About ten years ago, Elon Musk was involved in developing the OpenAI startup but left before ChatGPT’s rapid success increased its commercial value. Now, OpenAI’s management believes Musk is actively trying to harm its business while promoting his competing startup, xAI. To counter this, OpenAI has taken legal action against him.
As Bloomberg reports, OpenAI’s lawyers filed the lawsuit this week. The roughly 100-page document details how Musk allegedly uses litigation and media influence to undermine OpenAI. One key example is his February attempt to buy OpenAI for $97.4 billion. The company argues that setting such a price complicated negotiations with real investors, as they might now hesitate or withdraw from funding.
xAI and OpenAI’s Financial Moves
OpenAI sees Musk’s actions as a strategy to create a more favorable market for xAI, the startup he founded in 2023. Recently, xAI formally absorbed the X social network, which Musk had acquired in 2022 for $44 billion. Experts estimate the combined entity’s value to be at least $100 billion.
Meanwhile, OpenAI has been securing significant funding. Last week, it raised $40 billion from the Japanese corporation SoftBank. These funds will support the Stargate project, which aims to develop the American national computing structure. This latest investment raises OpenAI’s estimated valuation to $300 billion.
Upcoming Court Proceedings
OpenAI also accuses Musk of attempting to dissuade investors from supporting the company, adds NIX Solutions. Previously, Musk alleged that OpenAI required investors to agree not to fund competitors, but OpenAI has denied these claims.
The case will proceed with a jury trial, as OpenAI insists. Another court battle is set for next March regarding OpenAI’s restructuring, which Musk aims to block. However, it remains unclear when the hearing on Musk’s alleged persecution of OpenAI will take place. We’ll keep you updated as more details emerge.