Musk names Microsoft as defendant in amended lawsuit against OpenAI

The US government efficiency czar Elon Musk, in his lawsuit against Sam Altman-run OpenAI for abandoning its non-profit stance, has now named new defendants including Microsoft, LinkedIn co-founder Reid Hoffman, and former OpenAI board member and senior Microsoft executive, Dee Templeton.

The amended complaint, filed in a district court in California, also names new plaintiffs — Neuralink executive and ex-OpenAI board member Shivon Zilis and Musk’s AI company, xAI.

“OpenAI, co-founded by Musk as an independent charity committed to safety and transparency — and nurtured in its infancy by Musk’s money, advice, recruiting efforts and connections — is, at the direction of Altman, Brockman, and Microsoft, fast becoming a fully for-profit subsidiary of Microsoft,” the lawsuit read.

Musk’s lawyers argued that OpenAI is “actively trying to eliminate competitors” such as xAI by “extracting promises from investors not to fund them.”

The lawsuit further alleged that “never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralysing gorgon — and in just eight years”.

“Never before has it happened, because doing so violates almost every principle of law governing economic activity. It requires lying to donors, lying to members, lying to markets, lying to regulators, and lying to the public,” it read.

According to the amended complaint, Zilis, who stepped down from OpenAI’s board in 2023, has standing as an “injured employee” under California Corporations Code. Zilis has close ties to Musk, having worked as a project director at Tesla from 2017 to 2019 in addition to directing Neuralink research.

The lawsuit further alleged that the efforts by Altman and his cohorts to cash in and squeeze others out have their roots in OpenAI’s partnership with Microsoft.

“Together, they established an opaque web of for-profit OpenAI affiliates, the only value of which came from looting OpenAI, Inc. of the intellectual property, employees, and relationships developed by exploiting Musk’s name and contributions, the charity’s tax status, and the goodwill generated by its supposed philanthropic commitment,” alleged the Musk lawsuit.

While the tech billionaire had expressed an affinity for Microsoft’s CEO Satya Nadella, “the values of Microsoft and OpenAI did not align”.

Whereas Musk was concerned that AI posed an existential danger to humankind and believed the technology should be decentralised and open, “Nadella and Microsoft’s co-founder Bill Gates minimised Musk’s concerns as ‘panic’ and too far off in the future,” the lawsuit said.

Microsoft was yet to comment on the amended lawsuit.