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Elon Musk asks court to stop OpenAI from dropping nonprofit status

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In a motion filed Friday, Musk's lawyers asked Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California to issue an injunction against OpenAI, preventing it from completing its transition from a nonprofit to a for-profit company.

The request also argues that OpenAI has engaged in anticompetitive behavior by discouraging investors from partnering with its competitors, such as Musk's company xAI, and has benefited from "wrongfully obtained competitively sensitive information" through its ties with Microsoft.

Reid Hoffman, the cofounder of LinkedIn, previously served on the boards of OpenAI and Microsoft simultaneously. Musk's lawyers write that Hoffman's role in both companies, which they describe as "the Microsoft-OpenAI board interlocks," resulted in information being wrongfully shared between the companies and monopolistic market practices. Musk's lawyers say the partnership amounted to violations of antitrust law.

"It would be one thing if Microsoft were, once again, engaging in anticompetitive conduct, this time with OpenAI. It would be another if OpenAI, aided and abetted by Microsoft, were violating the terms of Musk's foundational contributions to the charity," the filing reads, referring to OpenAI as a charity due to its founding as a nonprofit organization. "But OpenAI and Microsoft together exploiting Musk's donations so they can build a for-profit monopoly, one now specifically targeting xAI, is just too much. Plaintiffs and the public need a pause."

If granted, the request for an injunction would stall OpenAI's for-profit transition and force the company to halt its partnerships with Microsoft.

Lawyers for Microsoft, Hoffman, and Musk did not immediately respond to requests for comment from Business Insider.