Elon Musk’s legal representatives have filed a petition for a preliminary injunction against OpenAI, several of its co-founders, and Microsoft, seeking to halt what they characterize as anticompetitive activities.
The motion for the injunction was submitted on Friday in the U.S. District Court for the Northern District of California, targeting OpenAI, its CEO Sam Altman, President Greg Brockman, Microsoft, former OpenAI board member and LinkedIn co-founder Reid Hoffman, and ex-board member and Microsoft VP Dee Templeton. The lawsuit alleges multiple unlawful actions and aims to put an end to them. Specific accusations include:
- Discouraging financial backers from investing in OpenAI rivals such as Musk’s AI venture, xAI.
- Benefiting from “illegally obtained competitively sensitive information” through ties to Microsoft.
- Transforming OpenAI’s governance into a profit-oriented model and “transferring any significant assets, including intellectual property owned, held, or controlled by OpenAI, Inc., its subsidiaries, or affiliates.”
- Encouraging OpenAI to collaborate with entities where any defendant possesses a “substantial financial interest.”
Musk’s legal team argues that without this injunction, there will be “irreparable harm.”
“The plaintiffs and the public require a diversion,” they stated in their motion. “An injunction to preserve the remaining nonprofit essence of OpenAI, free from self-interest, is the only appropriate remedy. If this does not occur, the vision of OpenAI that Musk and the public hold dear will be lost by the time the court addresses the main questions.”
Musk’s earlier lawsuit against OpenAI, which fundamentally claimed that the organization had deviated from its nonprofit mission of making AI research accessible, was dismissed in July but revived later in the summer. An updated complaint in November included new defendants, such as Microsoft, Hoffman, and Templeton, along with two additional plaintiffs: Shivon Zilis, a Neuralink executive and former OpenAI board member, and xAI.
Musk has previously claimed in legal actions that he was misled into donating over $44 million to OpenAI, citing his “well-known concerns about the existential risks” tied to AI. Musk, who co-founded OpenAI, left the company in 2018 due to differences in vision.
In the injunction request, Musk’s attorneys allege that OpenAI is obstructing xAI’s funding by dissuading investors from backing it or its competition. The Financial Times reported in October that OpenAI required investors in its latest funding round to abstain from supporting any rivals, including xAI.
“Musk has confirmed that at least one high-profile investor from OpenAI’s October funding round later opted against investing in xAI,” indicated Musk’s legal counsel.
Nevertheless, xAI has reportedly been successful in acquiring funding recently. Reports suggest the startup concluded a $5 billion funding round this month with contributions from notable investors like Andreessen Horowitz and Fidelity. With around $11 billion in funding, xAI is among the most well-capitalized AI startups globally.
Musk’s injunction motion also claims that Microsoft and OpenAI are illegally sharing proprietary data and resources, suggesting that several defendants, including Altman, are engaging in self-serving behaviors that undermine market competition. The filing highlights that OpenAI selected Stripe, a payment platform in which Altman has a “significant financial interest,” as its payment processor. (Altman reportedly made billions from his stake in Stripe.)
Microsoft, which made its initial investment in OpenAI in early 2019, has progressively broadened its partnership, committing nearly $13 billion for an effective 49% share of the company’s profits. Additionally, Microsoft has granted OpenAI considerable access to its cloud infrastructure, enabling the startup to develop and operate AI models like those powering ChatGPT.
Musk’s attorneys assert that Hoffman’s positions on the boards of both Microsoft and OpenAI, along with his role as a partner at Greylock investment firm, provided him with unique insights into the companies’ operations. (Hoffman stepped down from OpenAI’s board in 2023.) Concerning Templeton, who was briefly appointed by Microsoft as a nonvoting observer on OpenAI’s board, Musk’s lawyers contend that her role allowed her to facilitate agreements between Microsoft and OpenAI that may violate antitrust laws.
“Retaining OpenAI’s nonprofit status until a final resolution and halting further self-serving transactions by Altman protect both the organization’s founding mission and the public’s interest in its proper management,” noted Musk’s counsel.
Musk’s legal team highlighted that without the injunction, OpenAI may “lack sufficient funds” to cover damages if the court ultimately sides with Musk. (Currently, OpenAI reportedly spends over $5 billion and is far from achieving profitability.) They also argue that if a judge stops OpenAI from becoming a for-profit entity, reversing the company’s transactions could be “virtually impossible” without triggering “widespread investor losses,” should OpenAI continue to draw new investments.
“No impartial observer can look at OpenAI today and claim that it resembles what it promised to be,” asserted Musk’s attorneys. “Plaintiffs respectfully urge the court to maintain the status quo and prevent the defendants’ escalating misconduct until a final outcome is reached.”
OpenAI did not immediately respond to TechCrunch’s request for comment. The organization has previously sought to dismiss Musk’s lawsuit, calling it “blusterous” and unfounded.
