OpenAI is trying to eliminate competitors like xAI by insisting that its investors refrain from funding these rivals. He also argued that xAI had been harmed because OpenAI's partnership with Microsoft allowed the two companies to trade "competitively sensitive information." Both Hoffman and Dee Templeton, a Microsoft vice president, had undermined antitrust laws because they were involved with the boards of Microsoft and OpenAI, according to the complaint. "The purpose of the prohibition on interlocking directorates is to prevent sharing of competitively sensitive information," the complaint read. In adding Zilis as a plaintiff in the suit, the new filing said that she repeatedly raised concerns over OpenAI's dealings while serving as a board member. She left the OpenAI board last year. (The New York Times sued OpenAI and Microsoft in December for copyright infringement of news content related to AI systems.)

Elon Musk Adds Microsoft to Suit Against OpenAI

Elon Musk has amended a lawsuit he brought this year against OpenAI, escalating his yearslong feud with the maker of the online chatbot ChatGPT. The amended complaint, filed on Thursday in federal court in Northern California, makes new antitrust claims against OpenAI and adds defendants, including the tech giant Microsoft and the venture capitalist Reid Hoffman. Microsoft is a close partner of OpenAI, after investing more than $13 billion in the start-up. Mr. Hoffman is a Microsoft board member and previously served on the board of OpenAI. The new legal filing also adds two plaintiffs to the suit alongside Mr. Musk: his start-up xAI, which competes with OpenAI, and Shivon Zilis, a former OpenAI board member. Ms. Zilis is now an executive at Mr. Musk's brain implant company Neuralink and the mother of three of his children. OpenAI and Mr. Hoffman did not immediately respond to requests for comment. Microsoft declined to comment. Mr. Musk sued OpenAI in March in a state court in San Francisco, before withdrawing the suit without explanation. Seven weeks later, he filed a new suit in federal court, arguing that OpenAI violated federal racketeering laws by conspiring to defraud him. Like the original suit, the federal complaint claimed that OpenAI and two of its founders, Sam Altman and Greg Brockman, breached the company's founding contract by putting commercial interests ahead of the public good. After joining with Mr. Musk to create OpenAI in 2015 and pledging to carefully develop artificial intelligence for the benefit of humanity, the suit claimed, Mr. Altman and Mr. Brockman abandoned this mission by entering its multibillion-dollar partnership with Microsoft. Mr. Musk stepped away from OpenAI in 2018, before that partnership was created. In the amended complaint, Mr. Musk argued that OpenAI is trying to eliminate competitors like xAI by insisting that its investors refrain from funding these rivals. He also argued that xAI had been harmed because OpenAI's partnership with Microsoft allowed the two companies to trade "competitively sensitive information." Both Mr. Hoffman and Dee Templeton, a Microsoft vice president, had undermined antitrust laws because they were both involved with the boards of Microsoft and OpenAI, according to the complaint. "The purpose of the prohibition on interlocking directorates is to prevent sharing of competitively sensitive information," the complaint read. In adding Ms. Zilis as a plaintiff in the suit, the new filing said that she repeatedly raised concerns over OpenAI's dealings while serving as a board member. She left the OpenAI board last year. (The New York Times sued OpenAI and Microsoft in December for copyright infringement of news content related to A.I. systems.)

