Elon Musk is asking the court to stop OpenAI from giving up its nonprofit status

• Elon Musk is seeking an injunction against OpenAI to stop its transition to a for-profit entity.

• It’s part of Musk’s lawsuit against Sam Altman, who says OpenAI engaged in anti-competitive behavior.

• The order would block OpenAI’s for-profit transition and partnerships with Microsoft.

Elon Musk is trying to get the court to stop OpenAI’s transition to a new for-profit entity SUBMISSION performances.

In a motion filed Friday, Musk’s lawyers asked Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California to issue an injunction against OpenAI, preventing it from completing its transition from a nonprofit to one for-profit company.

The filing also alleges that OpenAI engaged in anti-competitive behavior by discouraging investors from working with its competitors, such as Musk’s company xAI, and benefited from “wrongfully obtained competitively sensitive information.” through its ties to Microsoft.

Reid Hoffmanco-founder of LinkedIn, previously served on the boards of OpenAI and Microsoft simultaneously. Musk’s lawyers write that Hoffman’s role in both companies, which they describe as the “Microsoft-OpenAI board interlock,” led to mis-sharing of information between the companies and monopolistic market practices. Musk’s lawyers say the partnership amounted to antitrust violations.

“It would be one thing if Microsoft engaged, again, in anti-competitive behavior, this time with OpenAI. Another would be if OpenAI, aided and abetted by Microsoft, would violate the terms of Musk’s foundational contributions to the charity,” the filing reads, referring to OpenAI as a charity due to its nonprofit establishment. “But for OpenAI and Microsoft to exploit Musk’s donations together so they can build a monopoly for profit, one now specifically targeting xAI, is simply too much. Plaintiffs and the public need a break.”

If granted, the injunction request would block OpenAI’s for-profit transition and force the company to end its partnerships with Microsoft.

Lawyers for Microsoft, Hoffman and Musk did not immediately respond to Business Insider’s requests for comment.

It is no longer a nonprofit organization

Musk and OpenAI CEO Sam Altman they were part of a group of Silicon Valley figures, including Hoffman and former PayPal CEO Peter Thiel, who co-founded or helped fund OpenAI in 2015 as a non-profit organization. Musk has invested between 45 and 50 million dollars in the company, the The CEO of Tesla said CNBC last year and OpenAI says on its website and served on its board of directors until his departure in 2018. In the years since, Musk and Altman they sparred publicly over the direction of OpenAI, Musk’s role in its success, and AI development more broadly.

In September, OpenAI — now worth more than 150 billion dollars — announced plans to restructure into a for-profit entity nearly a decade after its launch.

Friday’s filing alleges that OpenAI’s journey from a nonprofit to a for-profit entity was “fraught with anti-competitive practices itself, flagrant violations of its charitable mission and rampant self-dealing.”

“Any leeway OpenAI would have been owed under antitrust law as a purported charity it chose to forgo when it subordinated itself to Microsoft for profit,” the filing said. “OpenAI must therefore play by the same rules as everyone else. It cannot thrash the market like a Frankenstein, woven from whatever corporate forms serve the pecuniary interests of Microsoft and Altman at all times.”

The filing is the latest in an ongoing legal saga between Musk and Altman that has escalated this year. Musk originally filed lawsuit against Altman and other OpenAI executives in March before retiring in June. He filed a new version of the lawsuit again in August, arguing that he was “cheated” in co-founding the company. Musk’s lawyers added earlier this month Microsoft and Hoffman as defendants.

Hoffman in August described Musk’s lawsuit against OpenAI as a case of “sour grapes.”

An OpenAI spokesperson told Business Insider the latest filing in the case, “which recycles the same baseless complaints, continues to be totally without merit.”

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