Elon Musk Files Lawsuit to Block OpenAI’s For-Profit Shift

Tech mogul Elon Musk has filed a lawsuit seeking a court injunction to stop OpenAI’s transition to a for-profit structure, calling the move “illegal” and warning that it could lead to the monopolization of the artificial intelligence market, particularly through OpenAI’s ChatGPT.

Musk expressed concerns that the transition would harm competitors, including his own AI startup, xAI. In his court filings, Musk accused OpenAI and its CEO, Sam Altman, of straying from their original nonprofit mission, which they had established together in 2015. He pointed to OpenAI’s 2019 partnership with Microsoft, which saw the tech giant invest billions, as the point where the organization shifted from its founding goal of advancing AI for societal good to a profit-driven focus.

Musk’s legal team argued that OpenAI had transformed into a monopolistic entity, asserting, “It cannot lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interests of Microsoft and Altman at any given moment.”

The lawsuit also accuses OpenAI of entering agreements that violate federal antitrust laws, alleging that these deals restrict funding for potential competitors. In response, OpenAI dismissed Musk’s claims, calling them “baseless” and reaffirming its commitment to innovation and transparency. A spokesperson for the company stated, “Musk’s filing again recycles the same baseless complaints and continues to be utterly without merit.”

This lawsuit marks Musk’s third attempt to challenge OpenAI’s shift toward a for-profit model. He first filed a lawsuit in California state court in February, withdrew it in June, and then refiled it in federal court in Oakland in August.

Along with seeking an injunction to block OpenAI’s restructuring, Musk’s motion also aims to prevent the company from forming exclusive agreements with investors that he claims could stifle competition.

As Musk challenges OpenAI, he continues to build his own AI venture, xAI, which launched in 2023. The startup, recently valued at $50 billion, has seen its valuation more than double since May 2024.