Elon Musk’s legal team has filed for a preliminary injunction against OpenAI, several of its co-founders, and Microsoft, a major investor and collaborator, alleging anticompetitive practices. The motion, submitted to the U.S. District Court for the Northern District of California on Friday, names OpenAI, its CEO Sam Altman, President Greg Brockman, Microsoft, former OpenAI board members Reid Hoffman and Dee Templeton, among others. It seeks to halt various actions Musk’s attorneys claim are illegal, including:
Discouraging investors from funding rivals like Musk’s AI venture, xAI.
Using confidential competitive information obtained through ties with Microsoft.
Shifting OpenAI’s structure from nonprofit to for-profit and transferring key assets.
Engaging in business deals benefiting entities in which the defendants have financial stakes.
Musk’s attorneys argue that these practices could cause “irreparable harm” if not stopped. The filing emphasizes the need to preserve OpenAI’s nonprofit foundation, free from alleged conflicts of interest, to prevent further damage to Musk’s claims and the public interest.
This legal battle follows Musk’s initial lawsuit against OpenAI, which was withdrawn in July and revived in the summer with new defendants, including Microsoft and Hoffman. The lawsuit claims OpenAI abandoned its original nonprofit mission and alleges Musk was misled into donating over $44 million, exploiting his concerns about AI’s potential risks.
The injunction motion accuses OpenAI of depriving xAI of funding by pressuring investors to avoid supporting competitors. Musk’s team cited a Financial Times report from October alleging OpenAI required investors to pledge not to fund rivals, including xAI. Musk confirmed at least one investor declined to back xAI after participating in OpenAI’s funding round.
Despite these claims, xAI recently secured $5 billion in investments from prominent firms like Andreessen Horowitz and Fidelity, bolstering its financial position with around $11 billion in total funding.
Musk’s attorneys also allege improper sharing of proprietary information between OpenAI and Microsoft, along with self-dealing by several defendants, including Altman. The filing notes that OpenAI selected Stripe, a company in which Altman has significant financial interests, as its payment processor, potentially violating antitrust rules.
Microsoft, a major OpenAI partner since 2019, has invested approximately $13 billion in the company, securing significant influence and providing extensive cloud resources for AI development. Musk’s attorneys argue that Hoffman and Templeton, through their roles in both companies, facilitated potentially anticompetitive agreements.
The filing urges the court to maintain OpenAI’s nonprofit status and prevent further questionable transactions, warning that OpenAI might lack funds to pay damages if Musk prevails. It also highlights concerns about investor losses and the difficulty of reversing OpenAI’s structural changes if the case concludes in Musk’s favor.
In response, OpenAI has previously dismissed Musk’s claims as unfounded. The company has yet to comment on the recent injunction motion.
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