Attorneys representing Elon Musk have filed a brand new movement in a California US District Courtroom asking for a preliminary injunction to stop OpenAI from transitioning to a for-profit group. The submitting additionally accuses OpenAI of indulging in anti-competitive conduct and “appearing in live performance with Microsoft” to cease buyers from backing rivals comparable to xAI.

Musk “verified that at the very least one main investor in OpenAI’s October 2024 funding spherical has subsequently declined to spend money on xAI,” as per the submitting (PDF). “An injunction to protect what’s left of OpenAI’s nonprofit character, free from self-dealing, is the one acceptable treatment,” the submitting wrote.

OpenAI was began in 2015 as a non-profit, with Musk being one of many preliminary funders onboard. Following Musk’s departure in 2018, Open AI transitioned to a capped-profit entity in 2019 and obtained Microsoft as one in all its large backers.

“Elon’s fourth try, which once more recycles the identical baseless complaints, continues to be completely with out benefit,” an OpenAI spokesperson instructed TechCrunch in an announcement.

The submitting is the newest addition to Musk’s long-standing authorized tussle in opposition to the group he co-founded and funded. OpenAI beforehand stated that Musk, at one level, wished “absolute management” or a merger with Tesla and supported for-profit plans.

Elon Musk later shaped one other firm known as xAI. Its generative AI mannequin Grok powers varied options of Musk’s social community X and presents API entry to combine with third-party apps and providers.

Whereas OpenAI is being accused of making hurdles for xAI’s funding, in line with TechCrunch, the latter reportedly raised $5 billion in a spherical this month, which introduced its financial institution stability to round $11 billion.

The submitting additionally alleges that OpenAI leverages “wrongfully obtained competitively delicate data” by way of Microsoft connections. LinkedIn co-founder Reid Hoffman concurrently served on the board of Microsoft and OpenAI till March 2023, when he stepped down from OpenAI’s board, violating the Clayton Act.

Microsoft VP Dee Templeton was appointed as a non-voting member of OpenAI’s board for a brief interval. Musk’s counsel argues {that a} non-voting director has entry to the identical “commercially delicate data” as a voting director, including that each can report forwards and backwards, creating “the chance for the coordination of enterprise selections by rivals.”

“Certainly, the very cause Microsoft obtained its board seat was to coordinate enterprise selections with OpenAI,” the submitting claims. Moreover, it accuses OpenAI CEO Sam Altman of “rampant self-dealing” by partaking in actions comparable to “forming and working the For-Revenue Entities, by which he has materials monetary pursuits, every of which has a contractual relationship to OpenAI, Inc.” and “at the moment trying to transform OpenAI to a for-profit construction.”

OpenAI “will probably lack enough funds to pay damages” if Musk wins the case, the counsel claims, which might be a consequence of Altman’s alleged self-dealing. If the injunction does not come to fruition, it could lead to “irreparable hurt” to the plaintiffs, shoppers, buyers, and the generative AI market.