U.S. antitrust regulators offered legal insights on Friday regarding Elon Musk’s lawsuit challenging OpenAI’s transition to a public company, citing potential anticompetitive practices involving OpenAI and Microsoft.
The Federal Trade Commission (FTC) and Department of Justice (DOJ) provided legal analysis ahead of a Tuesday hearing in Oakland, California, without explicitly taking sides in the case.
Musk, who co-founded OpenAI and owns AI startup xAI, alleges that OpenAI violated antitrust laws by compelling investors to avoid funding rival AI firms and by sharing board members with Microsoft, also named in the lawsuit. OpenAI has dismissed the claims as baseless, arguing they lack evidence and amount to harassment.
The FTC is separately investigating Microsoft and OpenAI over potential anticompetitive practices and whether OpenAI violated consumer protection laws. Musk’s lawyer, Marc Toberoff, said the DOJ and FTC’s involvement highlights regulators’ concern over the alleged misconduct.
OpenAI contends the board member issue is moot, as former Microsoft board member Reid Hoffman and executive Deannah Templeton are no longer associated with OpenAI. However, the FTC and DOJ noted that directors can retain sensitive competitive information even after stepping down and emphasized that observer board members are also subject to antitrust laws.
Musk also accuses OpenAI of organizing a group boycott against rival AI firms, a claim the FTC and DOJ described as legally viable, even if the organizer is not a direct participant. The outcome of the case could have significant implications for the competitive landscape of the AI industry.
