Elon Musk Files Injunction to Block OpenAI's For-Profit Transition Amid Antitrust Concerns

Elon Musk launches new attack at OpenAI to prevent its much-wanted evolution

Elon Musk has seized his opportunity to prevent OpenAI from converting into a for-profit company, with the Tesla CEO filing for an injunction against OpenAI co-founder and CEO Sam Altman. The SpaceX and Tesla CEO has long been after OpenAI since the non-profit took an investment of $13 billion from Microsoft, claiming the company Musk originally helped create as a counterweight to Google, and the rapid development of artificial intelligence has now strayed away from its original non-profit mission of bringing transparency to artificial intelligence. Now, Musk has filed an injunction that will be heard in early January next year at the United States District Court, Northern District of California. The injunction requests that OpenAI be prevented from performing activities such as investing in OpenAI's competitors - even xAI, Elon Musk's own AI company, utilizing "wrongfully obtained competitively sensitive information" through OpenAI's partnership with Microsoft, its conversion from a non-profit company into a for-profit company, and the transferring of any OpenAI assets to competitors, subsidiaries, or affiliates. Musk has also claimed in previous complaints that OpenAI swindled him out of $44 million by preying on "well-known concerns about the existential harms" of AI. "Plaintiffs and the public need a pause," they wrote in the filing. "An injunction to preserve what is left of OpenAI's nonprofit character, free from self-dealing, is the only appropriate remedy. If not, the OpenAI promised to Musk and the public will be long gone by the time the court reaches the merits." "Maintaining OpenAI's charitable status pending final resolution and halting further self-dealing transactions by Altman protect both the organization's founding mission and the public interest in proper administration of charities," Musk's attorneys said in the filing.

Elon Musk seeks injunction to block OpenAI's plans to become...

Elon Musk has asked a federal judge to block Sam Altman's OpenAI from completing plans to become a for-profit entity - arguing that it would cause "irreparable harm" to the public. In the filing late Friday in US District Court in San Francisco, Musk accused Altman of running afoul of antitrust law through the OpenAI's collaboration with Microsoft, which has poured billions into the ChatGPT maker. "Plaintiffs and the public need a pause," the filing says. "OpenAI's path from a non-profit to a for-profit behemoth is replete with per se anticompetitive practices, flagrant breaches of its charitable mission and rampant self-dealing." "It cannot lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interests of Microsoft and Altman at any given moment," the filing added. The demand for a preliminary injunction marked an escalation in Musk's long-running feud with Altman. The two tech titans once collaborated as co-founders of OpenAI but have since become bitter rivals with competing artificial intelligence projects. The injunction was filed on behalf of lawyers for Musk, his artificial intelligence startup xAi and former OpenAI board member Shivon Zilis - an executive at the brain chip company Neuralink who is also the mother of three of Musk's children. Musk's legal team zeroed in on OpenAI's partnership with Microsoft as cause for concern. "Whatever leeway OpenAI might have been due under antitrust law as a purported charity it chose to forego when it subordinated itself to Microsoft for profit," the filing said. "OpenAI must therefore play by the same rules as everyone else." OpenAI blasted Musk's latest bid in a statement, calling it "utterly without merit" and accusing him of recycling arguments from previous legal challenges. Musk was initially one of OpenAI's key investors, but ended his involvement after falling out with Altman. The X, Tesla and SpaceX boss first filed suit against OpenAI in March, only to withdraw the complaint and refile it in August. The updated complaint described Musk's dispute of Altman as a "textbook tale of altruism versus greed." Musk accused Altman of deceiving him into forking over more than $44 million to bankroll OpenAI in its early days with a promise of developing safe AI for the benefit of mankind, only to abandon that mission in order to enrich himself and key investors, including Microsoft. The lawsuit was expanded last month when Musk's lawyers cited federal antitrust complaints and added Microsoft as a defendant. Musk has also stepped up his rhetoric against Altman personally, calling him "Swindly Sam" in a recent X post. Musk's attempt to block OpenAI's plans is another wrinkle in what has already been a complicated process for Altman and his allies. The firm is planning to restructure as a public benefit corporation, in which its leaders would weigh both societal impact and profit when making decisions. Musk's xAI and Amazon-backed Anthropic use the same structure. The nonprofit arm that has governed OpenAI since 2015 would continue to exist but it would no longer be in control. OpenAI's recent $6.6 billion fundraising round included a stipulation allowing investors such as Josh Kushner's Thrive Capital to renegotiate the company's valuation - or even receive their money back entirely - if the shift from non-profit to for-profit isn't completed within two years. OpenAI is reportedly pursuing the change in part to insulate Altman from "hostile takeovers" by activist investors or executives - such as the one that briefly led to his firing by a previous version of the company's board of directors late last year.

Elon Musk Seeks Injunction To Prevent OpenAI Going For Profit

X CEO Elon Musk has filed yet another motion against OpenAI, this time asking the court for an injunction to prevent OpenAI from becoming a fully for-profit enterprise. The filing also asked for the injunction to stop OpenAI from telling its investors not to fund competitors, like his own start-up xAI. Musk's legal team claimed that "irreparable harm" will be caused if the injunction isn't granted. "Plaintiffs and the public need a pause," read the filing. "An injunction to preserve what is left of OpenAI's nonprofit character, free from self-dealing, is the only appropriate remedy." "If not, the OpenAI promised to Musk and the public will be long gone by the time the court reaches the merits." It adds that the "sheer number of affected parties would make it virtually impossible to reverse the charity's conversion without causing widespread investor losses and market disruption." In addition to OpenAI, the filing also names OpenAI's CEO Sam Altman, its President Greg Brockman, Microsoft and LinkedIn co-founder, and former OpenAI board member Reid Hoffman, and Microsoft VP Dee Templeton. The news comes as OpenAI is currently in talks with California regulators about transitioning to a for-profit structure, if Bloomberg's reports from earlier this month are correct, a deal which could also give founder Sam Altman a 7% stake. OpenAI launched in 2015 as a nonprofit and then became a "capped-profit" firm in 2019, a structure where the nonprofit parts of the firm govern the for-profit subsidiary. Musk -- one of OpenAI's earliest investors -- first launched his case against OpenAI in March 2024, accusing it of violating unfair competition laws and defrauding investors, including himself. Musk's legal team has been gradually adding to it since then. In November, Musk's lawyers expanded the case to include Microsoft in the allegations and accused OpenAI of asking investors not to invest in its competitors. including xAI. "Elon's fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit," an OpenAI spokesperson said in a statement. The latest piece of legal action; comes as Musk is increasingly becoming a direct competitor of OpenAI. In September, he announced that his general AI start-up xAI will expand its a supercomputer in Memphis, Tennessee, to 200,000 GPUs; an investment likely worth billions.

