 "US DoJ & FTC back Elon Musk's charge against OpenAI's Microsoft partnership, for-profit transition")
The US Department of Justice (DoJ) and the Federal Trade Commission (FTC) have thrown their weight behind a key argument in Elon Musk’s lawsuit against OpenAI and Microsoft. Musk has alleged that the partnership between the AI powerhouse and the tech giant violated antitrust laws, specifically pointing to overlapping board memberships that could harm competition.
In a filing submitted on Friday, the agencies highlighted that board overlap, even after a member steps down, can negatively impact competition. They didn’t outright take a stance on whether OpenAI should be allowed to restructure, but their remarks lend partial support to Musk’s claims. This legal clash centres around Musk’s push to block OpenAI from pursuing what he calls an “illegal” transition to a for-profit enterprise.
Allegations of board overlap and antitrust concerns
Musk’s lawsuit argues that Reid Hoffman, LinkedIn cofounder, sat on the boards of both OpenAI and Microsoft from 2017 to 2023, creating a potential conflict of interest. Deannah Templeton, who held executive roles at Microsoft while also being a non-voting OpenAI board member for a brief period in 2023, was also mentioned in the suit. Musk claims these dual roles gave Microsoft undue influence over OpenAI.
The DoJ and FTC backed this part of Musk’s argument, stating that even when someone resigns, the potential for competition to be stifled doesn’t necessarily disappear. They cited a “heavy burden” on defendants to prove that such overlaps won’t lead to future issues.
FTC’s watchful eye on OpenAI
The FTC has been keeping tabs on OpenAI for a while, with investigations probing its practices and partnerships. A study into AI investments by major tech players like Microsoft is expected soon. On a separate note, the FTC has also been examining whether OpenAI misled consumers about its offerings and whether its board arrangements crossed legal boundaries.
Hoffman, whose board involvement has been a sticking point, has publicly criticised FTC Chair Lina Khan, even calling for her removal. Musk’s revived lawsuit in August has intensified the scrutiny on OpenAI, reigniting debates about whether the organisation has drifted from its original nonprofit mission.
Musk’s battle to protect OpenAI’s original vision
Musk was a co-founder at OpenAI, and invested in the AI company with the goal of developing AI that benefits society. However, he left the organisation in 2018 and has since been a vocal critic, especially after OpenAI transitioned into a for-profit entity with Microsoft’s multi-billion-dollar backing. Musk argues this shift betrays OpenAI’s founding principles and gives the tech giant disproportionate control.
Musk has warned that without immediate legal intervention, OpenAI, under CEO Sam Altman, will become an unstoppable force, stifling competition. OpenAI, for its part, has dismissed Musk’s claims as unfounded and noted that he once supported its move toward a traditional corporate structure.
As the court hearing approaches, this clash between Musk and OpenAI continues to draw significant attention, not just for its legal implications but for its potential impact on the rapidly evolving AI industry.
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