World’s Richest Man Asks Court to Block OpenAI From Making Profit
Elon Musk, the world’s richest man requested that a federal court prevent OpenAI from becoming a wholly for-profit company.
Lawyers for Musk his AI company xAI, and Shivon Zilis, a former board member of OpenAI, requested a preliminary injunction against OpenAI on Friday.
Additionally, the injunction would prevent OpenAI from purportedly requiring its investors to forgo funding rivals like xAI .
Musk, OpenAI, its CEO Sam Altman, and other long-standing supporters and parties like tech investor Reid Hoffman and Microsoft, are embroiled in a legal battle that has escalated with the latest court filings.
OpenAI began as a non-profit in 2015 and transitioned to a so-called capped-profit model in 2019, wherein OpenAI governed its for-profit subsidiary.
It is transforming into a fully for-profit public benefit corporation, which may increase its appeal to investors. Additionally, OpenAI would be able to maintain its non-profit status as a distinct legal entity under the restructuring plan
Musk first sued OpenAI in March 2024 in a San Francisco state court, but he later withdrew the complaint and filed again in federal court a few months later. In their complaint, Musk’s Los Angeles-based attorneys, led by Marc Toberoff, contended that OpenAI had broken federal racketeering, or RICO, laws.
The complaint was enlarged in mid-November to include claims that OpenAI and Microsoft had broken antitrust laws when the Chat GPT creator allegedly requested investors’ consent to refrain from funding competitors, including Musk’s most recent venture, xAI.
Musk’s lawyers contend in their motion for a preliminary injunction that OpenAI should not be allowed to “benefit from the Microsoft-OpenAI board interlocks or coordination via the wrongfully obtained competitively sensitive information.”. “Elon’s fourth attempt, which repeats the same unfounded grievances, is completely without merit,” an OpenAI representative said in a statement.
Since ChatGPT became a huge success and helped spark corporate interest in AI and related large language models, OpenAI has become one of the largest startups in recent years.
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