Musk expands legal assault on OpenAI to also target Microsoft

Billionaire Elon Musk co-founded OpenAI but now says the ChatGPT developer has betrayed its original mission of helping humanity with artificial intelligence. SAN FRANCISCO -- Billionaire entrepreneur and Donald Trump adviser Elon Musk broadened a federal lawsuit against OpenAI on Friday, alleging the ChatGPT maker has conspired with its primary backer Microsoft to break antitrust laws as the nonprofit became more focused on making money ventures. The amended version of a complaint Musk initially filed against OpenAI in February adds Microsoft and Microsoft board member Reid Hoffman, also a former member of OpenAI's board, as defendants. It alleges that the Windows developer worked with OpenAI CEO Sam Altman to try to turn it into a for-profit company that would benefit Microsoft. Microsoft's multibillion dollar investment in OpenAI is part of a Federal Trade Commission investigation into Big Tech companies and their ties to emerging AI firms. It comes as Musk has rocketed to a central position in president-elect Donald Trump's nascent administration, potentially giving him increased influence over government policy on antitrust and AI. Musk was a founding member and major financial backer of OpenAI in 2015, but he parted with the project a few years later and last year launched a competing AI venture, xAI. He sued OpenAI in late February, alleging that it had broken its commitment to investors to serve as a nonprofit that would aim to benefit all of humanity. Altman and Greg Brockman, another OpenAI founder and senior executive, were named as defendants. OpenAI responded by releasing emails allegedly showing Musk tried to take over control of the AI developer and merge it with his electric car company Tesla. Musk dropped the initial lawsuit in June, then refiled it as a federal suit in the Northern District of California in August. The updated complaint filed yesterday that names Microsoft also claims that changes to OpenAI's board made after Altman was fired and then reinstated last year leave the company "thoroughly compromised by a fully profit-driven CEO." OpenAI has asked the court to dismiss the lawsuit. "Elon's third attempt in less than a year to reframe his claims is even more baseless and overreaching than the previous ones," said Jason Deutrom, a spokesperson for OpenAI. Spokespeople for Microsoft and Reid Hoffman did not immediately return requests for comment. Beyond adding the antitrust allegations, Musk's amended complaint cites news reports about OpenAI employees quitting the company over concerns that it is not working hard enough to keep its AI from causing harm. "The resignations largely appear to be in protest of Altman and OpenAI's increasingly unfettered and conflicted pursuit of profits at the expense of safety," the suit said. OpenAI is seeking to restructure from a nonprofit into a more conventional company, freeing it from the oversight of its nonprofit board. Altman and other executives have said that the company needs to be able to make money to compete with tech giants such as Google and prevent them from controlling AI technology. Aaron Schaffer contributed to this report.

Musk makes new antitrust claims against OpenAI

Elon Musk added new antitrust claims to his lawsuit against OpenAI on Thursday, accusing the ChatGPT maker of colluding with Microsoft to block competition from other artificial intelligence (AI) companies. The new filing is the latest development in a monthslong saga between Musk and OpenAI, which he sued earlier this year for allegedly abandoning its founding principles as a nonprofit dedicated to safe and open AI development to become a for-profit company. In addition to raising new arguments in Thursday's filing, the Tesla and SpaceX CEO also added Microsoft and LinkedIn co-founder Reid Hoffman as defendants and his AI company xAI and former OpenAI board member Shivon Zilis as plaintiffs. Zilis is also an executive at Neuralink, Musk's neurotechnology company, and the mother of three of Musk's children. "Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon -- and in just eight years," Musk's lawyers wrote. "Never before has it happened, because doing so violates almost every principle of law governing economic activity," they continued. "It requires lying to donors, lying to members, lying to markets, lying to regulators, and lying to the public." Musk sued OpenAI and fellow co-founders Sam Altman and Greg Brockman in August after dropping an earlier lawsuit against the AI company. He accused Altman and Brockman of manipulating him into supporting their endeavor by convincing him that it would develop safe and transparent AI. However, OpenAI is now poised to fully transition to a for-profit business -- a significant departure from its nonprofit roots. Musk argues that it is "fast becoming a fully for-profit subsidiary of Microsoft," which has invested billions of dollars into and maintains a close relationship with the ChatGPT maker. The tech mogul's antitrust claims stem from this partnership between OpenAI and Microsoft. He alleges that the pair have prevented companies like xAI from successfully competing in the generative AI space by making it more difficult to obtain investors and employees. Musk also argues that the partnership gives OpenAI access to cheaper computing power and blocks other companies from licensing its technology, resulting in an "unlawful competitive advantage." OpenAI dismissed Musk's newest claims as a "third attempt in less than a year to reframe his claims is even more baseless and overreaching than the previous ones." "His prior emails continue to speak for themselves," a spokesperson added in a statement, referring to several emails between Musk and OpenAI leaders that the company has previously made public. The emails showed Musk suggesting that the AI firm would need substantial investment and acknowledging that a "for-profit pivot might create a more sustainable revenue stream." Microsoft declined to comment on the new claims raised in the lawsuit.

