Elon Musk asks US court to stop ChatGPT maker OpenAI's transition to for-profit. Here's why

Tesla CEO Elon Musk has sought a federal court injunction to prevent OpenAI from transitioning into a fully for-profit business, escalating his legal battle with the AI giant he co-founded.

Attorneys representing Musk, his AI startup xAI, and former OpenAI board member Shivon Zilis filed a motion on Friday for a preliminary injunction to halt OpenAI’s alleged practices of restricting investors from backing competitors, including xAI, and benefiting from “wrongfully obtained competitively sensitive information.”

The filings mark the latest chapter in Musk’s intensifying feud with OpenAI, its CEO Sam Altman, and high-profile backers such as Microsoft and venture capitalist Reid Hoffman. Musk's team claims OpenAI's dealings with Microsoft involve unlawful monopolistic practices.

“Elon’s fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit,” an OpenAI spokesperson said in a statement.

Musk originally sued OpenAI in March 2024 in a San Francisco state court but refiled the complaint in federal court in Oakland, California, months later. His amended lawsuit accuses OpenAI and Microsoft of violating antitrust and federal racketeering (RICO) laws, alleging their exclusive licensing agreements amount to an unapproved merger.

“Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon — and in just eight years,” the complaint stated, demanding OpenAI’s license with Microsoft be voided and “ill-gotten” profits divested.

The lawsuit further alleges OpenAI coerced investors into non-compete agreements, effectively sidelining rivals like xAI in the race to dominate the generative AI market.

OpenAI dismissed the claims, calling the lawsuit “even more baseless and overreaching than the previous ones.”

Musk’s attorneys, led by Marc Toberoff, contend that OpenAI's practices violate competitive fairness. “Microsoft’s anticompetitive practices have escalated,” Toberoff said, adding, “Sunlight is the best disinfectant.”