OpenAI Accuses Musk of "Anti-Competitive" Practices, Two State Attorneys General Named to Intervene

As OpenAI advances its profit-driven restructuring, a letter to the attorneys general of California and Delaware has made the controversy public.

OpenAI is urging the attorneys general of California and Delaware to investigate Elon Musk. The investigation involves possible “improper and anti-competitive conduct” by him as he tried to prevent OpenAI’s restructuring into a for-profit company.

OpenAI Chief Strategy Officer Jason Kwon (transliteration) said in a letter sent by officials in both states over the week that Musk “has repeatedly tried to seize control of the nonprofit organization for personal gain,” but failed each time. He believes the purpose of this conduct is to control the future direction of artificial intelligence development.

At the time this letter was released, only a few weeks remained before Musk’s case goes to trial with OpenAI and Microsoft (MSFT.O). Musk accuses the startup of straying from its founding mission as a public charity by accepting tens of billions of dollars in investment from the software giant and planning to transition to a for-profit entity. Musk is seeking damages of up to $134 billion from OpenAI and Microsoft.

The OpenAI Chief Strategy Officer also mentioned the upcoming trial in the letter. He said the case could weaken the agreement the two states reached with OpenAI when the company completed its restructuring plan in October.

He said, “Musk’s lawsuit is not only against OpenAI. This also concerns whether the industry still has room for a company that follows the mission and structure set out in the October agreement. Or whether this space must be made for Musk and his co-conspirators.”

As the developer of ChatGPT, OpenAI said when announcing the restructuring that the company has granted Microsoft 27% equity. At the same time, in this transition, its nonprofit division will continue to control the for-profit business.

California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings had previously reviewed the restructuring. After OpenAI made a number of commitments regarding its corporate governance to the two officials, they ultimately decided not to oppose its transition to a for-profit model.

A spokesperson for Bonta said its office is reviewing the letter. Representatives for Jennings and Musk’s lawyers have not yet responded to requests for comment.

In 2015, Musk co-founded OpenAI with Sam Altman and others. But in recent years, the relationship between the two has deteriorated, turning them into rivals. Musk left the OpenAI board in 2018.

In 2023, he co-founded the artificial intelligence company xAI, which has become one of OpenAI’s main competitors. Last year, OpenAI rejected Musk’s acquisition offer. The offer proposed to acquire control of the company’s nonprofit entity assets for $97.4 billion.

A massive amount of information and precise interpretation—only on the Sina Finance app