US antitrust regulators have reportedly supported aspects of Elon Musk’s arguments in a legal challenge to OpenAI’s reorganization as a commercial entity. According to Bloomberg, court filings by the Justice Department and the Federal Trade Commission (FTC) emphasized that overlapping board members can hurt competition even after a director resigns. This position is consistent with Musk’s lawsuit accusing OpenAI and Microsoft of antitrust violations. The complaint alleges that LinkedIn co-founder Reid Hoffman served on both companies’ boards from 2017 to 2023, and that Deanna Templeton served briefly as a Microsoft executive and non-voting member of the OpenAI board. It points out that it did.
According to the report, authorities said that companies that have ceased potentially illegal conduct still have a “heavy burden” to prove that the conduct will not recur. While the agencies did not take a stance on the legality of OpenAI’s reorganization itself, their filings supported Musk’s claims about the potential harms of overlapping board positions.
The filing comes in response to Musk’s recent request in federal court to block the company from pursuing what he called an “unlawful” transformation into a for-profit company. A public hearing on the request is scheduled for January 14th.
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The legal action comes years after Musk co-founded OpenAI as a non-profit focused on developing AI for social benefit, and continues an ongoing relationship between Musk and OpenAI CEO Sam Altman. It is part of a conflict.
The FTC has criticized OpenAI on multiple fronts, including AI investments by Microsoft and other tech companies, OpenAI’s potentially misleading consumer practices, and a soon-to-be-released investigation into board overlap involving Mr. Hoffman. We are investigating. Mr. Hoffman publicly criticized FTC Chair Lina Khan and called for her firing.
Musk initially sued OpenAI in state court, but later dropped the lawsuit and refiled it in federal court. He claims that OpenAI violated its original nonprofit mission by accepting billions of dollars in funding from Microsoft starting in 2019, and calls for immediate court intervention to prevent OpenAI from dominating the AI market. It is claimed that.
OpenAI declined to comment on the latest filing, but has previously defended the legality of Hoffman and Templeton’s board positions, saying Musk had initially supported the company’s more traditional corporate structure. His lawsuit has been dismissed as baseless.
