Musk Moves to Block OpenAI’s Shift to a For-Profit Entity

Elon Musk's legal team has filed a motion seeking a preliminary injunction to halt OpenAI’s transition into a for-profit organization.

Filed on Friday in the U.S. District Court for the Northern District of California, the lawsuit targets OpenAI, several of its co-founders, and Microsoft, its major investor and partner, according to TechCrunch. The filing outlines allegations of anti-competitive practices:

The suit accuses the defendants of discouraging investors from supporting OpenAI competitors, including Musk’s xAI, founded in July 2023.
It also claims OpenAI benefited from "improperly obtained competitively sensitive information" through its relationship with Microsoft.
Musk’s lawyers allege OpenAI has shifted toward a commercial governance structure, compelling the company to work with entities that hold "significant financial interests."
The lawsuit further mentions "the transfer of material assets, including intellectual property, owned by OpenAI, its subsidiaries, or affiliates."

The lawyers argue that failing to grant the injunction would cause "irreparable harm" and that "plaintiffs and the public require a reprieve." This legal action is viewed as Musk’s attempt to preserve OpenAI’s original non-profit mission of creating AI accessible to all:

An injunction to preserve what is left of OpenAI’s nonprofit character, free from self-dealing, is the only appropriate remedy.

Musk, one of OpenAI’s co-founders, left the company in 2018 over disagreements regarding its direction. His contentious legal history with OpenAI includes a withdrawn lawsuit in July, which he later revived in late summer. In prior complaints, Musk alleged that he was defrauded of $44 million in donations, exploiting his "well-known concerns about the existential harm" of AI.

OpenAI spokesperson Hannah Wong dismissed Musk’s claims in a statement to The Verge: