Elon Musk has filed a petition in federal court for a preliminary injunction to prevent OpenAI from becoming a fully commercial enterprise.
CNBC report In the latest development in the ongoing legal battle between Elon Musk and OpenAI, lawyers representing Musk, his AI startup xAI, and former OpenAI board member Sivon Gillis have filed a lawsuit against the AI giant. announced that it has applied for a preliminary injunction. The injunction is said to be aimed at preventing OpenAI from turning into a fully commercial enterprise and asking investors to refrain from funding competitors, including Musk's xAI.
The latest court filing further escalates a legal battle between Musk and OpenAI, its CEO Sam Altman, tech investor Reid Hoffman, Microsoft and other long-standing players. did. Musk originally sued OpenAI in San Francisco state court in March 2024, but withdrew the complaint several months later and refiled it in federal court. The federal lawsuit, led by Los Angeles attorney Mark Toberoff, alleges that OpenAI violates the federal Racketeering Act (RICO).
In mid-November, the complaint was expanded to allege that Microsoft and OpenAI violated antitrust laws by asking investors to agree not to invest in rival companies, including Musk's xAI. was also included. The motion for a preliminary injunction argues that OpenAI should be prohibited from “benefiting from fraudulently obtained competitively sensitive information or coordination through the interlocking relationship between Microsoft and OpenAI's boards of directors.” are.
OpenAI has emerged as one of the most prominent startups in recent years, with the huge success of its AI chatbot ChatGPT and driving huge corporate enthusiasm for AI and related large-scale language models. Meanwhile, Musk's xAI, which debuted in July 2023, has released a Grok chatbot and is raising up to $6 billion at a $50 billion valuation to buy 100,000 Nvidia chips.
Musk's lawyers argue that the conditions OpenAI asked investors to agree to amount to a “collective boycott” that “prevents xAI from accessing significant investment funds.” They go on to say that OpenAI “cannot roam the market like Frankenstein, piecing together corporate structures that serve Microsoft's financial interests.”
Microsoft relinquished its observer seat on the OpenAI board in July, but the FTC continues to monitor the companies' influence over the AI industry. Earlier this year, FTC Chair Linda Kahn announced that the FTC would launch a market investigation into investments and partnerships formed between AI developers and major cloud service providers such as OpenAI, Amazon, Alphabet, Microsoft, and Anthropic. Then he announced.
OpenAI debuted as a nonprofit organization in 2015, converted to a limited-profit model in 2019, and is currently in the process of becoming a fully for-profit public benefit corporation. The restructuring plan could make the company more attractive to investors while maintaining its nonprofit status as an independent entity.
Microsoft, which has invested nearly $14 billion in OpenAI, revealed in October that it expects to post a $1.5 billion loss this fiscal year, largely due to expected losses from the AI company. OpenAI closed a major funding round in October, valuing the startup at $157 billion, with investors including Thrive Capital, Microsoft, and Nvidia.
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Lucas Nolan is a reporter for Breitbart News, covering free speech and online censorship issues.
