The 36-page filing, first spotted by TechCrunch, asks a California District Court to implement an injunction against OpenAI and several of its past and current leaders, as well as Microsoft from partaking in activities that would actively harm Musk’s rival AI startup, xAI.
At the centre of this latest filing is OpenAI’s October funding raise, the largest venture capital round in history, which saw the ChatGPT and o1 developer secure $6.6 billion in funding from the likes of Microsoft, Nvidia and MGX.
However, OpenAI is alleged to have stipulated that any backers in that round were unable to invest in any of its competitors, including Antropic, Ilya Sutskever’s Safe Superintelligence, and xAI.
The filing claims that OpenAI and its CEO, Sam Altman “act[ed] in concert with Microsoft, expressly conditioned their acceptance of any investment on the investor’s agreement not to fund OpenAI’s competitors, specifically naming xAI.”
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Lawyers acting for Musk allege that OpenAI and Microsoft are working together which constitutes a group boycott — working together in a way that could be viewed as coordinating to limit competition or access to financial resources in the AI market.
“They are competitors of xAI at the same level and venture capital and private equity are services for which all startup companies are consumers,” the lawsuit reads.
Musk’s lawyers claim OpenAI and Microsoft’s alleged actions violate the Sherman Act, US antitrust laws that specifically bar companies from engaging in practices like group boycotts.
“OpenAI and Microsoft, through concerted action, ‘induc[ed] suppliers’ of investment capital ‘not to sell to potential competitors,’ such as xAI,” the lawsuit reads. “It is no answer that OpenAI’s competitors can still obtain funding from others. If one ignored Microsoft’s elephantine presence in the room, OpenAI acting alone still violated the Sherman Act.”
The latest filing claims that OpenAI expenditure could mean it may “lack sufficient funds to pay damages, resulting in substantial losses to Musk and investors” should he succeed hin his ongoing legal battle.
The injunction request is the latest in the high-profile legal battle between Musk and OpenAI’s founders over an alleged breach of contracts following OpenAI’s shift away from being a nonprofit.
Musk had filed suit in February, only to then drop the case in June days before OpenAI were due to request the case to be dismissed.
OpenAI had hit back at Musk with a series of emails that painted him as the one wanting the then-nonprofit to switch to for-profit, even suggesting merging OpenAI into Tesla.
Musk then reignited the dispute in August by filing a new lawsuit, double the length of the original, alleging fraud, racketeering, false advertising and unfair competition in addition to the original breach of contract claims.
Court filings published in November detailed email exchanges between Musk, Altman, and ex-OpenAI leaders Ilya Sutskever and Greg Brockman, revealed the company previously considered buying semiconductor firm Cerebras Systems.
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