Tech mogul Elon Musk has filed for a preliminary injunction against OpenAI, its co-founders, and key investor Microsoft, accusing them of engaging in anticompetitive behaviour. The motion, submitted to the U.S. District Court for the Northern District of California on Friday, alleges that OpenAI and its partners are actively discouraging competition while benefiting from sensitive information shared through their collaboration with Microsoft.
The injunction also targets OpenAI’s shift from its original nonprofit status to a for-profit model, with Musk’s legal team asserting this transformation undermines its founding principles.
Musk’s attorneys outlined several accusations, including:
• Discouraging investors from supporting OpenAI competitors, including Musk’s xAI. • Sharing proprietary information between OpenAI and Microsoft for competitive advantage. • Self-dealing by OpenAI executives, including CEO Sam Altman, who allegedly benefited from business ties with Stripe and other companies. • Violating antitrust laws by facilitating agreements between OpenAI and Microsoft through key personnel like Reid Hoffman and Dee Templeton.
“An injunction to preserve what is left of OpenAI’s nonprofit character, free from self-dealing, is the only appropriate remedy,” Musk’s legal team argued.
Musk’s strained relationship with OpenAI dates back to 2018, when he left the company citing disagreements over its direction. He has since launched xAI, a rival AI venture, which recently raised $5 billion and now boasts $11 billion in funding. Despite its success, Musk’s motion alleges that OpenAI’s investor agreements actively deter funding for competitors.
In October, Financial Times reported that OpenAI required investors in its latest funding round to abstain from backing rival companies, including xAI. Musk’s team claims this policy directly impacted xAI’s access to capital.
The motion also accuses OpenAI of using its resources to benefit executives personally. For example, Altman is alleged to have pushed Stripe—where he holds financial interests—as OpenAI’s payment processor. Hoffman, a former OpenAI board member and Microsoft board member, is accused of leveraging his dual roles to oversee partnerships that violate antitrust rules.
Microsoft’s $13 billion investment in OpenAI is also under scrutiny. Musk’s legal team argues the tech giant’s extensive cloud support and stake in OpenAI’s profits give it undue influence over the startup’s operations.
In response, OpenAI dismissed Musk’s motion as “recycling the same baseless complaints.” The company had previously sought to dismiss Musk’s lawsuit, calling it “blusterous” and lacking merit.
An OpenAI spokesperson reiterated this stance, saying, “Elon’s fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit.”