Musk Steps Up Feud With OpenAI, Microsoft

"Elon Musk escalated his legal feud with OpenAI and Microsoft, claiming the companies colluded to eliminate competition in an attempt to dominate the development of artificial intelligence.

In an amended lawsuit filed in a San Francisco court late Thursday, Musk made fresh antitrust claims against OpenAI, the ChatGPT creator he helped found, and added Microsoft and venture capitalist Reid Hoffman as defendants.

Musk also accused OpenAI Chief Executive Sam Altman of "rampant self-dealing" between OpenAI and other companies in which Altman is involved, and of pushing OpenAI into "a de facto merger" with Microsoft -- a phrase the suit repeats seven times.

The new complaint is the latest in a series of legal salvos that Musk has launched against OpenAI this year. An earlier complaint, filed in February, alleges OpenAI and Altman broke the artificial-intelligence company's founding agreement by giving priority to profit over benefits to humanity. In that 46-page complaint, Musk claimed that OpenAI's close relationship with tech giant Microsoft goes against the company's original commitment to public, open-source AI.

After withdrawing that original suit without explanation in June, Musk revived it in August adding new claims of unfair business practices and allegations that he was manipulated into believing that the AI company he was helping launch would be a nonprofit.

He argued that OpenAI effectively defrauded him out of more than $44 million he says he donated to the company between 2016 and 2020 by preying on his "well-known concerns about the existential harms" posed by advanced artificial general intelligence, or AGI, often defined as AI that broadly exceeds human-level.

"Elon's third attempt in less than a year to reframe his claims is even more baseless and overreaching than the previous ones," an OpenAI spokesman said Friday.

Microsoft, which first invested in OpenAI in 2019, ramped up the partnership last year. It invested $13 billion in exchange for what is effectively a 49% stake in the earnings of OpenAI's for-profit arm. Hoffman serves as a member of Microsoft's board and was previously on the board of OpenAI.

Musk founded his own AI company called xAI last year. The company has released an AI chatbot and is pushing to train more AI models, building a massive new data center in Tennessee that it has dubbed Colossus.

In the newly amended suit, Musk accuses Altman and the other defendants of lying to donors, markets, regulators and the public.

He also accuses OpenAI and Microsoft of engaging in anticompetitive behavior by discouraging investors in its latest $6.6 billion funding round from investing in competitors, including xAI.

"Microsoft and OpenAI, apparently unsatisfied with their monopoly, or near so, in generative artificial intelligence are now actively trying to eliminate competitors, such as xAI, by extracting promises from investors not to fund them," the complaint says.

Microsoft and Hoffman didn't immediately respond to requests for comment.

In response to the original suit in March, Altman and OpenAI Chief Strategy Officer Jason Kwon sent emails to staff saying the company's success made it a target for lawsuits and regulatory inquiries.

"We believe the claims in this suit may stem from Elon's regrets about not being involved with the company today," Kwon wrote in a memo reviewed by The Wall Street Journal at the time.

OpenAI is governed by a nonprofit board, which controls the for-profit entity, but it has started the process of converting to a for-profit company.

News Corp, owner of The Wall Street Journal and Dow Jones Newswires, has a content-licensing partnership with OpenAI." [1]

1. EXCHANGE --- Musk Steps Up Feud With OpenAI, Microsoft --- Billionaire accuses ChatGPT maker of anticompetitive behavior in new filing. Vipers, Gareth; Schechner, Sam.  Wall Street Journal, Eastern edition; New York, N.Y.. 16 Nov 2024: B.10.