By techycrunchy 
Elon Musk has intensified his legal battle with OpenAI, filing for a preliminary injunction against the AI research company, several of its co-founders, and Microsoft in the U.S. District Court for the Northern District of California. The motion, filed late Friday, alleges anticompetitive practices, self-dealing, and a betrayal of OpenAI’s nonprofit origins.
Musk’s filing names OpenAI CEO Sam Altman, President Greg Brockman, Microsoft, LinkedIn co-founder Reid Hoffman, and former OpenAI board member Dee Templeton as defendants. The injunction seeks to stop what Musk’s attorneys describe as damaging actions, including:
- Discouraging investment in rival AI companies, including Musk’s own xAI.
- Misusing sensitive information allegedly obtained via OpenAI’s relationship with Microsoft.
- Altering OpenAI’s governance structure to facilitate self-dealing and transferring valuable assets to the for-profit subsidiary.
- Favoring entities with financial ties to OpenAI leadership in business dealings.
Allegations of Irreparable Harm
Musk’s attorneys argue that without intervention, OpenAI’s nonprofit mission will be irreparably harmed. “Plaintiffs and the public need a pause,” the filing states. “An injunction to preserve what is left of OpenAI’s nonprofit character, free from self-dealing, is the only appropriate remedy.”
This filing follows Musk’s long-standing dispute with OpenAI over what he calls a betrayal of its original mission. A co-founder of OpenAI, Musk left the organization in 2018 due to disagreements about its direction. His revived lawsuit comes after claims that he was defrauded of $44 million he donated to support OpenAI’s nonprofit ambitions.
Musk’s complaint also highlights the transformation of OpenAI’s structure from a nonprofit to a “capped-profit” model in 2019, and now, toward a fully for-profit corporation. He argues these shifts have allowed private investors and insiders to benefit at the expense of OpenAI’s stated mission.
Claims of Investor Coercion
The motion accuses OpenAI of discouraging investors from funding competitors, including xAI, Musk’s own AI venture. The filing cites an October report from the Financial Times alleging OpenAI required investors in its latest funding round to avoid backing rival companies. Musk’s attorneys claim at least one major investor withdrew interest in xAI after participating in OpenAI’s funding.
Despite these claims, xAI recently secured $5 billion in funding from prominent investors, including Andreessen Horowitz and Fidelity, positioning it as one of the best-funded AI companies globally.
Allegations Against OpenAI Leadership and Microsoft
The filing also alleges self-dealing by OpenAI leadership. It claims Altman has benefited from OpenAI’s selection of Stripe, a company in which he holds significant financial interest, as its payment processor.
Microsoft, OpenAI’s largest backer with approximately $13 billion invested, is accused of allowing OpenAI to misuse proprietary information and cloud computing resources. The motion further criticizes the dual roles of Hoffman and Templeton, suggesting they facilitated improper agreements between Microsoft and OpenAI.
OpenAI’s Response
An OpenAI spokesperson dismissed Musk’s claims, calling the motion “utterly without merit.” Previously, the company sought to have Musk’s suit dismissed, describing it as “blusterous” and baseless.
The Stakes
Musk’s attorneys argue that allowing OpenAI’s current trajectory will lead to financial and structural consequences that are impossible to reverse. With OpenAI reportedly spending over $5 billion without profitability in sight, they contend that the organization might lack the funds to pay damages if Musk ultimately prevails.
“No objective observer can look at OpenAI today and say it bears any resemblance whatsoever to what it promised to be,” Musk’s legal team concluded.
The case, now heating up, underscores the high stakes and growing tensions in the fast-evolving AI industry.