Musk names Microsoft in amended OpenAI claim

Elon Musk has added Microsoft and the venture capitalist Reid Hoffman to the list of defendants in his long-running legal dispute with OpenAI. The ChatGPT maker called the claim "baseless and overreaching." In a fresh amended complaint with the US District Court, Northern District of California, the rocket and electric car entrepreneur alleges that Microsoft's involvement with OpenAI - the highly valued startup behind a string of attention-grabbing LLMs - amounts to anti-competitive practices. Microsoft has been a close partner of OpenAI since 2019 and is reported to have invested around $13 billion in the company. Musk filed suit against OpenAI in February, alleging a breach of contract in the AI company's move away from open technology and its original mission to develop AI for the benefit of humanity. That action was later ended without explanation, only for Musk to launch a new lawsuit in August. "Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon - and in just eight years. Never before has it happened, because doing so violates almost every principle of law governing economic activity. It requires lying to donors, lying to members, lying to markets, lying to regulators, and lying to the public," the new submission alleges from the start and continues in much the same vein. The Register has offered Microsoft and OpenAI the opportunity to respond. An OpenAI spokesperson said: "Elon's third attempt in less than a year to reframe his claims is even more baseless and overreaching than the previous ones. His prior emails continue to speak for themselves." In March, OpenAI published a trove of emails that appeared to show Musk was not only aware of the need for OpenAI to become a for-profit entity - one of the central issues in the claim - but also wanted to merge OpenAI into Tesla and become CEO. The new amended complaint alleges that Microsoft board member Reid Hoffman and Dee Templeton, a Microsoft vice president, had acted against antitrust laws because both were involved with the boards of OpenAI and Microsoft. "The purpose of the prohibition on interlocking directorates is to prevent the sharing of competitively sensitive information in violation of the antitrust laws and/or providing a forum for the coordination of other anticompetitive activity. Allowing Templeton and Hoffman to serve as members of OpenAI's board undermined this purpose," the complaint said. The document also adds Musk AI startup xAI and Shivon Zilis, a former OpenAI board member, as plaintiffs in the case. ®

Musk's amended lawsuit against OpenAI names Microsoft as defendant

Elon Musk's lawsuit against OpenAI accusing the company of abandoning its non-profit mission was withdrawn in July, only to be revived in August. Now, in an amended complaint, the suit names new defendants including Microsoft, LinkedIn co-founder Reid Hoffman, and former OpenAI board member and Microsoft VP Dee Templeton. The amended filing also adds new plaintiffs: Neuralink exec and ex-OpenAI board member Shivon Zilis and Musk's AI company, xAI. Musk was one of the original founders of OpenAI, which was meant to research and develop AI for the benefit of humanity, and was established as a non-profit originally. He left the company in 2018 after disagreements about its direction. In the complaint, lawyers for Musk argue that OpenAI is now "actively trying to eliminate competitors" such as xAI by "extracting promises from investors not to fund them." It's also allegedly unfairly benefitting from Microsoft's infrastructure and expertise in what Musk's counsel describes in the filing as a "de facto" merger. "xAI has been harmed by, without limitation ... an inability to license OpenAI technology given Microsoft's exclusive license ... an inability to obtain compute from Microsoft on terms anywhere near as favorable as OpenAI receives ... and the exclusive exchange between OpenAI and Microsoft of competitively sensitive information," reads the complaint, filed late Thursday in federal court in Oakland, California. Hoffman's position on the boards of both Microsoft and OpenAI while also a partner at Greylock, the investment firm, gave Hoffman a privileged -- and illicit -- view into the companies' dealings, the complaint alleges. (Hoffman stepped down from OpenAI's board in 2023.) Greylock invested in Inflection, Musk's counsel notes, the AI startup that Microsoft acqui-hired earlier this year -- and which could reasonably be considered an OpenAI competitor, according to the complaint. As for Templeton, whom Microsoft briefly appointed as a non-voting board observer at OpenAI, the amended filing alleges that she was in a position to facilitate agreements between Microsoft and OpenAI that would violate antitrust rules. "The purpose of the prohibition on interlocking directorates is to prevent sharing of competitively sensitive information in violation of antitrust laws and/or providing a forum for the coordination of other anticompetitive activity," the complaint reads. "Allowing Templeton and Hoffman to serve as members of OpenAI's .... board undermined this purpose. " Alongside Microsoft, Hoffman, and Templeton, California attorney general Rob Bonta is named as a defendant in Musk's complaint. Bloomberg reported this month that OpenAI is in talks with Bonta's office over the process to change its corporate structure. Per the amended complaint, Zilis, who stepped down from OpenAI's board in 2023 after serving as a member for roughly four years, has standing as an "injured employee" under California Corporations Code. Zilis repeatedly raised concerns over OpenAI's dealmaking internally that fell on deaf ears -- concerns substantially similar to Musk's, according to the complaint. Zilis has close ties to Musk, having worked as a project director at Tesla from 2017 to 2019 in addition to directing Neuralink research. (Neuralink is Musk's brain-computer interface venture.) She's also the mother of three of Musk's children, Techno Mechanicus and twins Strider and Azure. The 107-page amended complaint includes the unusual detail that OpenAI CEO Sam Altman proposed that OpenAI sell its own cryptocurrency in September 2017, before it ultimately decided to transition to a capped-profit structure. Musk supposedly shot down the crypto sale idea. The thrust of the lawsuit remains the same on the plaintiffs' side: that OpenAI profited from Musk's early involvement in the company yet reneged on its nonprofit pledge to make the fruits of its AI research available to all. "No amount of clever drafting nor surfeit of creative dealmaking can obscure what is happening here," reads the complaint. "OpenAI, Inc., co-founded by Musk as an independent charity committed to safety and transparency ... [is] fast becoming a full for-profit subsidiary of Microsoft." OpenAI has sought to dismiss Musk's lawsuit, calling it "blusterous" and baseless.

