OpenAI Faces Legal Action as xAI Alleges Funding Obstruction

Lawyers for xAI, an AI startup founded by billionaire Elon Musk, filed an injunction saying that OpenAI is stopping its investors from giving money to competitors.

According to a financial news site, lawyers for the billionaire and his AI startup, xAI, filed the injunction on Friday. The injunction also states that OpenAI should not allegedly prevent its investors from contributing financially to competing businesses.

The move is the latest in a business feud between Musk and OpenAI. Musk helped form the group in 2015, but he has since left. In the past few years, OpenAI has become a big name in the growing field of artificial intelligence.

Musk says that OpenAI doesn’t let its investors invest in competitors, which would hurt his startup in a field where billions of dollars are at stake. The business OpenAI used to be a non-profit, but now it is a “capped” for-profit one.

Musk Criticizes OpenAI’s Shift to For-Profit Model

It is attempting to transform into a for-profit public benefit corporation to increase its revenue. After he quit in 2018, Musk said he didn’t like how the company was moving toward making money under CEO Sam Altman’s leadership.

In March, he sued the company, saying it had lost sight of its original non-profit goal to make AI research open to everyone. OpenAI asserts that Musk’s lawsuit and support for open-source AI development stem from his anger about leaving the company.