Elon Musk Adds Microsoft to Lawsuit Against OpenAI

Elon Musk’s legal battle against OpenAI has taken a dramatic turn. Initially withdrawn in July, the lawsuit was reintroduced in August with new allegations, defendants, and plaintiffs.

What began as a dispute over OpenAI’s shift from a nonprofit to a profit-driven entity has grown into a much larger battle, pulling in key players like Microsoft and LinkedIn co-founder Reid Hoffman.

Now, Musk is raising serious concerns about antitrust violations, conflicts of interest, and business practices he claims are unfair. The amended complaint highlights the complex relationships between some of the most powerful tech companies and their executives.

New Players Enter the Scene

The updated lawsuit now includes new defendants: Microsoft, Reid Hoffman, and Dee Templeton, a former OpenAI board member. Elon Musk’s own AI company, xAI, and Neuralink executive Shivon Zilis, who once served on OpenAI’s board, have joined as plaintiffs.

Elon Musk argues that OpenAI has strayed far from its original mission. Founded in 2015 as a nonprofit designed to ensure AI benefits humanity, OpenAI is now accused of leveraging partnerships with Microsoft to gain a competitive edge.

Allegations of Unfair Practices

In the federal court filing in Oakland, California, Musk’s legal team accuses OpenAI of unfair business practices. Specifically, the lawsuit claims:

• Unfair Advantages for OpenAI: Microsoft’s significant investment in OpenAI allegedly provides preferential access to infrastructure and expertise. Musk’s lawyers argue this creates a “de facto merger” between the two companies.
• Exclusionary Tactics: The complaint claims OpenAI pressures investors to avoid funding competitors like xAI.
• Conflicts of Interest: Reid Hoffman’s involvement with Microsoft, OpenAI, and Greylock (an investment firm) allegedly gave him access to sensitive business information, providing him with an unfair advantage.
• Boardroom Conflicts: Dee Templeton, who briefly served as a non-voting observer on OpenAI’s board, is accused of helping facilitate agreements that violate antitrust laws.

Zilis Takes the Stand

Shivon Zilis, a former OpenAI board member and current Neuralink executive, plays a central role in the case. Zilis, who has close ties to Elon Musk, raised concerns about OpenAI’s business practices during her time there. The lawsuit claims her warnings went unheeded.

Zilis’s status as an “injured employee” under California law strengthens the case, especially since her concerns mirror Musk’s broader criticisms of OpenAI’s strategic direction.

Elon Musk’s Frustration with OpenAI’s Shift

Musk’s dissatisfaction with OpenAI’s transformation is not new. He left the organization in 2018 due to disagreements over its direction. The lawsuit argues that OpenAI has abandoned its nonprofit roots, now prioritizing profit over transparency and safety.

Elon Musk claims this shift undermines the principles OpenAI was founded on. He believes the organization has effectively become a profit-driven subsidiary of Microsoft.

Cryptocurrency Controversy

One of the most eye-catching elements of the complaint involves a 2018 proposal by OpenAI CEO, Sam Altman, to launch a cryptocurrency through an Initial Coin Offering (ICO). Musk strongly opposed the idea, fearing it would damage OpenAI’s credibility. Emails submitted as evidence reveal Musk’s outright rejection of the proposal, adding further tension to the ongoing dispute.

What’s Next?

This lawsuit highlights the challenges of balancing innovation and accountability in the fast-evolving tech world. With accusations ranging from antitrust violations to ethical breaches, the case could set crucial precedents for corporate governance in AI.

The Bigger Picture: A Battle for the Future?

Elon Musk’s lawsuit isn’t just a personal dispute. It’s a deeper examination of the relationships between powerful tech companies. With OpenAI, Microsoft, and key figures like Hoffman and Templeton at the center, this case raises important questions about transparency, competition, and ethics in AI development. As the legal battle continues, it’s clear that the outcome won’t just impact OpenAI, it will shape the future of AI development and who gets to control it.