Musk's amended lawsuit against OpenAI names Microsoft as defendent | TechCrunch

Musk's lawsuit against OpenAI accusing the company of abandoning its nonprofit mission was withdrawn in July, only to be revived in August. Now, in an amended complaint, the suit names new defendants including Microsoft, LinkedIn co-founder Reid Hoffman, and former OpenAI board member and Microsoft VP Dee Templeton. The amended filing also adds new plaintiffs: Neuralink exec and ex-OpenAI board member Shivon Zilis and Musk's AI company, xAI. In the complaint, lawyers for Musk argue that OpenAI is "actively trying to eliminate competitors" such as xAI by "extracting promises from investors not to fund them." It's also allegedly unfairly benefitting from Microsoft's infrastructure and expertise in what Musk's counsel describes in the filing as a "de facto" merger. "xAI has been harmed by, without limitation ... an inability to license OpenAI technology given Microsoft's exclusive license ... an inability to obtain compute from Microsoft on terms anywhere near as favorable as OpenAI receives ... and the exclusive exchange between OpenAI and Microsoft of competitively sensitive information." Hoffman's position on the boards of both Microsoft and OpenAI while also a partner at Greylock, the investment firm, gave Hoffman a privileged -- and illicit -- view into the companies' dealings, the complaint alleges. (Hoffman stepped down from OpenAI's board in 2023.) Greylock invested in Inflection, Musk's counsel notes, the AI startup that Microsoft acqui-hired earlier this year -- and which could reasonably be considered an OpenAI competitor, according to the complaint. As for Templeton, who Microsoft briefly appointed a non-voting board observer at OpenAI, the amended filing alleges that she was in a position to facilitate agreements between Microsoft and OpenAI that would violate antitrust rules. "The purpose of the prohibition on interlocking directorates is to prevent sharing of competitively sensitive information in violation of antitrust laws and/or providing a forum for the coordination of other anticompetitive activity," the complaint reads. "Allowing Templeton and Hoffman to serve as members of OpenAI's .... board undermined this purpose. " Per the amended complaint, Zilis, who stepped down from OpenAI's board in 2023 after serving as a member for roughly four years, has standing as an "injured employee" under California Corporations Code. Zilis repeatedly raised concerns over OpenAI's dealmaking internally that fell on deaf ears -- concerns substantially similar to Musk's, according to the complaint. Zilis has close ties to Musk, having worked as a project director at Tesla from 2017 to 2019 in addition to directing Neuralink research. (Neuralink is Musk's brain-computer interface venture.) She's also the mother of three of Musk's children. The 107-page amended complaint includes the unusual detail that Altman proposed OpenAI sell its own cryptocurrency in September 2017 -- a proposal Musk supposedly shot down. The thrust of the lawsuit remains the same on the plaintiff side: that OpenAI profited from Musk's early involvement in the company yet reneged on its nonprofit pledge to make the fruits of its AI research available to all. "No amount of clever drafting nor surveit of creative dealmaking can obscure what is happening here," reads the complaint. "OpenAI, Inc., co-founded by Musk as an independent charity committed to safety and transparency ... [is] fast becoming a full for-profit subsidiary of Microsoft."

