Elon Musk vs. OpenAI: Legal Battle Over A Giant For-Profit Shift Heats Up: The United States tech billionaire Elon Musk has filed a motion in a federal court in California to stop artificial intelligence giant OpenAI from converting to a for-profit business.
The injunction will stop OpenAI from allegedly asking its investors to refrain from funding companies they perceive as close competitors. The latest court filing is the legal battle between Musk, OpenAI, and other involved parties, including Microsoft.
Musk co-founded OpenAI but left in 2018. He argues that the company’s CEO, Sam Altman, and President, Greg Brockman, violated their agreement to keep OpenAI’s status as a nonprofit. Musk also contends he was a ripoff of more than $44 million in donations.
However, OpenAI has provided a different narrative: “As we discussed a for-profit structure to further the mission, Elon wanted us to merge with Tesla, or he wished to control it.” Elon left OpenAI, saying there needed to be a relevant competitor to Google DeepMind and that he was moving to do it himself.
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He said he’d be supportive of us finding our path. We’re sad that it’s come to this with someone we’ve deeply admired, someone who inspired us to aim higher, then told us we would fail, started a competitor, and then sued us when we tried making meaningful progress towards OpenAI’s mission without him.”
The Tesla CEO sued OpenAI in San Francisco State Court back in March. However, he withdrew the lawsuit and later filed a much more powerful lawsuit in federal court in August. The lawsuit targeted OpenAI, Altman, and Brockman, arguing that the company violated federal racketeering laws.
Elon Musk vs. OpenAI: Legal Battle Over A Giant For-Profit Shift Heats Up: Musk expanded the complaint last month to include OpenAI’s investor and several other board members. It alleged that OpenAI and Microsoft violated antitrust laws when the ChatGPT maker asked investors not to fund rival firms, including Musk’s X.AI.
“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,” Musk’s legal team argued.
OpenAI dismissed all of Musk’s allegations, calling them baseless: “Elon’s fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit.”
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Note: OpenAI has emerged as one of the most successful startups in recent years, with ChatGPT helping usher in corporate enthusiasm over artificial intelligence.
The AI giant debuted in 2015 as a total nonprofit entity and, in 2019, converted into a capped-profit model. OpenAI is now valued at $157 billion and aims to become a for-profit public benefit corporation to attract more investors.
