Musk's Amended Lawsuit Against OpenAI Now Targets Microsoft and Key Executives

Elon Musk’s legal battle with OpenAI has taken a significant turn, as new defendants have been named in an amended complaint. What began as a lawsuit alleging OpenAI’s drift from its nonprofit mission has now evolved, placing Microsoft, Reid Hoffman, and Dee Templeton at the center of Musk’s claims, along with new plaintiffs: Shivon Zilis of Neuralink and Musk's AI venture, xAI.

A Broader Scope: The Allegations

The revised complaint accuses OpenAI of systematically working to suppress competition. Musk’s counsel claims that OpenAI is “actively trying to eliminate competitors” like xAI, by allegedly pressuring investors to withhold funding from rival ventures. This, according to the complaint, extends to allegedly unfair advantages OpenAI enjoys through its close relationship with Microsoft. The amended filing describes OpenAI and Microsoft as operating in a “de facto” merger, with OpenAI purportedly receiving exclusive access to Microsoft’s technology and infrastructure in ways that stifle competition.

The complaint argues that these preferential conditions have disadvantaged Musk’s xAI by:

• Blocking access to OpenAI’s technology due to Microsoft’s exclusive licensing agreements.
• Preventing xAI from securing compute power from Microsoft on similarly favorable terms as OpenAI.
• Creating a pathway for sharing competitively sensitive information solely between OpenAI and Microsoft.

Concerns Over Board Interlock: Reid Hoffman and Dee Templeton

Reid Hoffman’s role emerges as a focal point in the complaint. Musk’s legal team alleges that Hoffman, formerly on OpenAI’s board and also a board member at Microsoft, may have benefited from a dual perspective in dealings between the two companies. Further, Hoffman’s position as a partner at Greylock Partners — which invested in Inflection, an AI startup Microsoft acquired — could have placed him in a position to access privileged information, potentially to the detriment of Musk’s ventures.

The case also implicates Dee Templeton, Microsoft’s former Vice President and OpenAI board observer, alleging that her position enabled the coordination of agreements between Microsoft and OpenAI that could contravene antitrust laws. According to the filing, these interlocking directorships risked “the sharing of competitively sensitive information” that could foster anti-competitive activity.

The Broader Implications for Antitrust in AI

The case underscores significant concerns about competition in the AI sector. The complaint points to instances where interlocking board positions might have facilitated coordination between Microsoft and OpenAI, effectively limiting access for other players in the space. U.S. antitrust law has clear provisions against interlocking directorates, precisely to prevent the sharing of sensitive information that could enable anti-competitive behavior. The complaint asserts that Hoffman and Templeton’s roles in OpenAI’s board structure violated the purpose of this regulation, potentially shaping the future of antitrust interpretation in AI.

What’s Next?

As the lawsuit progresses, it will not only challenge the boundaries of competition in AI but may also shape future governance standards for tech partnerships and nonprofit missions in the sector. In an era where partnerships between AI and big tech giants are increasingly common, this case could set a precedent on the balance between collaborative innovation and the protection of fair competition.

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