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OpenAI Takes Legal Action Against Elon Musk
OpenAI has initiated a lawsuit against Elon Musk, alleging that the entrepreneur has attempted to undermine the organization’s operations through various means. The filing, made in a federal district court, follows Musk’s unsuccessful effort to prevent OpenAI from shifting from a nonprofit to a for-profit model last month.
The suit seeks punitive damages for Musk’s actions and requests an injunction to prohibit any further interference in OpenAI’s activities. Musk, who leads companies such as Tesla and SpaceX and owns the social media platform X, also established xAI in 2023 as a competitor to OpenAI.
In its legal documents, OpenAI accused Musk of utilizing a variety of tactics to harm the company, including:
- Launching attacks through the media, targeting his extensive follower base on X,
- Submitting requests for corporate records perceived as unnecessary,
- Engaging in aggressive legal maneuvering, and
- Making a questionable offer to purchase OpenAI’s assets.
OpenAI characterized these efforts as a consistent pattern aimed at damaging its reputation and viability.
While Musk’s legal representative, Marc Toberoff, has not yet responded to inquiries about the lawsuit, the relationship between Musk and OpenAI has been rocky since its inception. Musk was a co-founder of OpenAI in 2015 but parted ways with the organization amid growing concerns over its strategies and its close partnership with Microsoft.
Earlier this year, a Musk-led consortium proposed an acquisition of OpenAI, valuing the organization at approximately $97.4 billion; however, this offer was promptly dismissed. Recently, investors have shown strong support for OpenAI, which is now valued at around $300 billion following a funding round.
The launch of xAI by Musk followed OpenAI’s success with ChatGPT, which debuted in late 2022. OpenAI reported a staggering 500 million weekly users for ChatGPT, projecting revenues nearing $13 billion by 2025.
In the legal complaint, OpenAI stated that Musk has struggled to accept the company’s success, especially after he labeled it as doomed at the time of his exit.
Additionally, Musk announced in March that X had effectively acquired xAI, creating a stock exchange arrangement between the companies.
OpenAI is seeking judicial intervention to curb Musk’s public criticisms of the organization and described his recent actions, including the alleged takeover bid, as attempts to disrupt its trajectory.
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