Musk escalates Altman legal feud, casting OpenAI as monopolist

Elon Musk is ramping up his feud with Sam Altman, alleging in a court filing that OpenAI is trying to corner the market for generative artificial intelligence and sacrificing safety in a race to get ahead.

In a revised version of a lawsuit he filed in August, Musk highlighted antitrust concerns about OpenAI’s journey from its nonprofit roots in 2015 — when he and Altman worked together as founders — to its current effort to restructure as a for-profit company after billions of dollars in outside investment poured in from Microsoft and others.

Musk, who launched his xAI startup last year, said OpenAI has now abandoned all pretense of proceeding as a charity to benefit humanity with a focus on openness and safety as it tries to complete its restructuring.

“Microsoft and OpenAI, apparently unsatisfied with their monopoly, or near so, in generative artificial intelligence (‘AI’) are now actively trying to eliminate competitors, such as xAI, by extracting promises from investors not to fund them,” lawyers for the billionaire wrote in the amended complaint filed late Thursday in federal court in Oakland.

The revised suit lists 26 legal claims and runs 107 pages, compared with 15 claims in the 83-page original complaint.

In a statement Friday, OpenAI rejected the claims and provided a web link to a collection of emails it said showed Musk had previously supported the for-profit structure. “Elon’s third attempt in less than a year to reframe his claims is even more baseless and overreaching than the previous ones,” OpenAI said. “His prior emails continue to speak for themselves.”

Musk’s filing adds California Atty. Gen. Rob Bonta and Microsoft as defendants. The company is in early talks with Bonta’s office over the process to change its corporate structure, Bloomberg News reported this month.

The restructuring is now in “full swing” with OpenAI and Microsoft having hired investment banks “to negotiate Microsoft’s enormous stake and set a hard two-year deadline to complete the conversion,” according to the revised complaint.

In a statement, a representative of Bonta’s office said, “We are reviewing the lawsuit and will respond as appropriate in court.”

Microsoft declined to comment.

To back up his claim that OpenAI is becoming more anticompetitive, Musk said in the filing that the company “has attempted to starve competitors of AI talent by aggressively recruiting employees with offers of lavish compensation, and is on track to spend $1.5 billion on personnel for just 1,500 employees.”

Musk also expressed concern that OpenAI has “started to contract with the Department of Defense” and removed a clause from its usage policies banning the use of its technology for “activity that has a high risk of physical harm” such as “weapons development” or “military and warfare.”

According to the filing, “droves” of security researchers are resigning in protest, or being forced out, and safety teams have been dissolved, “all to make way for ‘security’ personnel whose real job is to facilitate military contracting.”

Nayak and Burnson write for Bloomberg.