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Elon Musk has urged a federal court to intervene in what he describes as OpenAI’s “illegal” shift from a nonprofit to a for-profit entity. Musk’s court filing calls for an immediate pause on OpenAI’s growing dominance, arguing it poses a threat not only to his AI venture, xAI, but also to the broader public interest.
In his latest legal move, Musk reignited his criticism of OpenAI CEO Sam Altman. The two originally collaborated in 2015 to establish OpenAI as a nonprofit with a mission to advance artificial intelligence for societal benefit. Musk alleges that OpenAI abandoned this founding principle when it accepted substantial funding from Microsoft in 2019, fundamentally altering its operational focus.
Musk contends that OpenAI’s alignment with Microsoft has allowed it to grow into an unchecked “behemoth,” warning that without judicial intervention, the company could overshadow its competitors irreparably. OpenAI, however, dismissed Musk’s claims, with a spokesperson stating that the filing “recycles the same baseless complaints” and is “without merit.”
Reports suggest that OpenAI is in early discussions with the California attorney general’s office about formalizing its corporate restructuring. This comes as Musk escalates his legal battle, which began with a state court filing in February. While that case was dropped in June, Musk renewed his challenge in federal court in August.
The injunction Musk is seeking aims to temporarily halt OpenAI’s corporate transformation and prevent agreements with investors that allegedly restrict funding to competing firms—actions he claims breach federal antitrust laws. Musk’s lawyers argue that OpenAI cannot claim nonprofit privileges while operating as a profit-driven entity. “OpenAI must adhere to the same antitrust rules as other market players,” they wrote, accusing the company of becoming a “Frankenstein entity” designed to serve the financial interests of Microsoft and Altman.
Musk’s xAI, launched in 2023, has experienced rapid growth, with a recent valuation of $50 billion—more than doubling in value since May. This meteoric rise underscores Musk’s vested interest in ensuring a level playing field within the competitive AI sector.
The case, Musk v. Altman, is being heard in the US District Court, Northern District of California (Oakland), under docket number 4:24-cv-04722.
