14-12-2024 (CALIFORNIA) OpenAI has mounted a robust defence against Elon Musk’s attempt to block its conversion to a for-profit entity, filing a strongly-worded opposition in a California federal court whilst publishing revealing communications between the company and its former co-founder.
In Friday’s court filing, the artificial intelligence powerhouse urged US District Judge Yvonne Gonzalez Rogers to dismiss Musk’s request for a preliminary injunction, which seeks to halt the company’s structural transformation. The AI firm simultaneously released correspondence that appears to show Musk had previously endorsed the concept of a for-profit model before departing the organisation.
The legal dispute has exposed growing tensions between OpenAI and Musk, who has since established his own AI venture, xAI. The Tesla chief executive initiated legal proceedings in August, asserting that OpenAI’s leadership, including CEO Sam Altman, had betrayed the company’s founding principles by prioritising commercial interests over public benefit in AI development.
OpenAI, which has secured substantial backing from Microsoft, contends that Musk’s opposition emerged only after his failed attempts to secure majority ownership and complete control of the organisation. “Competition should be settled in the marketplace, not the courtroom,” the company stated in its public response.
The scope of the legal battle has widened, with Musk recently expanding his lawsuit to include Microsoft and other parties. He alleges a broader conspiracy to dominate the generative AI market, claims which both OpenAI and Microsoft strongly refute. Microsoft emphasised in its separate filing that the two companies maintain independent operations and compete actively.
Since its establishment as a non-profit in 2014, OpenAI has evolved into a prominent figure in artificial intelligence, particularly following Microsoft’s multi-billion-dollar investment. The company recently completed a significant funding round of $6.6 billion, potentially valuing it at $157 billion. Meanwhile, Musk’s xAI has reported securing approximately $6 billion in equity financing.
OpenAI’s proposed restructuring would see its core operations transition to a for-profit benefit corporation, with the original non-profit maintaining a minority stake. Judge Rogers is scheduled to hear arguments regarding Musk’s injunction request on 14 January.
