Elon Musk has filed a preliminary injunction in the US District Court for the Northern District of California to prevent OpenAI from converting to a fully for-profit entity.
Elon Musk has escalated his legal battle with OpenAI by filing a preliminary injunction in the US District Court for the Northern District of California, seeking to prevent the artificial intelligence company from converting to a fully for-profit entity and alleging multiple anti-competitive practices.
The lawsuit targets OpenAI, CEO Sam Altman, President Greg Brockman, Microsoft, and several board members, demanding a pause on the company’s structural transformation and business operations. Musk’s legal team argues that OpenAI has strayed dramatically from its original nonprofit mission of making AI research publicly accessible.
Key allegations include discouraging investors from funding OpenAI’s competitors, particularly Musk’s own AI company xAI, and improperly sharing proprietary information with Microsoft. The motion claims that OpenAI has extracted promises from investors not to support rival AI companies, a practice Musk’s attorneys argue violates antitrust regulations.
The lawsuit also highlights potential conflicts of interest, pointing to Sam Altman’s financial interests in Stripe, which was selected as OpenAI’s payment processor, and questioning the relationships between OpenAI, Microsoft, and board members like Reid Hoffman.
Musk, an original co-founder who left OpenAI in 2018, contends he was defrauded of over $44 million in donations. OpenAI has dismissed the lawsuit as “baseless,” with a spokesperson describing this as Musk’s “fourth attempt” to challenge the company.
Despite the legal challenges, xAI—Musk’s competing AI venture—has reportedly secured $5 billion in funding, positioning itself as a formidable competitor in the rapidly evolving AI landscape.
The court will now consider whether to grant the preliminary injunction, which could potentially halt OpenAI’s ongoing transition to a for-profit structure.
