Elon Musk's lawsuit against OpenAI, which had dinged the company for abandoning its nonprofit mission, was dismissed in July, then refiled in August. This week, in an amended complaint, it added new defendants: to that list Microsoft, LinkedIn co-founder Reid Hoffman, and former OpenAI board member and Microsoft VP Dee Templeton.
The new plaintiffs added in the amended filing are Neuralink exec and ex-OpenAI board member Shivon Zilis, and Musk's AI company xAI. 

Elon Musk was one of the founders of OpenAI; its original intention was to do research, and build good AI for people, and this was started as a non-profit. He left the company in 2018 due to disagreements about the direction the company was headed.

Musk has alleged in previous lawsuits that he was defrauded out of more than $44 million he claims to have invested in OpenAI as a result of preying on his "well-known concerns about the existential harms" of the technology. He claims OpenAI co-founder and CEO Sam Altman engaged in "rampant self-dealing" between OpenAI and other companies with which Altman is involved—to the personal enrichment of Altman.

In a complaint filed Monday, Musk lawyers said OpenAI is "now actively trying to eliminate competitors" such as xAI by "extracting promises from investors not to fund them." It's also allegedly unfairly benefiting from Microsoft's infrastructure and expertise in what Musk's counsel describes in the filing as a "de facto merger.".

The complaint reads: "xAI has been harmed, among other things … by an inability to obtain compute from Microsoft on terms anywhere near as favorable as OpenAI receives … and the exclusive exchange between OpenAI and Microsoft of competitively sensitive information," filed late Thursday in Oakland, California's federal court.

Microsoft, which first took an investment stake in OpenAI in 2019, significantly accelerated the partnership last year, investing $13 billion for what amounts to a roughly 49% interest in OpenAI's net earnings. In addition to financial support, OpenAI also heavily uses Microsoft cloud hardware resources to train, fine-tune, and run AI models such as those that underpin ChatGPT.

Hoffman — a partner at investment firm Greylock, as well as a member of the boards of Microsoft and OpenAI — enjoyed a privileged, and illicit, view into the companies' dealings. (He resigned from OpenAI's board in 2023.) Musk's counsel notes that Greylock invested in Inflection, the AI startup that Microsoft acqui-hired earlier this year — and might be considered an OpenAI competitor, the complaint argues.

The amended filing says as for Templeton, whom Microsoft briefly appointed as a nonvoting board observer at OpenAI, she was in a position to facilitate agreements between Microsoft and OpenAI that would violate antitrust rules.

As the complaint points out, the prohibition on interlocking directorates is put in place to avoid the exchange of competitively sensitive information that violates the antitrust laws and/or serve as a forum for the coordination of other anticompetitive activity. "By allowing Templeton and Hoffman to serve as members of OpenAI's … board, this purpose was undermined," the complaint reads.

The complaint suit further argues that OpenAI, holding about 70% of the generative AI market, "constitute[s] a monopoly," or at least an attempt to monopolize the market.

Along with Microsoft and Hoffman and Templeton, California attorney general Rob Bonta is the other defendant cited in Musk's complaint. Bloomberg reported this month that OpenAI is talking to Bonta's office over the procedure for changing its corporate structure.

Under the amended complaint, Zilis has standing as an "injured employee" under California Corporations Code because she resigned from OpenAI's board in 2023 after having served for about four years. Zilis repeatedly expressed her objections within OpenAI about the dealmaking going on around her that went unheeded — objections substantially similar to Musk's, the complaint alleges.

Zilis is closely associated with Musk, having served as a project director at Tesla from 2017 to 2019 and also overseeing the research at Neuralink. Neuralink is Musk's venture on developing a brain-computer interface. She is also the mother of three of Musk's children namely Techno Mechanicus and twins Strider and Azure.

The updated complaint, which is 107 pages in length, says a curious thing: In January 2018, Altman floated a selling one's own cryptocurrency made by OpenAI before eventually settling on a capped-profit structure.

There were a lot of concerns about the ICO, possible unintended effects in the future, Altman wrote in an email to Musk on January 21, 2018, an exhibit filed with the amended complaint shows. An ICO, or initial coin offering, is an unregulated means by which funds are raised for cryptocurrency businesses. I would say: "Going to make it very clear that we need to keep this confidential, but I really do think that the key here, you know, is to get buy-in and give people an opportunity to speak their minds early."

Musk supposedly shot down the crypto sale idea. "I have considered the ICO approach and will not support it," he wrote in an email reply (exhibit) to Altman and OpenAI co-founders Greg Brockman-nowOpenAI's president-and Ilya Sutskever-also ex-chief scientist of OpenAI. "In my opinion, that would simply result in a massive loss of credibility for OpenAI and everyone associated with the ICO.".

Neither is it on the plaintiffs' side: what OpenAI made money off of was Musk's early investment in the firm for which it now goes back on its promise to make the fruits of its AI research available to all. "No amount of clever drafting nor surfeit of creative dealmaking can obscure what is happening here," reads the complaint. "OpenAI, Inc., co-founded by Musk as an independent charity committed to safety and transparency … [is] fast becoming a full for-profit subsidiary of Microsoft.".