By Jody Godoy
(Reuters) – U.S. antitrust authorities on Friday ruled on Elon Musk’s lawsuit seeking to block OpenAI from going public, highlighting legal doctrines that support his claim that OpenAI and Microsoft engaged in anti-competitive practices.
The U.S. Federal Trade Commission and Justice Department did not comment on the case, but offered legal analysis on aspects of the case ahead of Tuesday’s hearing in Oakland, California. Musk is the co-founder of OpenAI and the owner of the AI startup xAI.
A Microsoft spokesman declined to comment.
An OpenAI spokesman cited a court document in which the company said the lawsuit lacked evidence and amounted to harassment.
Musk’s attorney, Marc Toberoff, said, “The DOJ and FTC’s involvement is a sign of how seriously regulators are taking the misconduct of OpenAI and Microsoft.”
The FTC is separately investigating artificial intelligence partnerships, including between Microsoft and OpenAI, investigating potential anticompetitive behavior at Microsoft and investigating whether OpenAI violated consumer protection laws.
Musk claims that OpenAI violated antitrust law by forcing investors not to invest in competing AI companies and by sharing board members with Microsoft, which is also a defendant in the suit.
OpenAI said the board members’ claims are moot because Microsoft board member Reid Hoffman, who was on OpenAI’s board, and Microsoft CEO Deannah Templeton, who held an observer seat, are no longer affiliated with it.
But even after they leave boards, directors may still have sensitive information about competitors, the FTC and DOJ said. Board members who only have observer status are not exempt from the law, authorities said in their report.
Musk also claims that OpenAI has enabled a group boycott of investors against its rivals. Such claims are viable even when the boycott organizer is not a member, the FTC and DOJ said.
(Reporting by Jody Godoy in California; Editing by Rod Nickel)