Elon Musk files an injunction to stop OpenAI from becoming a for-profit

The latest installment of Musk versus Altman and OpenAI. Credit: Avishek Das / SOPA Images / LightRocket / Getty Images Elon Musk asked a court to stop Sam Altman, Greg Brockman, OpenAI, and other co-defendants from transitioning the ChatGPT maker into a for-profit enterprise. Per TechCrunch, Musk filed a motion on Friday evening in the U.S. District Court for the Northern District of California, accusing Altman, Brockman, OpenAI board members, and stakeholder Microsoft of "violating the terms of Musk's foundational contributions to the charity," and engaging in anticompetitive behavior as OpenAI seeks to convert from non-profit to for-profit status. "Plaintiffs and the public need a pause," said the court filing. "OpenAI's path from a non-profit to for-profit behemoth is replete with per se anticompetitive practices, flagrant breaches of its charitable mission, and rampant self-dealing." Musk was an early investor and board member of OpenAI, but broke ties with the company in 2018. He later claimed Altman and Brockman violated their agreement of maintaining its non-profit status and developing open-source AI technology. In the past year, Musk has filed a lawsuit for breaching this contract, dropped the lawsuit, and then filed a new "more forceful" lawsuit based on the same claims. Now, Musk seeks an injunction "to preserve what is left of OpenAI's nonprofit character, free from self-dealing," according to the motion. "If not, the OpenAI promised to Musk and the public will be long gone by the time the Court reaches the merits." Musk's injunction accuses OpenAI of engaging in behavior that merits halting the company's conversion. Allegations include an agreement obtained from OpenAI investors to not fund competitors like Musk's xAI, "exclusive arrangements" between OpenAI and Microsoft to collectively achieve market dominance of generative AI products, and Altman's "rampant self-dealing" through OpenAI contracts between companies like Stripe, Rain AI, Helion Energy, and Reddit, where he has financial interests. In a statement to TechCrunch, an OpenAI spokesperson said "Elon's fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit."

Elon Musk Files Injunction to Block OpenAI's 'Frankenstein' For-Profit Transition

Earlier this year, Musk sued OpenAI for reneging on the terms of an agreement to operate the enterprise as a non-profit. In the ongoing legal battle between Elon Musk and OpenAI, Musk has asked the court to grant an injunction barring OpenAI from completing its conversion to a for-profit company pending the litigation's resolution. Musk's lawyers repeated their argument that OpenAI founders Sam Altman and Greg Brockman broke the terms of an agreement to run the enterprise as a non-profit. They also called on the judge to halt perceived uncompetitive practices they argue distort the AI market. OpenAI's For-Profit Transition Details of OpenAI's proposed new structure first emerged in September. Under the plan, the non-profit board that currently oversees OpenAI's operations will be sidelined. The core business would then be transformed into a for-profit benefit corporation. The non-profit board would still own a minority stake in OpenAI. However, its role would be severely diminished as other stakeholders, including Altman himself, are granted more sway. In documents submitted to the court on Friday, Nov. 29, Musk's attorneys said it was inappropriate for OpenAI to complete such a conversion now, while the very question of the organization's for-profit status is the subject of ongoing litigation. The lawsuit takes issue with OpenAI's original move to set up a profit-making entity under the board's control in 2019. Issues With Microsoft For Musk, OpenAI getting into bed with Microsoft appears to have been a major contributing factor behind his decision to sue. From his perspective, not only did OpenAI betray its original non-profit mission, but it also did so by partnering with one of the very big tech giants whose influence over AI it was intended to counter. Back in 2016, when Musk was still involved in the then-recently formed OpenAI, he expressed skepticism that Microsoft could bring anything positive to the table. Meanwhile, the prospect of Google Deepmind dominating the nascent AI sector caused him "extreme mental distress," emails recently disclosed as part of the lawsuit revealed. In the latest filing, the plaintiffs claim that OpenAI and Microsoft, "through a series of exclusive arrangements, interlocking directorates, and predatory practices," have "seized control of nearly 70% of the market for generative artificial intelligence products." Accordingly, "whatever leeway OpenAI might have been due under antitrust law as a purported charity it chose to forego when it subordinated itself to Microsoft for profit," and now must "play by the same rules as everyone else," the document stated: "It cannot lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interests of Microsoft and Altman at any given moment." Antitrust Allegations Musk's lawyers also asked for an injunction to halt the implementation of OpenAI's proposed new structure and called on the judge to halt OpenAI's practice of asking investors not to back rival startups. The arrangement, reportedly included as a provision as OpenAI seeks fresh funding, allegedly targets companies including Anthropic and Musk's xAI, which is also named as a plaintiff in the ongoing lawsuit. OpenAI's "Fund No Competitors Edict" is a direct violation of the Sherman Antitrust Act, the latest motion stated. According to Musk, at least one major investor in OpenAI's October 2024 funding round subsequently declined to invest in xAI. Any legal ruling on the matter could be crucial for Microsoft and OpenAI. The two firms have been subject to merger inquiries in the EU and U.K. and will likely be scrutinized by the Federal Trade Commission (FTC) as part of a wider Microsoft antitrust investigation.

Elon Musk tries to block OpenAI's for-profit transition in latest legal tussle - SiliconANGLE

Elon Musk tries to block OpenAI's for-profit transition in latest legal tussle Technology entrepreneur Elon Musk has filed an injunction with a federal court, asking it to stop OpenAI from transforming itself into a fully for-profit business. In the filing for a preliminary injunction, Musk, along with his artificial intelligence startup xAI Corp. and former OpenAI board member Shivon Zillis is also seeking to stop the company from preventing its investors from funding competing AI firms. It's the latest salvo from Musk in his ongoing legal feud with OpenAI and its Chief Executive Officer Sam Altman, plus other long-term backers of the company, such as the investor Reid Hoffman and Microsoft Corp. Musk first sued OpenAI in March, filing a complaint in a San Francisco court that was later withdrawn, before being refiled several months later in a federal court. In that suit, attorneys for Musk, led by Marc Toberoff, complained that OpenAI has violated a number of federal racketeering, or RICO laws. Last month, Musk's legal team expanded that complaint, saying that OpenAI and Microsoft were also guilty of breaching antitrust laws because they forced investors to agree that they would not fund rival companies, including xAI. In the latest filing, Musk's attorneys argue that OpenAI should be blocked from seeing any business benefits from "wrongfully obtained competitively sensitive information or coordination via the Microsoft-OpenAI board interlocks". A spokesperson for OpenAI told TechCrunch that "Musk's fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit." OpenAI has emerged as the darling of the AI industry thanks to the success of its ChatGPT model, which kicked off an unprecedented era of hype around large language models and their capabilities. Musk's xAI is one of the most prominent rivals to OpenAI. Having launched in July 2023, it has announced an alternative chatbot called Grok that's available for free, with additional premium capabilities for X subscribers. xAI has already raised more than $6 billion at a $24 billion valuation, and it's now said to be seeking another round that would bring its value to $50 billion. In the complaint, lawyers for Musk insist that OpenAI and Microsoft are seeking to cement their dominance of the AI industry by "cutting off competitors' access to investment capital." They say that OpenAI is forcing investors in the company to agree to terms that amount to a "group boycott", limiting xAI and other AI firms' ability to raise investment capital. The lawyers also insist that OpenAI cannot be allowed to "lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interest of Microsoft." Microsoft's backing of OpenAI has gotten a lot of scrutiny. In January, Federal Trade Commission Chair Linda Khan said her agency will initiate an investigation into the investments and partnerships being formed between cloud services providers and AI developers, naming companies including OpenAI, Microsoft, Alphabet Inc., Amazon.com Inc. and Anthropic PBC. In response, Microsoft has tried to disentangle itself from OpenAI somewhat, and recently gave up its observer seat on the company's board of directors, though the FTC has stated it will continue to monitor its influence over the AI industry. OpenAI was launched in 2015 as a non-profit organization, but four years later it metamorphosized into a "capped-profit" structure, wherein OpenAI's nonprofit organization became the governing entity of a for-profit subsidiary. Now, OpenAI is trying to transition again to become a fully for-profit public benefit corporation, which would make it much more attractive to investors. As part of that plan, OpenAI intends to retain a separate non-profit entity. Microsoft has already invested almost $14 billion into OpenAI, but in its fiscal first quarter earnings report in October, it revealed it will post a $1.5 billion loss during the current period, due to an unexpected loss relating to the AI company. That same month, OpenAI closed on its latest blockbuster funding round, raising $6.6 billion at a $157 billion valuation, with participation from Microsoft, Nvidia Corp. and others.