Elon Musk Expands His Grudge Against OpenAI to Include Microsoft

The new lawsuit includes a detailed list of the ways OpenAI CEO Sam Altman manipulated the world's richest man. Elon Musk has expanded his lawsuit against OpenAI and its founder Sam Altman to include Microsoft and LinkedIn co-founder Ried Hoffman. The amended 107-page lawsuit is an incredible document that tells Musk's side of the story. To hear the richest man in the world tell it, he was seduced by Altman’s pitch of a world filled with safe AI and devastated to learn that OpenAI had teamed with Microsoft to make money. “Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgonâ€"and in just eight years,†the lawsuit said. “Never before has it happened, because doing so violates almost every principle of law governing economic activity. It requires lying to donors, lying to members, lying to markets, lying to regulators, and lying to the public.†The feud between Musk and Altman has been going on for years. Musk co-founded OpenAI with Altman in 2015 and dumped a bunch of money into the venture, some $44 million, before leaving the company in 2018. According to the lawsuit, Altman approached Musk and sold him on a non-profit vision of the company. It was to be a corporation that pursued AI with human safety in mind. Then, Altman betrayed Musk by turning to Microsoft and attempting to turn a profit. “OpenAI, Inc., co-founded by Musk as an independent charity committed to safety and transparencyâ€"and nurtured in its infancy by Musk’s money, advice, recruiting efforts and connectionsâ€"is, at the direction of Altman, Brockman, and Microsoft, fast becoming a fully for-profit subsidiary of Microsoft,†the lawsuit said. “Altman, in concert with other Defendants, intentionally courted and deceived Musk, preying on Musk’s humanitarian concern about the dangers posed by AI.†Open AI has a weird structure. A non-profit corporate board controls the company and it was originally started with the idea that it would take donations, scale up, and develop artificial general intelligence safely and for the benefit of humanity. Then it realized it needed to make money and it started selling products like ChatGPT. The non-profit board is still in charge, but things are complicated. According to the lawsuit, Musk is mad they decided to start making money at all. “As a result of their unlawful actions, Defendants have been unjustly enriched to the tune of hundreds of billions of dollars in value, while Musk has been conned along with the public,†the lawsuit said. Musk also detailed the Terminator-style future he thinks AI will create in the lawsuit. “These dangers include, without limitation (or exaggeration), completely replacing the human workforce, supercharging the spread of disinformation, malicious human impersonation, and the manipulation of political and military systems (which military-related contracting OpenAI is now reported to be pursuing aggressively), ultimately leading to the extinction of humanity,†it said. The lawsuit includes twenty-six separate accusations including two criminal violations of the Rico Act, which the feds use to bust up organized crime. The addition of Microsoft and Hoffman to the lawsuit is a new twist in a long and weird legal journey. Musk initially filed the lawsuit in March of this year, withdrew it in July, and then filed it again in August. In response to the initial filing, OpenAI published emails Musk sent to the company when he was still a part of it. Its story is more simple than Musk’s. According to OpenAI, Musk tried to take over the company and forcibly merge it with Tesla. When he didn't get his way, he left.

Elon Musk Adds Antitrust Claims to Lawsuit Against OpenAI | PYMNTS.com

In his expanded lawsuit, Musk accused OpenAI CEO Sam Altman of "rampant self-dealing" between OpenAI and other companies; charged that Altman pushed the company into a "de facto merger" with Microsoft; and alleged that OpenAI and Microsoft discouraged its investors from investing in its competitors, including Musk's xAI. "Microsoft and OpenAI, apparently unsatisfied with their monopoly, or near so, in generative artificial intelligence are now actively trying to eliminate competitors, such as xAI, by extracting promises from investors not to fund them," the complaint said. Musk filed a complaint in February alleging that OpenAI and Altman broke the company's founding agreement by focusing on profits over benefits to humanity and by developing a close relationship with Microsoft. In August, Musk added claims of unfair business practices and allegations that, as one who helped launch OpenAI, he was manipulated into believing it would be a nonprofit. Responding to the newly amended lawsuit, an OpenAI spokesperson told The Wall Street Journal Friday (Nov. 15): "Elon's third attempt in less than a year to reframe his claims is even more baseless and overreaching than the previous ones." It was reported in September that OpenAI was planning to restructure its core business into a for-profit benefit corporation that won't be controlled by its nonprofit board. Asked about the report by Reuters at the time, an OpenAI spokesperson said: "We remain focused on building AI that benefits everyone, and we're working with our board to ensure that we're best positioned to succeed in our mission. The nonprofit is core to our mission and will continue to exist." In October, OpenAI raised $6.6 billion in new funding and nearly doubled its valuation to $157 billion -- a figure that put it in the same market capitalization territory as Uber, AT&T and Goldman Sachs.

