Elon Musk has intensified his legal battle with OpenAI, filing for a preliminary injunction to prevent the company from completing its transition into a fully for-profit business. The motion, submitted late on Friday in the U.S. District Court for the Northern District of California, seeks to halt what Musk's legal team describes as anti-competitive behavior, citing OpenAI’s involvement with key figures including Microsoft and OpenAI CEO Sam Altman.

At the core of Musk’s lawsuit is the accusation that OpenAI is abandoning its original nonprofit mission. The company, which was founded in 2015 as a nonprofit organization, transitioned to a "capped-profit" model in 2019. Now, OpenAI is in the process of shifting to a fully for-profit structure. Musk argues that this move compromises the integrity of OpenAI's mission to make the benefits of its AI research available to all and that it unfairly deprives Musk’s own AI startup, xAI, of investment.

Musk’s legal team claims that OpenAI has been using its influential position in the AI market to discourage investors from funding competitors. According to the filing, OpenAI’s recent funding rounds required investors to refrain from backing any of the company’s rivals, including xAI. This alleged behavior has led to Musk’s legal team asserting that xAI has been deprived of critical capital. Despite these challenges, xAI has successfully raised substantial funds, including a recent $5 billion round that further positions the startup as one of the most well-funded AI companies globally.

Additionally, Musk's attorneys accuse OpenAI of benefiting from "wrongfully obtained competitively sensitive information" using its connections with Microsoft. These allegations point to the collaborative relationship between the two companies, which includes substantial financial backing and the use of Microsoft's cloud resources to power OpenAI’s AI models, including ChatGPT. Musk’s team contends that this partnership enables Microsoft and OpenAI to engage in practices that harm competition within the AI industry.

The injunction motion also highlights the potential conflicts of interest posed by key individuals within OpenAI, including Reid Hoffman, LinkedIn co-founder and former OpenAI board member, and Dee Templeton, a Microsoft executive. Musk’s attorneys argue that Hoffman’s dual role as a board member at both Microsoft and OpenAI has given him an unfair advantage in shaping the companies' dealings, while Templeton’s position at Microsoft could have facilitated anticompetitive arrangements between the two companies.

Musk’s legal team asserts that OpenAI’s current structure and practices undermine the organization’s original mission and that if the injunction isn’t granted, the damage to OpenAI’s nonprofit legacy could be irreversible. The filing warns that OpenAI is burning through substantial funds, with reports suggesting it is spending over $5 billion annually while struggling to reach profitability.

While OpenAI continues to defend its actions, describing Musk's motion as baseless, the legal proceedings mark the latest chapter in the ongoing dispute between Musk and the company he co-founded. With Musk’s xAI gaining momentum and OpenAI facing increased scrutiny, this legal battle could have long-lasting implications for the future of generative AI and the power dynamics in the tech industry.

TECHCRUNCH