Elon Musk seeks injunction to block OpenAI's for-profit transition

Attorneys representing tech billionaire and xAI Founder Elon Musk have sought a preliminary injunction against artificial intelligence startup OpenAI from turning into a for-profit enterprise. The motion further calls for the proposed injunction to prevent OpenAI from requiring its investors not to invest in market rivals, including xAI and other companies. Filed before the United States District Court for the Northern District of California, the motion accuses OpenAI, company CEO Sam Altman, President Greg Brockman, and investor Microsoft among others, of a series of alleged unlawful activities. These include: The motion by Musk states that the plaintiffs would be "irreparably harmed" if the proposed injunction is not issued and that they are likely to succeed "on the merits of their claims." The court filing notes that OpenAI's hold on its investors so as to not invest in market competitors has "directly caused harm to Musk and xAI," adding that it "harms competition in a way that antitrust laws were meant to prevent." "The Sherman [Antitrust] Act prohibits group boycotts because they are designed to drive existing competitors out of the market or to prevent new competitors from entering, thus leaving consumers with fewer choices, higher prices, and lower-quality products. . . . The Supreme Court has long recognized that 'competitors may be able to prove antitrust injury before they actually are driven from the market and competition is thereby lessened'" it said. It further stated, "Depriving xAI of capital and investment -- especially in a market with a powerful first-mover advantage and strong network effects that raise additional competitive barriers, impairs its ability to compete. That in turn reduces consumer choice. Fewer options for consumers mean dominant players like OpenAI and Microsoft are under less competitive pressure and have less incentive to ensure the safety of their products." Accusations of Self-dealing Significantly, the motion claims that it makes a strong prima facie case about OpenAI CEO Sam Altman having "engaged in, or is preparing to engage in" activities indicative of 'self-dealing': The lawsuit comes at a time of significant financial pressure. OpenAI reportedly faced a $5 billion loss in 2024. Microsoft has invested approximately $13 billion in the company, acquiring what amounts to a 49% stake in its earnings. Elon Musk launched xAI last year, which has developed its own AI model, Grok. Recent reports suggest that xAI is working on a standalone app for the Grok AI chatbot. Elon Musk, notably, dropped a lawsuit he filed against OpenAI earlier this year, without providing a reason. Filed on February 29, 2024, it had originally accused Sam Altman of having violated the alleged "founding agreement" that called for Artificial Generative Intelligence for the "benefit of humanity" and not for commercial interests.

Elon Musk asks court to block OpenAI from converting to a for-profit

Attorneys representing Musk, his AI startup xAI, and former OpenAI board member Shivon Zilis filed for a preliminary injunction against OpenAI on Friday. The injunction would also stop OpenAI from allegedly requiring its investors to refrain from funding competitors, including xAI and others. The latest court filings represent an escalation in the legal feud between Musk, OpenAI and its CEO Sam Altman, as well as other long-involved parties and backers including tech investor Reid Hoffman and Microsoft. Musk had originally sued OpenAI in March 2024 in a San Francisco state court, before withdrawing that complaint and refiling several months later in federal court. Attorneys for Musk in the federal suit, led by Marc Toberoff in Los Angeles, argued in their complaint that OpenAI has violated federal racketeering, or RICO, laws. In mid-November, they expanded their complaint to include allegations that Microsoft and OpenAI had violated antitrust laws when the Chat GPT-maker allegedly asked investors to agree to not invest in rival companies, including Musk's newest startup, xAI. "Elon's fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit," an OpenAI spokesperson said in a statement. Microsoft declined to comment. Musk is also asking the court to limit allegedly improper business advantages stemming from OpenAI's close relationship with Microsoft, its key backer and partner. OpenAI has emerged as one of the biggest startups in recent years, with ChatGPT becoming a major hit that has helped usher massive corporate enthusiasm over AI and related large language models. Since Musk announced xAI's debut in July 2023, his newer AI business has released its Grok chatbot and is raising up to $6 billion at a $50 billion valuation, in part to buy 100,000 Nvidia chips, CNBC reported earlier this month. "Microsoft and OpenAI now seek to cement this dominance by cutting off competitors' access to investment capital (a group boycott), while continuing to benefit from years' worth of shared competitively sensitive information during generative AI's formative years," the lawyers wrote in the filing. The attorneys wrote that the terms OpenAI asked investors to agree to amounted to a "group boycott" that "blocks xAI's access to essential investment capital." The lawyers later added that OpenAI "cannot lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interests of Microsoft." In July, Microsoft gave up its observer seat on OpenAI's board, although CNBC reported that the Federal Trade Commission would continue to monitor the influence of two companies over the AI industry. OpenAI originally debuted in 2015 as a non-profit and then in 2019, converted into a so-called capped-profit model, in which the OpenAI non-profit was the governing entity for its for-profit subsidiary. It's in the process of being converted into a fully for-profit public benefit corporation that could make it more attractive to investors. The restructuring plan would also allow OpenAI to retain its non-profit status as a separate entity, CNBC previously reported. Microsoft has invested nearly $14 billion in OpenAI but revealed in October as part of its fiscal first-quarter earnings report that it would record a $1.5 billion loss in the current period largely due to an expected loss from OpenAI. In October, OpenAI closed a major funding round that valued the startup at $157 billion. Thrive Capital led the financing while investors, including Microsoft and Nvidia, also participated. OpenAI has faced increasing competition from startups such as xAI, Anthropic and tech giants such as Google. The generative AI market is predicted to top $1 trillion in revenue within a decade, and business spending on generative AI surged 500% this year, according to recent data from Menlo Ventures. CNBC reached out to attorneys for Musk on Saturday. They did not respond to requests for comment.

Elon Musk asks court to stop OpenAI from becoming a for-profit

A new filing accuses OpenAI and Microsoft of anticompetitive practices. Elon Musk's attorneys filed for an injunction against OpenAI and Microsoft on Friday accusing the two of anticompetitive practices and seeking to stop OpenAI's conversion to a for-profit company. The filing, spotted by , also names OpenAI CEO Sam Altman, OpenAI President Greg Brockman, Microsoft's Dee Templeton and LinkedIn co-founder Reid Hoffman as defendants. Musk first for allegedly violating its founding mission of building AI "for the benefit of humanity," but a few months later. He then in a California federal court in August, and recently . The new motion accuses OpenAI and Microsoft of telling investors not to fund OpenAI's competitors, such as Musk's xAI, of "benefitting from wrongfully obtained competitively sensitive information or coordination" through its relationship with Microsoft, and other alleged antitrust violations. "OpenAI's path from a non-profit to for-profit behemoth is replete with per se anticompetitive practices, flagrant breaches of its charitable mission, and rampant selfdealing," it states. "Allowing this course of conduct to continue until final disposition will seriously harm Plaintiffs and the public at large." It comes a few months after it was reported that OpenAI is model. In statement shared with Engadget in response to Musk's latest filing, an OpenAI spokesperson said, "Elon's fourth attempt, which again recycles the same baseless complaints, continues to be ."