Elon Musk adds Microsoft to lawsuit against ChatGPT-maker OpenAI

"As a result of their unlawful actions, defendants have been unjustly enriched to the tune of hundreds of billions of dollars in value, while Mr Musk has been conned along with the public," it says. OpenAI was founded in 2015 with the aim of building an artificial general intelligence (AGI) - generally taken to mean AI that can perform any task a human being is capable of. In 2019, the firm announced a new "capped profit" structure allowing it to raise money. Microsoft made an initial $1bn investment into OpenAI shortly thereafter - increasing this to a multi-year, multi-billion dollar partnership in 2023. The lawsuit also accuses boss Sam Altman - a named defendant in the lawsuit - of "rampant self-dealing". Mr Musk's initial legal action filed in March argued the agreement had transformed it into "a closed-source de facto subsidiary" of the PC giant. OpenAI denied his claims, countering that Mr Musk had previously backed the idea of a for-profit structure. It said in a blog post on its website that the billionaire had at one point wanted "absolute control" of the company. The renewed claims by Mr Musk come the same week that US President-elect Donald Trump has picked him for a role in government cost-cutting, as part of his drive to "dismantle" bureaucracy when he returns to the White House next year.

Elon Musk Escalates Fight With OpenAI & Microsoft With Revised Lawsuit

The lawsuit alleges OpenAI and Microsoft control nearly 70% of the generative AI market. Billionaire entrepreneur Elon Musk has intensified his battle against OpenAI and Microsoft by filing a revised lawsuit on November 14. The legal move accuses the tech giants of monopolistic practices in the generative AI sector. Musk's company, xAI, and Shivon Zilis, a Neuralink executive and former OpenAI board member, are among the plaintiffs challenging the alleged anticompetitive collaboration. Elon Musk Revises Lawsuit Against OpenAI & Microsoft The amended lawsuit filed by Elon Musk on November 14 claims that OpenAI and Microsoft have formed a "de facto merger," leveraging their combined dominance to stifle competition in the AI industry. The complaint accuses the companies of recruiting AI talent through extravagant salaries, reportedly spending $1.5 billion for a workforce of 1,500. Notably, reports indicate some OpenAI engineers earn up to $800,000 annually, including bonuses and stock options. Besides, the lawsuit also alleges that OpenAI discouraged investors from funding rival AI companies during a recent $6.6 billion fundraising round. Previously, several reports claimed that this stipulation aimed to block competitors, including Musk's xAI, from securing critical investments. Despite these claims, SoftBank, which contributed $500 million to OpenAI's funding round, has stated it retains the freedom to back other AI ventures. Meanwhile, lawyers for Musk argue the partnership between Microsoft and OpenAI creates a monopolistic environment, with the duo controlling nearly 70% of the generative AI market. The complaint suggests Microsoft has embedded itself deeply within OpenAI operations, blurring the lines between the two entities. Escalating Rivalry With OpenAI The amended lawsuit builds upon a series of disputes between Elon Musk and OpenAI. In March, Musk filed an initial suit against the AI firm and its founders, Sam Altman and Greg Brockman, accusing them of abandoning their nonprofit mission. Musk later withdrew the lawsuit without explanation but reignited the legal battle in August. The new lawsuit also highlights OpenAI's shift to a for-profit model, which Musk claims betrays its original mission to advance AI for the benefit of humanity. Musk, who co-founded OpenAI in 2015, has alleged he was misled into supporting the organization, which now prioritizes commercial interests over ethical development. Notably, this report comes as Sam Altman's OpenAI is gearing up to launch a new artificial intelligence tool named Operator. Besides, the AI firm has also pulled funding of $6.6 billion recently, which puts its valuation at $157 billion.

