Elon Musk is making headlines once again by intensifying his ongoing feud with OpenAI, the company he co-founded nearly nine years ago. On December 1, 2024, Musk’s legal team filed for a preliminary injunction to prevent OpenAI from fully transitioning into a for-profit organization.
Musk’s attorneys argue that OpenAI’s transition to a for-profit model could breach federal antitrust and racketeering laws. They assert that OpenAI’s investor relationships create anti-competitive practices, putting Musk’s own AI company, xAI, at a disadvantage, reported CNBC.
“OpenAI cannot lumber about the marketplace as a Frankenstein stitch together from whichever corporate forms serve the pecuniary interests of Microsoft,” Musk’s legal filings assert, reflecting his concern over the future of AI innovation and competition within the sector.
Musk’s legal team has raised several key allegations, including claims that OpenAI has discouraged investors from supporting competitors, especially Musk’s own AI company, xAI. The motion also accuses OpenAI of sharing proprietary information with Microsoft and securing agreements from investors not to fund rival AI ventures, actions Musk’s attorneys argue breach antitrust regulations.
Musk’s latest filing comes amid OpenAI’s plans to change from its original non-profit structure to a ‘benefit corporation,’ enabling unlimited profit generation. Musk’s legal team argues that this shift contradicts OpenAI’s founding values, which emphasized open research and broad access.
Musk, a co-founder who departed OpenAI in 2018, alleges he was defrauded of more than $44 million in donations. In response, OpenAI has called the lawsuit “baseless,” with a spokesperson noting that this is Musk’s “fourth attempt” to challenge the company. OpenAI has been facing growing competition from startups like xAI and Anthropic, as well as major tech giants like Google.
Despite the ongoing legal challenges, Musk’s competing AI venture, xAI, has successfully secured $5 billion in funding, positioning it as a significant player in the rapidly evolving artificial intelligence sector. This financial backing strengthens its competitive edge against other AI companies, including OpenAI. The court will now review Musk’s request for a preliminary injunction, which, if granted, could block OpenAI’s transition to a for-profit structure and potentially reshape the future of the company’s operations.
