A PYMNTS Company

Elon Musk Expands OpenAI Suit, Adds Microsoft Over Antitrust Allegations

By  |  November 17, 2024

Elon Musk, has broadened his legal action against OpenAI, the creator of ChatGPT, now also targeting OpenAI’s largest investor, Microsoft, with federal antitrust claims. Musk’s amended complaint, filed on Thursday in an Oakland, California federal court, alleges that Microsoft and OpenAI engaged in illegal practices to monopolize the generative AI market, effectively marginalizing competitors.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    The lawsuit builds upon Musk’s original complaint filed in August, which accused OpenAI and its CEO, Sam Altman, of prioritizing profit over public interest in their rapid expansion of AI technologies. Musk claims that OpenAI, which he helped to found, shifted from its original mission as a tax-exempt nonprofit to a highly profitable enterprise valued at an estimated $157 billion. According to the complaint, OpenAI and Microsoft’s actions “illegally restricted competition” and created a “market-paralyzing gorgon” in just under a decade, reported Reuters.  Musk is asking the court to nullify OpenAI’s licensing agreement with Microsoft and to force the two companies to divest assets gained through what Musk’s team describes as improper and monopolistic practices.

    We’d love to be your preferred source for news.

    Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

    Add as Preferred Source

    Related: Musk’s Influence on AI Safety Could Lead to Stricter Standards in New Trump Era

    The lawsuit also highlights Musk’s assertion that Microsoft and OpenAI restricted access to investment opportunities for others who might compete with them in AI. These exclusive licensing agreements, Musk claims, are tantamount to a merger that sidesteps standard regulatory procedures, including antitrust review, effectively allowing the two companies to dominate the sector without oversight.

    Microsoft has not commented on the latest developments, while OpenAI issued a statement dismissing Musk’s claims as “even more baseless and overreaching than previous ones,” per Reuters. Musk’s attorney, Marc Toberoff, accused Microsoft of engaging in “escalating anticompetitive practices” and emphasized the importance of transparency, stating, “Sunlight is the best disinfectant.”

    Musk’s involvement with OpenAI dates back to its founding, when he helped to launch the company as a nonprofit organization with a mission to develop safe AI. However, as OpenAI transitioned to a for-profit structure, it also secured billions in investment from Microsoft, transforming into a central figure in the field of generative AI with tools like ChatGPT. The partnership has provoked concerns among some industry figures about the concentration of AI power within a few dominant players.

    The lawsuit follows ongoing tensions between Musk and OpenAI, with Musk publicly criticizing the organization he once co-founded. In a court filing last month, OpenAI argued that Musk’s lawsuit represents an “increasingly blusterous campaign to harass OpenAI for his own competitive advantage.”

    Source: Reuters