Elon Musk urges court to block OpenAI 'illegal' for-profit conversion

By Peter Blumberg

  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.

 

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).