Elon Musk Accuses ChatGPT-Maker OpenAI of Being a 'Market-Paralyzing Gorgon': Lawsuit

He accuses OpenAI of now transforming into a for-profit arm of Microsoft and actively trying to eliminate competitors. Elon Musk sued OpenAI earlier this year, alleging that the company broke its founding agreement and is working to maximize profits for Microsoft instead of humanity, as a whole. Though Musk withdrew the lawsuit in June, he later revived it in August -- and now he's expanding the complaint to include Microsoft, LinkedIn co-founder and Microsoft board member Reid Hoffman, and Microsoft vice president of partnerships and operations Deannah Templeton as defendants. They join original defendants OpenAI, its CEO Sam Altman, and its president Greg Brockman. The 107-page complaint was filed on Thursday in U.S. District Court for the Northern District of California. In it, Musk accuses OpenAI of going from a "tax-exempt charity" to a "for-profit, market-paralyzing gorgon." Musk alleges in the complaint that he "nurtured" OpenAI "in its infancy" with his "money, advice, recruiting efforts and connections." Musk says he played a part in OpenAI's origin story by recruiting key executives, including former chief scientist Ilya Sutskever, and putting more than $44 million in cash behind the company. Musk was involved in OpenAI from its founding in December 2015 to his resignation from the board in February 2018. Related: Elon Musk Sues ChatGPT-Maker OpenAI "It is fair to say that without Musk's involvement, backing, and substantial supportive efforts, there would have been no OpenAI," the lawsuit states. OpenAI released ChatGPT in November 2022 in a move that kickstarted the AI boom. ChatGPT had more than 200 million weekly users as of August and was worth $157 billion as of October. The complaint accuses OpenAI of now transforming into a for-profit arm of Microsoft and actively trying to eliminate competitors like Musk's xAI by making investors promise not to fund them. xAI raised $6 billion in May and is in talks to raise $6 billion more. Musk brings this legal action against OpenAI to "divest Defendants of their ill-gotten gains and ensure OpenAI maintains its namesake mission to develop safe and open AI for the public good." The updated lawsuit adds xAI as a plaintiff, along with Shivon Zilis, who is an executive at Musk's Neuralink, a former OpenAI board member, and the mother of three of Musk's twelve children. Musk is still listed as a plaintiff too. Musk is the richest person in the world at the time of writing, with a net worth of $307 billion.

Musk names Microsoft as a defendant in amended OpenAI lawsuit

Elon Musk at a Neuralink event. Image: Steve Jurvetson/Flickr (CC BY 2.0) The X owner dropped a lawsuit against the AI start-up this summer but promptly picked it up again. Tech giant Microsoft has been named as a defendant in Elon Musk's amended lawsuit against OpenAI. Musk, who is the world's richest person, was one of the original founders of OpenAI, which was established as a non-profit organisation in 2015. However, he left the company in 2018 following disagreements about its direction. It was first announced back in February that the Tesla and X owner would be suing OpenAI and Sam Altman for profiting from artificial intelligence (AI). "OpenAI has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft," the lawsuit filed on 29 February read. Musk and his lawyers argued that the objective of the lawsuit is to compel OpenAI to adhere to the founding agreement and return to its mission to develop AI for the benefit of humanity, not for profit. In July, Musk's lawsuit was withdrawn for undisclosed reasons before being revived a month later. The amended lawsuit also adds two new plaintiffs: Neuralink exec and former OpenAI board member Shivon Zilis and Musk's AI company, xAI. In the complaint, Musk's legal representatives argue that OpenAI is now "actively trying to eliminate competitors, such as xAI, by extracting promises from investors not to fund them". The suit also alleges that OpenAI unfairly benefits from Microsoft's infrastructure and experience. OpenAI disagrees with Musk's assertions. In October, it filed a motion for dismissal of the previous suit, calling it "blusterous". This week has proven to be yet another busy week for Musk: US president elect Donald Trump appointed him to the newly created Department of Government Efficiency (DOGE). He will co-lead the DOGE alongside former Republican presidential candidate Vivek Ramaswamy. Since Trump's election, Musk's platform X has seen an exodus of followers to rival apps Bluesky and Threads. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news. Elon Musk at a Neuralink event. Image: Steve Jurvetson via Flickr (CC BY 2.0)

