The legal dispute between renowned American entrepreneur Elon Musk and OpenAI continues to escalate.
On Friday Eastern Time, the legal team representing Musk and his AI startup xAI applied for a preliminary injunction in the US federal court, requesting the court to prevent OpenAI from transforming into a fully for-profit enterprise.
They also applied for a court order prohibiting OpenAI from restricting its investors from providing funds to competitors, including xAI and other companies.
The legal dispute between Musk and OpenAI began at the beginning of this year. In March 2024, Musk sued OpenAI in a state court in San Francisco, but later withdrew the lawsuit. A few months later, he filed a new lawsuit in federal court. In this federal lawsuit, Musk's legal team is led by Marc Toberoff from Los Angeles, who argued in the lawsuit that OpenAI violated federal extortion laws (RICO).
In mid November of this year, Musk's legal team expanded the scope of the complaint, accusing Microsoft and OpenAI of violating antitrust laws. OpenAI reportedly demanded that its investors agree not to invest in competitor companies, including Musk's latest startup company, xAI.
An OpenAI spokesperson stated in a statement:
Elon's fourth attempt repeated the same unfounded complaints, and such an attempt is still completely worthless
With ChatGPT becoming popular worldwide, OpenAI has become one of the largest startups in recent years, helping to lead a large number of enterprises' enthusiasm for artificial intelligence and related large-scale language models.
Musk's lawyers wrote in the document:
Microsoft and OpenAI are now attempting to consolidate their dominant positions by cutting off channels for competitors to obtain investment capital, while continuing to benefit from years of competition sensitive information shared during the formation of generative artificial intelligence
The lawyers also wrote that OpenAI's requirement for investors to agree to the terms is equivalent to a "group boycott," which "hinders xAI from obtaining the necessary investment capital.
OpenAI first debuted as a non-profit organization in 2015, and then transitioned to the so-called upper limit profit model in 2019, where OpenAI's non-profit organization is the management entity of its for-profit subsidiary. Currently, it is transforming into a fully for-profit company, which may make it more attractive to investors.
In October of this year, OpenAI completed a significant round of financing with a valuation of $157 billion. Thrive Capital led the financing, and investors such as Microsoft and Nvidia also participated in the financing.
Currently, OpenAI is facing increasingly fierce competition from startups such as xAI and Anthropic, as well as tech giants like Google. According to recent data from Menlo Ventures, it is expected that the revenue of the generative artificial intelligence market will exceed $1 trillion within 10 years, and global enterprise spending on generative artificial intelligence has surged by 500% this year.