In a significant development, U.S. antitrust authorities weighed in on Elon Musk’s lawsuit against OpenAI, offering legal support for his allegations of anticompetitive practices involving the AI company and Microsoft. The Federal Trade Commission (FTC) and the Department of Justice (DOJ) have shared their legal analysis ahead of a crucial hearing in Oakland, California, set for Tuesday. Though the agencies clarified that they are not expressing a direct opinion on the case, their input could influence the court’s view on key elements of Musk’s argument.
Musk, who co-founded OpenAI and currently leads his own AI venture, xAI, accuses OpenAI and Microsoft of engaging in anticompetitive behavior, including stifling competition in the AI sector. Specifically, Musk claims that OpenAI pressured investors to avoid funding competing AI firms and orchestrated a boycott against rival companies. Furthermore, Musk points to the close ties between OpenAI and Microsoft, alleging shared board members and other connections that violate antitrust laws.
In response, OpenAI’s spokesperson dismissed the lawsuit as baseless, claiming it is a form of harassment. However, Musk’s attorney, Marc Toberoff, argued that the involvement of the DOJ and FTC underscores the seriousness with which regulators are scrutinizing the actions of OpenAI and Microsoft.
The FTC is already investigating the broader AI landscape, including examining the relationship between Microsoft and OpenAI for potential violations of antitrust laws. Additionally, the agencies are probing whether OpenAI has breached consumer protection regulations.
OpenAI, for its part, has attempted to dismiss Musk’s claims about shared board memberships, noting that Microsoft’s Reid Hoffman and Deannah Templeton no longer hold positions on OpenAI’s board. However, the DOJ and FTC countered that even after such departures, board members could still possess sensitive competitive information that could influence future actions.
Musk’s allegations suggest that the actions of OpenAI and Microsoft could have long-lasting effects on the AI industry, and the involvement of the federal agencies signals a heightened level of scrutiny on the practices of both companies.
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