Elon Musk files for injunction to halt OpenAI's transition to a for-profit | TechCrunch

Attorneys for tech billionaire Elon Musk have filed for a preliminary injunction against OpenAI, several of its co-founders, and its investor and close collaborator, Microsoft, to prevent OpenAI and other named defendants from engaging in what Musk's counsel claims is anticompetitive behavior. The motion for an injunction, which was filed late on Friday in the U.S. District Court for the Northern District of California, accuses OpenAI, its CEO Sam Altman, President Greg Brockman, Microsoft, LinkedIn co-founder and former OpenAI board member Reid Hoffman, and former OpenAI board member and Microsoft VP Dee Templeton of various illicit activities and seeks to halt them. The allegations include: Attorneys for Musk assert that "irreparable harm" will ensue if the injunction isn't granted. "Plaintiffs and the public need a pause," they wrote in the filing. "An injunction to preserve what is left of OpenAI's nonprofit character, free from self-dealing, is the only appropriate remedy. If not, the OpenAI promised to Musk and the public will be long gone by the time the court reaches the merits." Musk's lawsuit against OpenAI, which at its core accuses the company of abandoning its original nonprofit mission, was withdrawn in July, only to be revived late this summer. In an amended complaint in November, the suit named new defendants including Microsoft, Hoffman, and Templeton, and two new plaintiffs: Shivon Zilis, a Neuralink exec and ex-OpenAI board member, and xAI. Musk has argued in previous suits that he's been defrauded out of more than $44 million he says he donated to OpenAI by preying on his "well-known concerns about the existential harms" of AI. Musk, one of OpenAI's co-founders, left the company in 2018 over disagreements about its direction. In the motion for an injunction, Musk's attorneys allege OpenAI is depriving xAI of capital by extracting promises from investors not to fund it and the competition. In October, the Financial Times reported that OpenAI demanded investors in its latest funding round abstain from also funding any of OpenAI's rivals, including xAI. "Musk has verified that at least one major investor in OpenAI's October funding round has subsequently declined to invest in xAI," counsel for Musk wrote. Of course, xAI has had no trouble raising money lately. Reportedly, the startup closed a $5 billion round this month with participation from prominent investors including Andreessen Horowitz and Fidelity. With around $11 billion in the bank, xAI is one of the best-funded AI companies in the world. Musk's motion for an injunction also alleges that Microsoft and OpenAI continue to illegally share proprietary information and resources, and that several of the defendants, including Altman, are engaging in self-dealing that harms marketplace competition. For example, the filing notes, OpenAI selected Stripe, a payment platform in which Altman has "material financial interests," as OpenAI's payment processor. (Altman is said to have made billions from his Stripe holdings.) Microsoft, which first invested in OpenAI in 2019, ramped up the partnership last year, investing $13 billion in exchange for what's effectively a 49% stake in OpenAI's earnings. OpenAI also makes extensive use of Microsoft's cloud hardware resources, using them to train, fine-tune, and run AI models like those that power ChatGPT. Hoffman's position on the boards of both Microsoft and OpenAI while also a partner at investment firm Greylock gave Hoffman a privileged view into the companies' dealings, Musk's attorneys argue. (Hoffman stepped down from OpenAI's board in 2023.) As for Templeton, whom Microsoft briefly appointed as a nonvoting board observer at OpenAI, Musk's counsel argues that she was in a position to facilitate agreements between Microsoft and OpenAI that would violate antitrust rules. "Maintaining OpenAI's charitable status pending final resolution and halting further self-dealing transactions by Altman protect both the organization's founding mission and the public interest in proper administration of charities," Musk's attorneys wrote. Counsel for Musk wrote that if an injunction isn't granted, OpenAI might "lack sufficient funds" to pay damages were the court to eventually rule in Musk's favor. (OpenAI is reportedly spending more than $5 billion and isn't close to breaking even.) Moreover, they say, were a judge to disallow OpenAI's nonprofit transition, it'd be "virtually impossible" to "unwind" the company's transactions without "widespread investor loss" should OpenAI continue to accept new investments. "No objective observer can look at OpenAI today and say it bears any resemblance whatsoever to what it promised to be," attorneys for Musk wrote. "Plaintiffs respectfully request that the court maintain the status quo and pause defendants' worsening behavior until final disposition." OpenAI did not immediately respond to TechCrunch's request for comment. The company has sought to dismiss Musk's lawsuit, calling it "blusterous" and baseless.

Elon Musk asks court to block OpenAI from converting to a for-profit

Attorneys representing Musk, his AI startup xAI, and former OpenAI board member Shivon Zilis filed for a preliminary injunction against OpenAI on Friday. The injunction would also stop OpenAI from allegedly requiring its investors to refrain from funding competitors, including xAI and others. The latest court filings represent an escalation in the legal feud between Musk, OpenAI and its CEO Sam Altman, as well as other long-involved parties and backers including tech investor Reid Hoffman and Microsoft. Musk had originally sued OpenAI in March 2024 in a San Francisco state court, before withdrawing that complaint and refiling several months later in federal court. Attorneys for Musk in the federal suit, led by Marc Toberoff in Los Angeles, argued in their complaint that OpenAI has violated federal racketeering, or RICO, laws. In mid-November, they expanded their complaint to include allegations that Microsoft and OpenAI had violated antitrust laws when the Chat GPT-maker allegedly asked investors to agree to not invest in rival companies, including Musk's newest startup, xAI. Microsoft declined to comment. In their motion for preliminary injunction, attorneys for Musk argue that OpenAI should be prohibited from "benefitting from wrongfully obtained competitively sensitive information or coordination via the Microsoft-OpenAI board interlocks." "Elon's fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit," an OpenAI spokesperson said in a statement. OpenAI has emerged as one of the biggest startups in recent years, with ChatGPT becoming a major hit that has helped usher massive corporate enthusiasm over AI and related large language models. Since Musk announced xAI's debut in July 2023, his newer AI business has released its Grok chatbot and is raising up to $6 billion at a $50 billion valuation, in part to buy 100,000 Nvidia chips, CNBC reported earlier this month. "Microsoft and OpenAI now seek to cement this dominance by cutting off competitors' access to investment capital (a group boycott), while continuing to benefit from years' worth of shared competitively sensitive information during generative AI's formative years," the lawyers wrote in the filing. The attorneys wrote that the terms OpenAI asked investors to agree to amounted to a "group boycott" that "blocks xAI's access to essential investment capital." The lawyers later added that OpenAI "cannot lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interests of Microsoft." In July, Microsoft gave up its observer seat on OpenAI's board, although CNBC reported that the Federal Trade Commission would continue to monitor the influence of two companies over the AI industry. FTC Chair Linda Khan announced at the beginning of the year that the federal agency would initiate a "market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers." Some of the companies that the FTC mentioned as part of the study included OpenAI, Amazon, Alphabet, Microsoft and Anthropic. In the filing, attorneys for Musk also argue that OpenAI should be prohibited from "benefitting from wrongfully obtained competitively sensitive information or coordination via the Microsoft-OpenAI board interlocks." OpenAI originally debuted in 2015 as a non-profit and then in 2019, converted into a so-called capped-profit model, in which the OpenAI non-profit was the governing entity for its for-profit subsidiary. It's in the process of being converted into a fully for-profit public benefit corporation that could make it more attractive to investors. The restructuring plan would also allow OpenAI to retain its non-profit status as a separate entity, CNBC previously reported. Microsoft has invested nearly $14 billion in OpenAI but revealed in October as part of its fiscal first-quarter earnings report that it would record a $1.5 billion loss in the current period largely due to an expected loss from OpenAI. In October, OpenAI closed a major funding round that valued the startup at $157 billion. Thrive Capital led the financing while investors, including Microsoft and Nvidia, also participated. OpenAI has faced increasing competition from startups such as xAI, Anthropic and tech giants such as Google. The generative AI market is predicted to top $1 trillion in revenue within a decade, and business spending on generative AI surged 500% this year, according to recent data from Menlo Ventures. CNBC reached out to attorneys for Musk on Saturday. They did not respond to requests for comment.

