Elon Musk’s attorney submitted a filing Friday asking a federal court to block OpenAI from converting into a fully for-profit business.

As reported by CNBC (Elon Musk asks court to block OpenAI from converting to a for-profit, written by Jonathan Vanian and Lora Kolodny and available here), attorneys representing Musk, his AI startup xAI, and former OpenAI board member Shivon Zilis filed for a preliminary injunction against OpenAI on Friday. The injunction would also stop OpenAI from allegedly requiring its investors to refrain from funding competitors, including xAI and others.

The latest court filings represent an escalation in the legal feud between Musk, OpenAI and its CEO Sam Altman, as well as other long-involved parties and backers including tech investor Reid Hoffman and Microsoft.

Musk had originally sued OpenAI in March 2024 in a San Francisco state court, before withdrawing that complaint and refiling several months later in federal court. Attorneys for Musk in the federal suit, led by Marc Toberoff in Los Angeles, argued in their complaint that OpenAI has violated federal racketeering, or RICO, laws.

In their motion for preliminary injunction, attorneys for Musk argued that OpenAI should be prohibited from “benefitting from wrongfully obtained competitively sensitive information or coordination via the Microsoft-OpenAI board interlocks.”

The lawyers later added that OpenAI “cannot lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interests of Microsoft.”

In the filing, attorneys for Musk also argue that OpenAI should be prohibited from “benefitting from wrongfully obtained competitively sensitive information or coordination via the Microsoft-OpenAI board interlocks.”

Microsoft has invested nearly $14 billion in OpenAI but revealed in October as part of its fiscal first-quarter earnings report that it would record a $1.5 billion loss in the current period largely due to an expected loss from OpenAI.

A little over a year ago, Altman was fired as CEO of OpenAI – only to be reinstated five days later. Over the several months, OpenAI has seen Chief Scientist Ilya Sutskever and Chief Technology Officer Mira Murati (among others) leave the company. On the flip side, OpenAI closed a major funding round in October that valued the startup at $157 billion. I guess they have at least 157 billion reasons why they want to fight Musk’s filing! 🤣 Tune in for the next edition of the OpenAI soap opera!

So, what do you think? Are you surprised that Elon Musk is asking a federal court to block OpenAI from converting into a fully for-profit business – during Thanksgiving weekend? Please share any comments you might have or if you’d like to know more about a particular topic.

Image created using Microsoft Bing’s Image Creator Powered by DALL-E, using the term “an opera with soap”.

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