Elon Musk Seeks To Block OpenAI’s Shift To For-Profit Status

Elon Musk filed an injunction against OpenAI and Microsoft, alleging anticompetitive practices, harming xAI, and abandoning OpenAI’s nonprofit mission. OpenAI denies claims.

Elon Musk is urging the court to halt OpenAI’s transition from a nonprofit to a for-profit entity, accusing the organization of anticompetitive practices and breaches of its original mission, as first reported by TechCrunch.

In a motion filed Friday, Musk’s legal team requested an injunction from Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California. The injunction would not only block OpenAI’s structural shift but also suspend its partnerships with Microsoft.

Originally launched in 2015 as a nonprofit, OpenAI transitioned in 2019 to a “capped-profit” model and is reportedly shifting toward a fully for-profit structure.

Musk alleges OpenAI discouraged investors from supporting competitors like his company xAI and gained access to sensitive information through ties with Microsoft.

Central to the filing are claims of improper conduct by Reid Hoffman, LinkedIn cofounder and former board member of both OpenAI and Microsoft. Musk’s lawyers argue these connections facilitated monopolistic practices and violated antitrust laws, says TechCrunch.

The motion contends that OpenAI has veered from its original nonprofit mission and could cause “irreparable harm” without court intervention. “An injunction to preserve what is left of OpenAI’s nonprofit character, free from self-dealing, is the only appropriate remedy,” Musk’s counsel stated, as reported by TechCrunch.

The motion also criticizes OpenAI for abandoning its founding principles. Musk invested $45–$50 million in OpenAI when it was established as a nonprofit in 2015, alongside figures like Hoffman, Sam Altman, and Peter Thiel, says TechCrunch

However, OpenAI announced plans in September to restructure as a for-profit entity, a move Musk describes as betraying its charitable roots. His filing claims OpenAI is leveraging Musk’s foundational contributions to create a for-profit monopoly targeting competitors like xAI.

This legal battle reignites tensions between Musk and OpenAI CEO Sam Altman, who have clashed publicly over the company’s direction and AI development. Altman denies Musk’s claims, while a spokesperson for OpenAI dismissed the lawsuit as “baseless,” as reported by TechCrunch.

The court’s decision on the injunction could have significant implications for the AI sector, particularly regarding the balance between competition and collaboration among leading players.