Elon Musk launches legal war against OpenAI

Elon Musk is pursuing legal action to prevent OpenAI from fully transitioning into a for-profit entity. Musk, alongside his AI startup xAI and former OpenAI board member Shivon Zilis, filed for a preliminary injunction in federal court on November 29, 2024. The motion aims to halt OpenAI's restructuring plans, alleging that the organization is engaging in anti-competitive practices including pressuring investors not to support rival firms. Musk's legal team argues that OpenAI, which has received substantial backing from Microsoft, is attempting to monopolize the generative AI market by imposing conditions on its investors. This includes restrictions that would allegedly prevent them from funding competing startups like Musk's xAI. His initial lawsuit, filed in March 2024 in San Francisco, claimed breach of contract and was later withdrawn. Musk subsequently refiled complaints in August 2024 in federal court, further clarifying his intent to challenge OpenAI's operations. The filing manifests a deeper contention between Musk, OpenAI, and its CEO Sam Altman, with mentions of other significant stakeholders such as investor Reid Hoffman and Microsoft. Musk's attorneys assert that OpenAI's actions violate federal racketeering and antitrust laws, accusing the company of essentially benefiting from "wrongfully obtained competitively sensitive information" due to its ties with Microsoft. The legal team contends that this strategy constitutes a "group boycott" aimed at denying xAI access to crucial investment capital. An OpenAI spokesperson dismissed Musk's latest claims, insisting that they are unfounded. "Elon's fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit," they stated. OpenAI was originally established as a non-profit in 2015 before shifting to a capped-profit model in 2019, which allowed its governing non-profit entity to manage for-profit ventures. However, the company is now moving toward becoming a fully for-profit public benefit corporation. Musk is once again after OpenAI Microsoft has invested nearly $14 billion into OpenAI, although it has faced financial setbacks related to its investment strategy, such as recording a $1.5 billion loss associated with OpenAI in its recent earnings report. OpenAI's efforts to expand and remain competitive in the evolving AI landscape have included a substantial funding round that valued the company at $157 billion before the alleged manipulation of investor relations came to light. As scrutiny intensifies, investigations are ongoing into the nature of the partnerships and investments forming within the AI sector, specifically those involving major players like OpenAI, Microsoft, and others. The Federal Trade Commission announced plans to monitor the relationships influencing the industry, reflecting the increasing importance of regulatory oversight amid significant corporate activity in generative AI.

Elon Musk Urges Court to Block 'Illegal' OpenAI For-Profit Conversion

Musk's lawyers wrote, saying OpenAI must play by the same rules Elon Musk asked a federal court to block OpenAI from pursuing an "illegal" conversion to a for-profit business, saying that a pause on the ChatGPT maker's accelerating dominance is urgently needed to protect his own Artificial Intelligence (AI) startup as well as the public. In his latest court filing, Musk continued his months-long attack on Sam Altman, nine years after they worked together to launch OpenAI as a nonprofit with a stated mission to develop generative artificial intelligence for the benefit of society. Musk repeated his earlier claims that OpenAI broke its promises to him and abandoned its founding purpose as a charity when it accepted billions of dollars in backing from Microsoft starting in 2019. He now says that without quick court intervention, it will soon be too late to stop Altman's "behemoth" from crushing its rivals. A spokesperson for OpenAI said Musk's filing "again recycles the same baseless complaints" and "continues to be utterly without merit." Altman's company is in early talks with the California attorney general's office over the process to change its corporate structure, Bloomberg News reported last month. Musk first sued OpenAI in California state court in February, dropped the case in June and filed a complaint in federal court in Oakland, California, in August. The injunction he now seeks would put OpenAI's restructuring on hold while the legal fight plays out. He's also asking the judge to prohibit OpenAI from entering into agreements with investors to "fund no competitors" that he says violate federal antitrust laws. "Whatever leeway OpenAI might have been due under antitrust law as a purported charity it chose to forego when it subordinated itself to Microsoft for profit," Musk's lawyers wrote, saying OpenAI must play by the same rules as everyone else. "It cannot lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interests of Microsoft and Altman at any given moment." Musk's artificial intelligence startup xAI launched last year and was valued at $50 billion in a recent funding round. It has more than doubled in value since May. The case is Musk v. Altman, 4:24-cv-04722, US District Court, Northern District of California (Oakland). © 2024 Bloomberg LP

Musk seeks for-profit injunction against OpenAI

Politics, electric cars, rockets, and social media not enough to keep some individuals busy Elon Musk has filed for an injunction against OpenAI co-founder and CEO Sam Altman, broadly designed to prevent the GenAI poster child from shifting towards an entirely for-profit business. The businessman and political advisor has been pursuing a legal battle against the ChatGPT maker, linked to Microsoft by a $13 billion investment pipeline. Last month, Musk added Microsoft to the list of defendants in his long-running legal dispute with OpenAI, claiming among other things that it had moved away from its original non-profit and open technology mission. OpenAI told us at the time: "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." The new legal filing [PDF] asks for an injunction to prevent OpenAI and a number of other linked parties from activities such as investing in OpenAI's competitors, obtaining sensitive information about the relationship between the Microsoft and OpenAI board, "furthering the conversion of OpenAI to a for-profit enterprise," and allowing OpenAI to do business with entities in which any of the defendants have a financial interest. Those targeted in the injunction include Musk, Shivon Zilis - a former OpenAI board member and close Musk associate - and Musk's AI startup, xAI. The action targets OpenAI as well as co-founders Altman and Gregory Brockman, the company's president. Microsoft is also named among the long list of associated targets. Before bringing LLMs to the mainstream, OpenAI was founded as a non-profit organization in 2015. The company later moved to become what it describes as a "partnership" between its original non-profit and a "capped profit arm." In September, a company spokesperson told The Register: "The non-profit is core to our mission and will continue to exist." Musk's latest injunction claim is set to be heard in early January next year at the United States District Court, Northern District of California. ®

