Elon Musk is seeking a federal court injunction to prevent OpenAI from converting into a for-profit business and allegedly preventing investors from funding competitors, including Musk’s startup xAI. This legal battle between Musk, OpenAI, and its CEO Sam Altman has escalated, with Musk’s attorneys now alleging violations of federal racketeering and antitrust laws by OpenAI and Microsoft. The court filings accuse OpenAI of blocking xAI’s access to essential investment capital through a group boycott and argue against the unfair advantage OpenAI has gained through shared competitive information.
OpenAI, originally a non-profit that transitioned to a capped-profit model in 2019, is now in the process of becoming a fully for-profit public benefit corporation to attract more investors. Microsoft, which has invested nearly $14 billion in OpenAI, is expected to report a significant loss due to its investment in the company. In contrast, OpenAI recently closed a funding round that valued the company at $157 billion.
The generative AI market is predicted to surpass $1 trillion in revenue within a decade, leading to fierce competition among startups like xAI, Anthropic, and tech giants such as Google. Business spending on generative AI has surged 500% this year, highlighting the growing importance of AI technology. The legal dispute between Elon Musk and OpenAI reflects the high stakes involved in the AI industry and the battle for dominance in this rapidly growing market.
Photo credit
www.nbcnews.com