Elon Musk is again taking legal action against OpenAI, its CEO Sam Altman, and notable figures like tech investor Reid Hoffman and Microsoft (MSFT). This lawsuit aims to prevent the AI firm from becoming a for-profit entity. Musk, his AI startup xAI, and former OpenAI board member Shivon Zilis filed for a preliminary injunction to halt this transition. The injunction also aims to stop OpenAI from allegedly restricting its investors from funding competitors, including Musk’s new AI initiative – xAI.
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Musk’s Accusations
Musk claims that Altman and OpenAI’s President, Greg Brockman, misled him by promising that the company will remain a nonprofit organization dedicated to the greater good. Instead, Musk states in his lawsuit that “they created a web of for-profit affiliates,” with Microsoft playing a significant role.
Musk also claims through his appointed representatives that, “The perfidy and deceit are of Shakespearean proportions.” This sentence alone emphasizes the level of disdain between the two sides
Musk continues to accuse Altman and Brockman of orchestrating a “long con” to tempt him to invest millions, only to find that the promises of a nonprofit company, focused on safety and openness, were just myths.
An Ongoing Feud
This legal action is another level of escalation in the ongoing feud involving Elon Musk and OpenAI. Musk initially filed a lawsuit in March 2024, which he later withdrew and refiled in federal court, broadening the allegations to include claims of antitrust violations. His attorneys argue that OpenAI’s partnership with Microsoft, which has invested nearly $14 billion, has created an unfair competitive environment, aiming to stifle rival companies, including Musk’s own xAI.
OpenAI, originally a nonprofit, shifted to a capped-profit model in 2019 and is now transitioning to a fully for-profit public corporation. This restructuring targets additional investors while maintaining a separate nonprofit entity.
Despite Microsoft’s significant investment, it reported a $1.5 billion loss from OpenAI in its recent earnings. The AI market is projected to reach $1 trillion in revenue within a decade, with business spending on AI surging 500% this year.
Price Target for TSLA
On Wall Street, TSLA stock is a Hold based on 11 Buys, 14 Holds, and nine Sells. The average price target for TSLA is $233.67, reflecting a downside of 32.30%