Elon Musk asks court to block OpenAI conversion from nonprofit to for-profit

Elon Musk on Friday filed a motion for preliminary injunction asking a federal court to block OpenAI's planned conversion from a nonprofit to for-profit entity. The motion in US District Court for the Northern District of California is the latest major filing in a lawsuit Musk initiated against OpenAI and its CEO Sam Altman in August. "There can be no serious question that OpenAI's imminent conversion to a for-profit entity violates the terms of Musk's donations," the motion said, referring to $44 million that Musk says he contributed to OpenAI from 2016 to 2020. Musk's motion makes it clear he is worried that a for-profit OpenAI would spell trouble for his own company, xAI. Musk alleged on Friday that OpenAI and its partner, Microsoft, are "together exploiting Musk's donations so they can build a for-profit monopoly, one now specifically targeting xAI," and that "OpenAI's path from a non-profit to for-profit behemoth is replete with per se anticompetitive practices, flagrant breaches of its charitable mission, and rampant self-dealing." The Musk complaint filed in August objected to the OpenAI structure consisting of a nonprofit and several for-profit affiliates that allegedly "drained the non-profit of its valuable technology and personnel." The lawsuit said Musk agreed to fund OpenAI based on "express promises, representations, and reassurances that the venture would be a non-profit devoted to the open-source development of AI for the benefit of humanity." Musk's new motion alleged that Microsoft and OpenAI "have transformed OpenAI into everything Altman promised Musk it would never be -- a closed-source, for-profit monopoly, that rushes unsafe AI products to market for private commercial gain." OpenAI previously denied Musk's claims, saying that Musk in 2017 supported the creation of a for-profit entity and that Musk wanted to be the CEO of that for-profit entity. OpenAI also said that "Elon understood the mission did not imply open-sourcing AGI [artificial general intelligence]."

Elon Musk asks US court again to block OpenAI's for-profit conversion

Elon Musk has again asked a US court to stop ChatGPT-maker OpenAI from converting into a for-profit enterprise, CNBC reported Saturday. Attorneys representing the billionaire and his AI startup, xAI, filed the injunction Friday, the financial news site reported. The injunction also requests that OpenAI be stopped from allegedly barring its investors from funding competing companies. The move is the latest development in a business feud between OpenAI and Musk, who co-founded the group in 2015 but has since left. OpenAI has seen its profile skyrocket over recent years as it has become a star player in the growing field of artificial intelligence. Musk has alleged that OpenAI bars its investors from making investments in rivals -- which would put his own startup at a disadvantage in a sector where billions of dollars are at stake. OpenAI was founded as a non-profit and has since switched to a "capped" for-profit enterprise. It is currently seeking to become a for-profit public benefit corporation, which could attract more investment. After leaving in 2018, Musk said he was uncomfortable with the profit-driven direction the company was taking under the stewardship of CEO Sam Altman. He filed a lawsuit against the company in March, accusing it of breaking its original non-profit mission to make AI research available to all. OpenAI argues that Musk's lawsuit, as well as his embrace of open source development for AI, is little more than a case of sour grapes after leaving the company.

Elon Musk's new legal strike targets OpenAI's shift to profit

Musk's legal team filed for a preliminary injunction in federal court, aiming to halt this transformation. They also accused OpenAI of requiring investors to avoid funding competitors, including xAI, as part of alleged anti-competitive practices. This injunction marks a new chapter in an ongoing legal feud involving Musk, OpenAI CEO Sam Altman, Microsoft, and other prominent stakeholders like Reid Hoffman. Musk originally filed a lawsuit against OpenAI in March 2024 in a San Francisco state court but later transitioned the case to federal court. In their expanded complaint filed in November, Musk's attorneys alleged violations of antitrust laws and federal racketeering (RICO) statutes. Central to the argument is OpenAI's alleged practice of demanding exclusivity from investors, which they claim unfairly limits funding opportunities for competitors. Musk's legal team has accused OpenAI and Microsoft of engaging in practices that unfairly consolidate their dominance in the burgeoning AI market. They argue that the collaboration between the two companies resulted in a "group boycott" against competitors like xAI.

Elon Musk asks court to block OpenAI's for-profit conversion By Investing.com

Investing.com-- Elon Musk filed an injunction asking a federal court to stop OpenAI from converting into a for-profit business, while also raising antitrust concerns over the start-up, filings showed over the weekend. Attorneys representing Musk and his AI startup xAI filed a preliminary injunction aimed at blocking OpenAI's conversion, and also preventing the start-up from allegedly blocking its investors from investing in its competitors. The injunction marks a potential escalation in Musk's legal feud with OpenAI, after he filed multiple suits against the company over its alleged dropping of its non-profit mission. The Tesla (NASDAQ:TSLA) CEO has also argued he was defrauded out of the $44 million he donated to OpenAI. Musk is one of the company's co-founders, but left in 2018 on disagreements over its intentions. Recent reports suggested that OpenAI is seeking to convert part of its business into a for-profit model, enabling it to further reap the benefits of its wildly popular ChatGPT AI model. OpenAI recently clinched a $1.5 billion investment from Japan's Softbank (OTC:SFTBY) through a tender offer for shares held by OpenAI employees. But media reports suggested that OpenAI was also discouraging its investors from investing in its competitors. Microsoft Corporation (NASDAQ:MSFT) is one of the biggest investors in OpenAI, while other tech majors, including AI darling NVIDIA Corporation (NASDAQ:NVDA), had also participated in recent funding rounds.

Elon Musk against OpenAI: asks the judge to stop its big change and its future could waver - Softonic

Elon Musk doesn't want to let Sam Altman get away with it: OpenAI will never be a for-profit company Since Elon Musk left the OpenAI project, where he was not only one of the first people involved but also one of its biggest investors in the early years. At that time, Elon Musk trusted in the human and good work of AI and OpenAI. For the past year, it's been all lawsuits and complaints for those who were his colleagues and partners. The lawyers of tech billionaire Elon Musk have requested a preliminary injunction against OpenAI, several of its co-founders, and its investor and close collaborator, Microsoft, to prevent OpenAI and other named defendants from engaging in what Musk's lawyer claims is anticompetitive behavior. The request for a precautionary measure, 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, LinkedIn co-founder and former OpenAI board member Reid Hoffman, and former OpenAI board member and Microsoft vice president Dee Templeton of various illicit activities, and seeks to stop them. The accusations included in the lawsuit, as we have read, are: Musk's lawyers claim that "irreparable harm" will occur if the injunction is not granted. "The plaintiffs and the public need a pause," they wrote in the filing. "A court order to preserve what remains of OpenAI's non-profit character, free from self-dealing, is the only appropriate remedy." Otherwise, the OpenAI promised to Musk and the public will have disappeared by the time the court gets to the bottom of the matter. The motion is the latest salvo in Musk's legal battle against OpenAI, which fundamentally accuses the company of abandoning its original non-profit mission to make the fruits of its AI research available to everyone. Musk withdrew the lawsuit in July, but revived it later this summer. Earlier this month, an amended lawsuit included new defendants, including Microsoft, Hoffman, and Templeton, and two new plaintiffs: Shivon Zilis, a Neuralink executive and former OpenAI board member, and xAI. Musk has claimed in previous lawsuits that he has been defrauded of more than 44 million dollars that he says he donated to OpenAI taking advantage of his "well-known concern for existential damages" of AI. Musk, one of the co-founders of OpenAI, left the company in 2018 due to disagreements about its direction. OpenAI was launched in 2015 as a non-profit organization and, in 2019, it became a capped-profit where the non-profit organization became the governing entity of a for-profit subsidiary. The company is in the process of becoming a fully for-profit corporation, which reportedly would allow OpenAI to maintain its non-profit status as a separate entity. Elon Musk created his response to OpenAI, xAI, last year. Shortly after, the company launched Grok, an artificial intelligence model that now powers a series of features on Musk's social network, X (formerly known as Twitter). xAI also offers an API that allows customers to integrate Grok into third-party applications, platforms, and services. In the request for a precautionary measure, Musk's lawyers argue that OpenAI is depriving xAI of capital by obtaining promises from investors not to finance it or its competitors. In October, the Financial Times reported that OpenAI demanded investors in its latest funding round to also refrain from financing any of OpenAI's rivals, including xAI. Musk's petition also alleges that Microsoft and OpenAI continue to illegally share proprietary information and resources, and that several of the defendants, including Altman, are conducting business on their own that harms competition in the market. In a statement sent by email, a spokesperson for OpenAI said: "Elon's fourth attempt, which once again recycles the same unfounded complaints, remains completely without merit." The company had already tried to dismiss Musk's lawsuit, calling it "bluster" and unfounded. We'll see how all this ends now that Elon Musk is Donald Trump's right-hand man.

