Musk Goes To Court To Block OpenAI's For-Profit Transition

Elon Musk has filed for a court injunction to halt OpenAI from transitioning into a for-profit organization, as per a recent court filing.

What Happened: According to a court filing, Musk’s legal team has requested Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California to issue an injunction against OpenAI.

The injunction is aimed at stopping OpenAI’s transition from a non-profit to a for-profit company.

The filing also alleges OpenAI of indulging in anti-competitive behavior by discouraging investors from partnering with its competitors, including Musk’s company xAI. It also accuses OpenAI of gaining an unfair advantage from “wrongfully obtained competitively sensitive information” through its ties with Microsoft.

Musk’s lawyers argue that Reid Hoffman, the co-founder of LinkedIn, who previously served on the boards of OpenAI and Microsoft simultaneously, resulted in wrongful information sharing and monopolistic market practices, violating antitrust law.

If the injunction is granted, it would stall OpenAI’s for-profit transition and force the company to halt its partnerships with Microsoft.

Also Read: Elon Musk Is Feuding With Sam Altman In A Major Lawsuit Over OpenAI — And One Appears To Already Have The Upper Hand

Musk and OpenAI CEO Sam Altman were among a group of Silicon Valley figures who co-founded or helped fund OpenAI in 2015 as a non-profit. Musk invested between $45 and $50 million in the company and served on its board of directors until his departure in 2018.

OpenAI, now valued at over $150 billion, announced its plans to restructure as a for-profit entity in September, nearly a decade after its launch.

The legal battle between Musk and Altman has escalated this year, with Musk filing a suit against Altman and other OpenAI executives in March, withdrawing it in June, and re-filing a new version in August.

Why It Matters: The legal dispute between Musk and OpenAI marks a significant turn in the AI industry.

The outcome of this case could set a precedent for future disputes involving non-profit organizations transitioning to for-profit entities and the sharing of competitively sensitive information between companies.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.