Elon Musk's 'relentless' campaign to undermine us must stop, says OpenAI

In a lawsuit filed last year, Musk accused OpenAI of straying from its original nonprofit mission by accepting billions in funding from Microsoft in 2019, a year after he stepped down from its board

By Malathi Nayak

 

OpenAI accused Elon Musk of waging a “relentless” campaign for more than a year to damage the startup and urged a court to order him to stop. 

In a court filing Wednesday, the company that Musk and Sam Altman worked together to launch a decade ago said the world’s richest person has weaponized legal claims, social media posts and attacks in the press to try to sabotage OpenAI’s success — all to gain advantage for his own generative artificial intelligence startup, xAI.

 

“Musk has engaged in these efforts to slow OpenAI’s progress and impair its ability to compete effectively in an increasingly crowded field, but also to seize and maintain for xAI an unearned edge designed to impair competition more broadly for the sole benefit of Musk’s xAI, at the expense of the public interest,” OpenAI’s lawyers said in the 100-page filing. OpenAI said it has suffered damages in light of Musk’s “unfair” actions and is seeking a jury trial.

 

 

A lawyer for Musk didn’t immediately respond to a request for comment.

 

In the court fight Musk launched last year, he accused OpenAI of abandoning its founding purpose as a charity when it accepted billions of dollars in backing from Microsoft Corp. starting in 2019, the year after he left OpenAI’s board.

 

A federal judge in Oakland, California, has set a March trial in Musk’s challenge to Altman’s plans to transform OpenAI from a nonprofit to a more conventional, public benefit for-profit company, setting the stage for a high-stakes clash between the two billionaires.

 

In the counterclaims it filed Wednesday, OpenAI said the unsolicited February offer to buy OpenAI for $97.4 billion by Musk and a coalition of deep-pocketed investors was a “sham bid” to thwart the startup’s ability to raise funds and harm its relationships with investors and customers.

 

Altman, OpenAI’s chief executive officer, had spurned the buyout offer, saying OpenAI is “not for sale,” and his board rejected it, too. The bid was a “very public effort” to artificially inflate the nonprofit’s valuation and “has already caused confusion,” OpenAI said in its filing. 

 

The filing also includes an amusing allegation: “The purchase price noted in the Letter of Intent was a joking reference to 974 Praf, a character in Iain Banks’ science fiction series, Look to Windward, from which Musk has also drawn names for multiple SpaceX rockets”

 

If the price tag Musk put on the startup’s valuation is “pursued further, the consequence could be a significant impairment of OpenAI’s ability to pursue its mission on terms uncorrupted by unlawful harassment and interference,” Altman’s company said.

 

OpenAI also pointed to the $100 billion Stargate venture by OpenAI, Oracle, and Softbank announced by the White House shortly after President Donald Trump took office in late January. 

 

“In private, trying to strangle the venture in the cradle, Musk encouraged any investor who would listen not to invest in Stargate,” according to OpenAI’s filing.

 

Musk has previously accused OpenAI of trying to eliminate competitors, such as xAI, by extracting promises from investors not to fund them — a claim that OpenAI has denied.

 

OpenAI said last week that it finalized a $40 billion funding round led by SoftBank. The deal values the company at $300 billion including dollars raised — almost double the ChatGPT maker’s previous valuation of $157 billion from when it raised money in October. 

 

In late March, xAI, which Musk launched in 2023, acquired the X social media platform, formerly Twitter, which he also controls, giving the new combined entity, called XAI Holdings, a value of more than $100 billion, Bloomberg News reported.

 

The case is Musk v. Altman, 24-cv-04722, US District Court, Northern District of California (Oakland).