Musk again asks to block OpenAI's 'illegal' conversion to for-profit model

Billionaire Elon Musk has filed another motion to block ChatGPT-creator firm OpenAI from converting to a for-profit enterprise while also alleging it has been engaging in anti-competitive practices. Musk accused OpenAI, its CEO Sam Altman, President Greg Brockman and stakeholder Microsoft of violating terms of Musk's "foundational contributions to the charity," according to the motion for a preliminary injunction filed on Nov. 30. Musk co-founded OpenAI in 2015 and was an early board member until he left the company in 2018. He has since launched xAI -- the firm behind AI chatbot Grok -- which he said is falling victim to OpenAI's anti-competitive practices. "OpenAI's path from a non-profit to for-profit behemoth is replete with per se anticompetitive practices, flagrant breaches of its charitable mission, and rampant self-dealing," Musk's lawyers wrote. Through a "series of exclusive arrangements" with Microsoft, the two companies have engaged in "predatory practices" -- enabling them to seize control of nearly 70% of the generative AI market, lawyers for Musk said: "Microsoft and OpenAI now seek to cement this dominance by cutting off competitors' access to investment capital, while continuing to benefit from years' worth of shared competitively sensitive information during generative AI's formative years." Allowing this conduct to continue will hurt xAI and members of the public, many of which have become increasingly concerned about "rushed" and "unsafe" AI products, they added. "OpenAI's illegal deviation from that mission betrays not just Musk, but us all." California laws allow a nonprofit to convert to a "for-profit stock corporation" but not limited liability companies. OpenAI notes it remains nonprofit at its core but established a for-profit subsidiary capable of issuing equity to raise capital and hiring world-class talent. However, those tasks are to be administered at the direction of the nonprofit. Related: Trump taps Elon Musk and Vivek Ramaswamy to slash gov't with 'DOGE' An injunction to preserve what is left of OpenAI's nonprofit character is the only "appropriate remedy," Musk's lawyers said. "No objective observer can look at OpenAI today and say it bears any resemblance whatsoever to what it promised to be. Enough is enough." An OpenAI spokesperson slammed Musk's latest attempt in a note to Cointelegraph: "Elon's fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit." In March, OpenAI leaked emails from Musk in 2015 showing support for the firm to find over $1 billion in funding to compete with the likes of Google and Facebook (now Meta). OpenAI previously said Musk was harassing the firm in a related October filing. "Since launching a competing artificial intelligence company, xAI, Musk has been trying to leverage the judicial system for an edge. The effort should fail; Musk's complaint does not state a claim and should be dismissed," OpenAI added. In June, Musk threatened to ban Apple devices at his companies when Apple touted integrating OpenAI's ChatGPT into its iPhone, iPad and Mac operating systems. Months later, Apple launched Apple Intelligence on Oct. 28.

Elon Musk asks US court to block OpenAI's for-profit conversion

WASHINGTON (AFP) - Elon Musk has again asked a United States (US) court to stop ChatGPT-maker OpenAI from converting into a for-profit enterprise, CNBC reported on Saturday. Attorneys representing the billionaire and his AI startup, xAI, filed the injunction on Friday, the financial news site reported. The injunction also requests that OpenAI be stopped from allegedly barring its investors from funding competing companies. The move is the latest development in a business feud between OpenAI and Musk, who co-founded the group in 2015 but has since left. OpenAI has seen its profile skyrocket over recent years as it has become a star player in the growing field of artificial intelligence. Musk has alleged that OpenAI bars its investors from making investments in rivals - which would put his own startup at a disadvantage in a sector where billions of dollars are at stake. OpenAI was founded as a non-profit and has since switched to a "capped" for-profit enterprise. It is currently seeking to become a for-profit public benefit corporation, which could attract more investment. After leaving in 2018, Musk said he was uncomfortable with the profit-driven direction the company was taking under the stewardship of CEO Sam Altman. He filed a lawsuit against the company in March, accusing it of breaking its original non-profit mission to make AI research available to all. OpenAI argues that Musk's lawsuit, as well as his embrace of open source development for AI, is little more than a case of sour grapes after leaving the company.

Elon Musk Continues To Intensify His Legal Battle With OpenAI, Now Seeking A Preliminary Injunction Against The Company

Regulations authorities have pursued companies aggressively this year by either requiring them to change their policies in order for healthy competition to prevail or levying heavy taxes for violation. Google has been under hot waters for its dominance in the digital advertisement space and also in the search engine market. Now, Elon Musk is said to be legally pursuing OpenAI for its attempt to transition into a completely profit-based structure and claims that the company is engaging in anti-competitive practices. OpenAI has grown extensively and is known for revolutionizing AI and redefining the technology's potential. The company started as a non-profit organization with the goal of bringing betterment to society by advancing AI technology, but with its massive growth, it is now transitioning fully into a profit entity, stirring online debate and discussions over conflicting principles. Building on this, OpenAI filed a lawsuit against the company for its shifting structure that discourages healthy competition from prevailing. Now, according to TechCrunch, the pursuit has escalated by Musk's legal team requesting a preliminary injunction in an attempt to put a halt to OpenAI's transition to a for-profit organization. It is said that they even requested the judge to stop the company from pursuing practices that are in violation of the US antitrust laws till the case does not reach a conclusion. In the claims put forward by Musk's lawyers, CEO Sam Altman has engaged in self-dealing that has led to prioritizing personal interests over the organization and letting go of the bigger picture. Due to this conduct and structural shift, the company is said to potentially incur some financial risks. It has been expressed that if Musk does win the legal battle, OpenAI might struggle to pay for damages due to its ongoing transition. Reports are also coming in about OpenAI contacting regulators about its for-profit business model to help with possible legal or regulatory challenges. Elon Musk's antitrust claims are against not just OpenAI but Microsoft as well for engaging in anti-competitive behavior by telling investors not to fund their competition, which is in violation of the Sherman Act. Another allegation on the companies is non-compliance with the Clayton Act by obtaining sensitive information wrongfully. OpenAI spokesperson has said to have responded to the ongoing legal pursuit through email and called the case baseless and lacking merit.

