Dec 2, 2024 - Business

Elon Musk asks court to stop OpenAI from becoming a for-profit

Dan Primack

Photo illustration of Elon Musk with a 100 dollar bill behind him — Photo illustration: Sarah Grillo/Axios. Photo: Apu Gomes/Getty Images

Elon Musk on Friday filed for a preliminary injunction to stop OpenAI from transitioning into a for-profit entity, arguing that OpenAI might otherwise "lack sufficient funds" were the court to eventually rule in Musk's favor.

Why it matters: OpenAI told investors in its recent $6.6 billion funding round that they could get their money back, upon request, if the structural switch isn't completed within two years.

Zoom in: Plaintiffs include Musk and xAI, while defendants include OpenAI, Sam Altman, Reid Hoffman, and Microsoft.

In a statement, OpenAI called Musk's effort "utterly without merit."

The bottom line: One of Musk's arguments is that OpenAI violated antitrust law by asking its investors to abstain from backing competitors, including xAI. If a court agrees, that could upend an unwritten rule of venture capital.

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Elon Musk asks court to stop OpenAI from becoming a for-profit

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