U.S. antitrust regulators offered legal insights into Elon Musk’s lawsuit to block OpenAI’s shift to a public company, citing doctrines supporting his allegations of anticompetitive behavior by OpenAI and Microsoft.
While the Federal Trade Commission (FTC) and Department of Justice (DOJ) did not express opinions on the case, they highlighted critical legal points ahead of a Tuesday hearing in Oakland, California. Musk, who co-founded OpenAI and owns AI startup xAI, claims OpenAI violated antitrust laws by restricting investors from funding rival AI firms and sharing board members with Microsoft.
Microsoft declined to comment, while OpenAI called the lawsuit baseless, accusing Musk of harassment. Musk’s attorney, Marc Toberoff, viewed the FTC and DOJ’s involvement as a sign of serious regulatory scrutiny.
The FTC is separately investigating AI partnerships, including potential anticompetitive conduct between Microsoft and OpenAI, as well as possible consumer protection violations by OpenAI.
OpenAI argued that claims regarding shared board members are irrelevant since Microsoft’s Reid Hoffman and Deannah Templeton no longer serve on its board. However, the FTC and DOJ countered that departing board members can still possess sensitive competitive information, and even board observers are not exempt from legal scrutiny.
Musk further alleged that OpenAI facilitated a coordinated investor boycott against its competitors. The FTC and DOJ noted that such claims remain valid even if the boycott organizer is not a participant.
This case highlights the mounting regulatory focus on AI collaborations and potential antitrust violations in the sector.
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