Elon Musk complains about OpenAI, Microsoft of anti-competitive behaviour

Tech giant Elon Musk has filed for a preliminary injunction against OpenAI, its co-founders, and key investor Microsoft, accusing them of engaging in anti-competitive behaviour. 

The motion, submitted to the US District Court for the Northern District of California, alleges that OpenAI and its partners are actively discouraging competition while benefiting from sensitive information shared through their collaboration with Microsoft. 

Musk’s lawyer levels several accusations, including discouraging investors from supporting OpenAI competitors, including Musk’s xAI. Sharing proprietary information between OpenAI and Microsoft for competitive advantage. Self-dealing by OpenAI executives, including CEO Sam Altman, who allegedly benefited from business ties with Stripe and other companies.  Violating antitrust laws by facilitating agreements between OpenAI and Microsoft through key personnel like Reid Hoffman and Dee Templeton.

 “An injunction to preserve what is left of OpenAI’s nonprofit character, free from self-dealing, is the only appropriate remedy,” Musk’s legal team argued. Musk’s strained relationship with OpenAI dates back to 2018, when he left the company citing disagreements over its direction. He has since launched xAI, a rival AI venture, which recently raised $5 billion and now boasts $11 billion in funding. Despite its success, Musk’s motion alleges that OpenAI’s investor agreements actively deter funding for competitors.

In October 2024, media reported that OpenAI required investors in its latest funding round to abstain from backing rival companies, including xAI. Musk’s team claims this policy directly impacted xAI’s access to capital. Microsoft’s $13 billion investment in OpenAI is also under scrutiny. Musk’s legal team argues the tech giant’s extensive cloud support and stake in OpenAI’s profits give it undue influence over the startup’s operations. 

OpenAI dismissed Musk’s motion as baseless complaints. The company had previously sought to dismiss Musk’s lawsuit, calling it blusterous and lacking merit.