Musk’s amended lawsuit naming Microsoft as defendant
In an amended complaint, the suit names new defendants including Microsoft, LinkedIn co-founder Reid Hoffman and former OpenAI board member and Microsoft VP Dee Templeton. Now, in an amended complaint, the suit names new defendants including Microsoft, LinkedIn co-founder Reid Hoffman, and former OpenAI board member and Microsoft VP Dee Templeton.
The amended filing also adds new plaintiffs: Neuralink exec and ex-OpenAI board member Shivon Zilis and Musk’s AI company, xAI.
Musk was one of the original founders of OpenAI, which was meant to research and develop AI for the benefit of humanity, and was established as a non-profit originally. He left the company in 2018 after disagreements about its direction.
In the complaint, lawyers for Musk argue that OpenAI is now “actively trying to eliminate competitors” such as xAI by “extracting promises from investors not to fund them.” It’s also allegedly unfairly benefitting from Microsoft’s infrastructure and expertise in what Musk’s counsel describes in the filing as a “de facto merger.”
“xAI has been harmed by, without limitation … an inability to obtain compute from Microsoft on terms anywhere near as favorable as OpenAI receives … and the exclusive exchange between OpenAI and Microsoft of competitively sensitive information,” reads the complaint, filed late Thursday in federal court in Oakland, California.
Hoffman’s position on the boards of both Microsoft and OpenAI while also a partner at Greylock, the investment firm, gave Hoffman a privileged — and illicit — view into the companies’ dealings, the complaint alleges. Hoffman stepped down as OpenAI’s director in 2023. The amended filing alleges that Templeton, whom Microsoft briefly appointed as a non-voting board observer at OpenAI, was in a position to facilitate agreements between Microsoft and OpenAI that would violate antitrust rules. The amended filing claims that Templeton was in a good position to facilitate agreements that would violate antitrust regulations between Microsoft and OpenAI. She had been appointed by Microsoft as a nonvoting board member at OpenAI for a short time. The complaint states that the prohibition on interlocking directorates is to prevent sharing of competitively sensitive information in violation of antitrust laws and/or providing a forum for coordination of other anticompetitive activity. This purpose was undermined by allowing Templeton and Hoffman to serve as members of OpenAI’s…. Musk has named California Attorney General Rob Bonta as a defendant, along with Microsoft, Hoffman and Templeton. Bloomberg reported this month that OpenAI is in talks with Bonta’s office over the process to change its corporate structure.
Per the amended complaint, Zilis, who stepped down from OpenAI’s board in 2023 after serving as a member for roughly four years, has standing as an “injured employee” under California Corporations Code. Zilis repeatedly raised concerns over OpenAI’s dealmaking internally that fell on deaf ears — concerns substantially similar to Musk’s, according to the complaint.
Zilis has close ties to Musk, having worked as a project director at Tesla from 2017 to 2019 in addition to directing Neuralink research. Musk’s brain computer interface company, Neuralink, is her mother. The 107-page, amended complaint contains the unusual detail that OpenAI’s CEO Sam Altman suggested that OpenAI sell cryptocurrency in January 2018 before it decided to switch to a capped profit structure. Altman, in an email sent to Musk on January 21, 2018, wrote: “Heads Up! Speak to some of our safety team. There were a lot concerns about the ICO. And there could be unintended consequences in the future.” Initial coin offerings, also known as ICOs, are an unregulated way to raise funds for cryptocurrency businesses. “Going to emphasize the need to keep this confidential, but I think it’s really important we get buy-in and give people the chance to weigh in early.”
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Toberoff & Associates
Musk supposedly shot down the crypto sale idea. He wrote: “I’ve considered the ICO and will not be supporting it” in an email to Altman, OpenAI cofounders Greg Brockman and Ilya Sukseker (now OpenAI president), and shows an exhibit. In my opinion, this would result in a massive reduction in credibility for OpenAI as well as everyone involved with the ICO.”
The plaintiffs’ lawsuit is still the same: OpenAI profited early on from Musk’s involvement in the business and then reneged on their nonprofit promise to make AI research accessible to all. The complaint states that “no amount of clever writing or excess of creative dealmaking will be able to obscure what’s happening.” “OpenAI, Inc., co-founded by Musk as an independent charity committed to safety and transparency …
fast becoming a full for-profit subsidiary of Microsoft.”
OpenAI has sought to dismiss Musk’s lawsuit, calling it “blusterous” and baseless.
