Musk escalates legal battle with OpenAI to include Microsoft and Reid Hoffman
Elon Musk has escalated his legal battle against OpenAI, adding Microsoft and venture capitalist Reid Hoffman to the list of defendants in his lawsuit. The move comes as Musk continues to allege anti-competitive practices and a breach of OpenAI's original mission.
The allegations
Musk's updated complaint portrays OpenAI’s transformation from a tax-exempt charity to a profit-driven powerhouse as a betrayal of its founding principles. According to the complaint, Microsoft, which has invested approximately $13 billion in OpenAI since 2019, is accused of leveraging its influence to transform the AI company into a market-dominating entity for its own benefit.
The filing also alleges that Microsoft board member Reid Hoffman and a vice president, Dee Templeton, engaged in practices violating antitrust laws by simultaneously holding positions with OpenAI and Microsoft, enabling potential coordination of anti-competitive activities.
Musk’s lawsuit characterizes the collaboration between Microsoft and OpenAI as a “de facto merger,” claiming that Microsoft effectively controls OpenAI through its critical investments and exclusive cloud computing agreements.
Musk’s claim: Betrayal of OpenAI’s mission
Musk, who co-founded OpenAI in 2015 with the mission to ensure AI benefits all of humanity, alleges that the organization deviated from its charitable roots when it transitioned to a “capped-profit” structure. According to the complaint, OpenAI’s intellectual property, staff, and goodwill—nurtured in its early days with Musk’s funding and connections—have been funneled into its for-profit arms, enabling massive gains for private shareholders.
The lawsuit accuses OpenAI of misleading the public and donors about its commitment to transparency and altruism, all while becoming a $157 billion tech juggernaut.
OpenAI’s response
An OpenAI spokesperson dismissed Musk’s claims as “baseless and overreaching,” emphasizing that the decision to transition to a capped-profit model was necessary to secure the resources needed to advance cutting-edge AI safely. The organization has also pointed to Musk’s historical support for the transition, citing past communications where he expressed understanding of the need for funding through for-profit mechanisms.
Broader implications
The lawsuit highlights growing concerns over the consolidation of power among Big Tech firms in the AI industry. Musk warns that unchecked corporate influence in AI development risks sidelining safety and ethical considerations, echoing his long-standing advocacy for cautious and decentralized AI innovation.
Next steps
Musk’s legal team seeks to roll back OpenAI’s transformation and enforce commitments to transparency and public benefit. The case could serve as a pivotal test of antitrust laws in the AI sector, potentially reshaping how emerging technologies are governed and commercialized.
Both Microsoft and OpenAI are expected to mount a vigorous defense. Meanwhile, we will be following closely and update the story as it unfolds.