Elon Musk amends lawsuit against ChatGPT maker OpenAI

Nov. 15 (UPI) --Elon Musk accused OpenAI of colluding with Microsft in an amended lawsuit against the ChatGPT maker. Court documents filed by Musk on Thursday detailed the amended claims, alleging the artificial intelligence tech firm is colluding with other AI companies, including Microsoft, in order to stifle competition. The billionaire Tesla founder originally sued OpenAI earlier this year, claiming it no longer operated as a non-profit entity dedicated to safe and open AI, as laid out in the company's founding principles. "Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon -- and in just eight years," Musk's lawyers wrote in the court filing. Musk and his legal team argued that OpenAI is instead creating an "unlawful competitive advantage" by preventing other companies from licensing its technology. He also claimed the partnership between OpenAI and Microsoft creates an unlevel playing field, making it difficult for competing tech companies to secure investments. In amending the claims of the lawsuit, Musk also named new plaintiffs in Microsoft and LinkedIn co-founder Reid Hoffman, and former OpenAI board member Shivon Zilis. Zilis is the mother of three of Musk's children and an executive at Neuralink, the billionaire's neurotechnology company. Hoffman's artificial intelligence company, company xAI was also added to the lawsuit. Musk helped found the tech firm in 2015 but resigned from its board of directors in 2018 because of a possible conflict of interest over Tesla's self-driving vehicles. This past June, Musk dropped a separate lawsuit against two of his OpenAI co-founders, San Altman and Greg Brockman.

Elon Musk targets Microsoft in amended OpenAI lawsuit

Microsoft has invested $14 billion in OpenAI since 2019 and holds exclusive rights to commercially license the AI startup's technology and a 49 percent stake in its for-profit subsidiary. Musk's lawyers say that former OpenAI CEO Sam Altman "engaged in rampant self-dealing" to create a "de facto merger" between the two companies to promote anticompetitive practices. The lawsuit argues that OpenAI and Microsoft are "actively trying to eliminate competitors" by exchanging "competitively sensitive information," and making their investors refrain from funding rival companies like xAI, Musk's AI company. Both companies are competing for funding in the growing AI market, with OpenAI securing $6.6 billion in October to build more powerful AI models. xAI raised $6 billion in its own funding round in March to accelerate its development of "future technologies."

Musk escalates Altman legal feud, casting OpenAI as monopolist

Elon Musk escalated his legal battle with Sam Altman, alleging OpenAI is monopolizing the generative AI market. Musk claims OpenAI, initially a non-profit, is prioritizing profit over safety. He expressed concerns over OpenAI's contracts with the Department of Defense and removal of safety clauses from its policies.Elon Musk is ramping up his feud with Sam Altman, alleging in a court filing that OpenAI is trying to corner the market for generative artificial intelligence and sacrificing safety in a race to get ahead. In a revised version of a lawsuit he filed in August, Musk highlighted antitrust concerns about OpenAI's journey from its nonprofit roots in 2015 - when he and Altman worked together as founders - to its current effort to restructure as a for-profit company following billions of dollars in outside investment by Microsoft and others. Musk, who launched his xAI startup last year, said OpenAI has now abandoned all pretense of proceeding as a charity to benefit humanity with a focus on openness and safety as it tries to complete its restructuring under a two-year deadline. "Microsoft and OpenAI, apparently unsatisfied with their monopoly, or near so, in generative artificial intelligence ("AI") are now actively trying to eliminate competitors, such as xAI, by extracting promises from investors not to fund them," lawyers for the billionaire wrote in the amended complaint filed late Thursday in federal court in Oakland, California. OpenAI didn't immediately respond outside regular business hours to a request for comment. In October, it called Musk's federal suit - which followed a state-court suit that Musk dropped - the latest bid in an "increasingly blusterous campaign to harass OpenAI for his own competitive advantage." The revised suit lists 26 legal claims and runs 107 pages, compared with 15 claims in the 83-page original complaint. Musk also expressed concern that OpenAI has "started to contract with the Department of Defense" and removed a clause from its usage policies banning the use of its technology for "activity that has a high risk of physical harm" such as "weapons development" or "military and warfare."