Elon Musk revives lawsuit against OpenAI, adding Microsoft, Reid Hoffman, and Dee Templeton as defendants in an amended complaint
In the updated filing, Neuralink exec and ex-OpenAI board member Shivon Zilis and Musk’s xAI join as plaintiffs.
Musk was a founding member of OpenAI, a non-profit that researches and develops AI for humanity. He departed the organization in 2018 after direction conflicts.
Musk’s lawyers claim that OpenAI is “actively trying to eliminate competitors” like xAI by “extracting promises from investors not to fund them.” Musk’s attorney claims it unfairly benefits from Microsoft’s infrastructure and experience in a “de facto merger.”
“xAI has suffered from an inability to obtain compute from Microsoft on comparable terms to OpenAI and the exclusive flow of competitively sensitive information between OpenAI and Microsoft,” reads the late Thursday federal court complaint in Oakland, California.
The complaint claims Hoffman’s position on Microsoft and OpenAI’s boards and as a Greylock partner provided him a privileged and unlawful view of the firm’s actions. Hoffman left OpenAI’s board in 2023.
According to the complaint, Musk’s lawyer claims that Greylock invested in Inflection, Microsoft’s AI business acquired earlier this year and could potentially be an OpenAI competitor.
Microsoft briefly appointed Templeton as a non-voting board observer at OpenAI, and the updated petition says that she facilitated antitrust-violating arrangements between the two companies.
“The prohibition on interlocking directorates is to prevent sharing of competitively sensitive information in violation of antitrust laws and/or providing a forum for other anticompetitive activity,” the complaint states. Allowing Templeton and Hoffman to join OpenAI’s board undercut its objective.
Musk’s complaint names California attorney general Rob Bonta, Microsoft, Hoffman, and Templeton as defendants. Bloomberg reported last month that OpenAI is discussing a business restructuring with Bonta’s office.
The new case states that Zilis, who left OpenAI’s board in 2023 after four years, is an “injured employee” under the California Corporations Code. According to the complaint, Zilis regularly raised internal concerns about OpenAI’s dealmaking that were ignored, similar to Musk’s.
As a Tesla project director from 2017 to 2019 and Neuralink research director, Zilis is close to Musk. Musk’s neuro-computer interface company called Neurolink. She has Techno Mechanicus, Strider, and Azure, Musk’s children.
The 107-page revised complaint reveals that OpenAI CEO Sam Altman suggested selling its cryptocurrency in January 2018 before the company switched to a capped-profit structure.
“Heads up, I spoke to some of the safety team, and there were a lot of concerns about the ICO and possible unintended effects in the future,” Altman emailed Musk on January 21, 2018, according to the amended complaint.
Initial coin offerings (ICOs) are unregulated ways cryptocurrency companies raise capital. Going to highlight the need to keep this discreet, but I think it’s incredibly vital we get buy-in and let folks weigh in early.”
Musk reportedly rejected the crypto auction. “I have considered the ICO approach and will not support it,” he emailed Altman and OpenAI co-founders Greg Brockman (now president) and Ilya Sutskever (ex-chief scientist), showing an exhibit.
“I believe that would result in massive credibility loss for OpenAI and the ICO.”
The plaintiffs continue to argue that OpenAI benefitted from Musk’s early engagement in the company but reneged on its nonprofit promise to share its AI research.
“No clever drafting nor surfeit of creative dealmaking can obscure what is happening here,” the complaint says. Musk founded OpenAI, Inc., a charity dedicated to safety and transparency, and it is emerging as a for-profit subsidiary of Microsoft.
Musk’s lawsuit is “blusterous” and unjustified, according to OpenAI.