Musk Asks for Injunction to Block OpenAI For-Profit Move

Elon Musk asked a court to stop OpenAI from converting to a for profit enterprise and engaging in other behavior that could hurt its rivals, including Musk's own artificial intelligence startup, xAI. In a filing late Friday, Musk said that the court should halt the for-profit conversion because it violated the terms of Musk's funding of OpenAI. Unwinding OpenAI after such a conversion would

Musk Urges Court to Block OpenAI 'Illegal' For-Profit Conversion

Elon Musk asked a federal court to block OpenAI from pursuing an "illegal" conversion to a for-profit business, saying that a pause on the ChatGPT maker's accelerating dominance is urgently needed to protect his own artificial intelligence startup as well as the public. In his latest court filing, Musk continued his months-long attack on Sam Altman, nine years after they worked together to launch OpenAI as a nonprofit with a stated mission to develop generative artificial intelligence for the benefit of society.

Just In: Elon Musk Files Lawsuit Against OpenAI and Microsoft Over Antitrust Claims

Elon Musk has filed for a preliminary injunction against OpenAI and its key partners, including Microsoft, over what his legal team describes as anti-competitive behavior. The lawsuit, lodged late last Friday in the U.S. District Court for the Northern District of California, targets OpenAI, CEO Sam Altman, President Greg Brockman, Microsoft, and several influential individuals tied to the companies. The Tesla CEO's attorneys argue that OpenAI has deviated from its original nonprofit mission and is engaging in practices that harm competition in the AI industry. Elon Musk's legal team asserts that OpenAI and Microsoft are conspiring to restrict market competition by discouraging investment in rival AI companies, particularly Musk's own venture, xAI. The lawsuit claims that OpenAI pressured investors to refrain from backing competitors, including xAI, which recently raised significant funding. Elon Musk's attorneys point to reports that OpenAI required investors in its latest funding round to abstain from supporting rival AI projects, effectively limiting the financial opportunities for companies like xAI.

Elon Musk Attempts to Block OpenAI's For-Profit Transition

Elon Musk has initiated legal action to challenge OpenAI's transition from a nonprofit organization to a for-profit entity, asserting that this shift undermines its original mission to advance artificial intelligence (AI) for the public good. The lawsuit accuses OpenAI, its leadership, and Microsoft of prioritizing profit over ethics, engaging in anti-competitive practices, and deviating from the organization's founding principles. This legal battle highlights critical issues such as AI governance, ethical development, and market dominance, raising questions about the future trajectory of AI innovation. For anyone who has ever placed their trust in a cause or organization only to see it veer off course, this situation might feel all too familiar. Beyond the personal stakes, the case raises broader questions about ethics, power, and the direction of AI development. At its core, this controversy is not just about Musk or OpenAI -- it explores what happens when innovation collides with profit motives. Can an organization balance the pursuit of new technology with a commitment to the public good, or does financial gain inevitably take precedence? Musk's allegations, which include claims of anti-competitive practices and conflicts of interest, cast a spotlight on the broader implications of OpenAI's evolution. As we dive into this unfolding legal and ethical drama, we'll explore what's at stake -- not just for the parties involved, but for the future of AI and its role in shaping our world. OpenAI was founded in 2015 with a clear mission: to ensure that AI technologies benefit humanity as a whole. As a nonprofit, it emphasized transparency, independence from profit-driven motives, and a commitment to open-source development. The organization was structured to prioritize public benefit, with a unique "capped returns" model for investors. This approach aimed to align financial incentives with ethical goals, fostering trust and collaboration within the AI community. OpenAI's early vision was rooted in the belief that AI should be developed responsibly, with safeguards to prevent misuse and ensure equitable access. In 2019, OpenAI announced a significant shift to a "capped-profit" model, citing the need for substantial funding to advance its ambitious AI research goals. Since then, the organization has raised an impressive $6.6 billion in investments. However, reports indicate that some investors are advocating for the removal of profit caps, further distancing OpenAI from its nonprofit origins. Under this evolving structure, the nonprofit arm of OpenAI would have reduced control over its for-profit entities, raising concerns about accountability and the potential for mission drift. Critics argue that this transition risks prioritizing financial returns over the ethical principles that initially defined OpenAI's mission. Musk's lawsuit outlines several allegations against OpenAI and its leadership. He claims that the organization has exploited his early contributions and credibility to further its financial interests. Musk also accuses OpenAI of engaging in anti-competitive practices, such as discouraging investments in rival AI companies, including his own venture, xAI. Additionally, he alleges that Microsoft, a key partner of OpenAI, has used its influence to dominate the generative AI market. The lawsuit also highlights potential self-dealing by OpenAI leadership, including contracts that allegedly benefit companies tied to CEO Sam Altman. These allegations raise serious questions about the ethical and competitive practices within the organization. Microsoft has emerged as a central figure in OpenAI's operations, holding exclusive licensing agreements and maintaining board representation. Musk alleges that Microsoft has used this partnership to secure a dominant 70% share of the generative AI market. If these claims are accurate, such practices could stifle competition, limit consumer choice, and hinder innovation in the AI sector. The allegations underscore the potential risks of market consolidation in a rapidly evolving industry, where a few dominant players could wield disproportionate influence over the development and deployment of AI technologies. Here is a selection of other guides from our extensive library of content you may find of interest on Artificial Intelligence (AI). The lawsuit also brings attention to OpenAI's governance structure. Musk claims that the organization's board lacks independence and is plagued by conflicts of interest. For example, he alleges that CEO Sam Altman has financial ties to companies that benefit from OpenAI contracts. Furthermore, the departure of key researchers, such as Ilya Sutskever, has reportedly been linked to concerns about safety and the organization's deviation from its founding mission. These governance issues highlight broader concerns about accountability and ethical decision-making in AI development, particularly as the industry grapples with the challenges of creating advanced general intelligence (AGI). The case raises significant ethical and philosophical questions about the commercialization of AI. Critics argue that prioritizing profit over public benefit could compromise the safety and ethical considerations necessary for responsible AI advancements. This is especially concerning in the context of AGI, which poses substantial risks if not carefully managed. Additionally, monopolistic practices could limit access to AI technologies, stifle competition, and concentrate power in the hands of a few dominant players. The lawsuit serves as a reminder of the delicate balance between innovation, ethical responsibility, and public accountability in the rapidly evolving AI landscape. Musk contends that OpenAI's shift to a for-profit model violates the commitments it made to donors and the public at its inception. He argues that this transition undermines the organization's credibility and ethical standing. On the other hand, OpenAI's leadership defends the move, asserting that substantial funding is essential to achieve its ambitious goals in an increasingly competitive AI landscape. This debate highlights the tension between financial sustainability and ethical responsibility, a challenge that is becoming more pronounced as AI technologies advance and their societal impact grows. The lawsuit has sparked widespread calls for greater regulatory scrutiny of OpenAI and Microsoft's market practices. Policymakers and industry leaders are now grappling with how to balance innovation with ethical considerations in AI development. The case also raises concerns about the long-term implications of AGI development under a profit-driven model, particularly regarding safety and public accountability. The resolution of this legal battle could set critical precedents for AI governance, influencing how organizations navigate the complex interplay of ethics, profit, and innovation. As the AI industry continues to expand, the outcome of this case may shape its trajectory for years to come.