OpenAI has filed a counter-lawsuit against billionaire Elon Musk, asking the courts to stop him from further “harassment” and “unfair action” against the company including a sham takeover bid.

The AI startup, which Musk co-founded together with its CEO Sam Altman publicly declared its counter-lawsuit against the entrepreneur on X, which also seeks to bar him from spreading false news about OpenAI.

OpenAI says Musk spreads falsehoods about the company

In practice, OpenAI accuses Elon Musk of having spread false information about the company and of continuously acting in bad faith, just to take control of AI innovations for his personal advantage.

“Elon’s nonstop actions against us are just bad faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit.”

~ OpenAI

Specifically, OpenAI refers to the new non-profit organization that it is building, in which Musk has never participated in the mission.

The tech company, on Wednesday, asked a federal judge to stop Musk from any “further unlawful and unfair action” against OpenAI in a court case over the future structure of the firm. OpenAI has been instrumental in driving generative AI developments following the launch of its ChatGPT to immediate success in November 2022.

Musk and OpenAI CEO Sam Altman co-founded OpenAI in 2015, but the billionaire left before the company became a technology giant. However, Musk has tried to prevent OpenAI from transitioning to a for-profit model, resulting in the current court battle.

OpenAI must complete its transition by year-end for it to secure the entire $40 billion of its current fundraising round.

“Through press attacks, malicious campaigns broadcast to Musk’s more than 200 million followers on the social media platform he controls, a pretextual demans for corporate records, harassing legal claims and a sham bid for OpenAI’s assets, Musk has tried every tool available to harm OpenAI,” the company wrote in a filing in Musk’s existing lawsuit against OpenAI in the US District Court for the Northern District of California.

Musk wants to slow his competition, according to Altman

In March, Reuters reported that a US judge denied the billionaire his request for a preliminary injunction to pause OpenAI’s transition to a for-profit model but agreed to a fast-track trial in the fall of this year. However, this was changed as the court said, the jury trial will begin in spring next year.

The US District Judge Yvonne Gonzalez Rogers in Oakland, California said, “Musk does not have the high burden required for a preliminary injunction to block the conversion of OpenAI.”

The judgment and counter-lawsuit come weeks after Altman and the OpenAI board rejected a $97.4 billion unsolicited takeover bid from a Musk-led consortium with a “no thank you.” Altman, who has said OpenAI is not for sale alleges that Musk has been trying to slow down a competitor.

SoftBank Group is in talks to lead a funding round of up to $40 billion in OpenAI at a valuation of $300 billion, according to reports made in January. That would dwarf the $75 billion valuation xAI discussed in a recent fundraise.

“Had OpenAI’s board genuinely considered the bid as they were obligated to do, they would have seen how serious it was. It is telling that having to pay fair market value for OpenAI’s assets allegedly ‘interferes’ with their business plans,” Musk’s lawyer Marc Toberoff said in a statement.

At the beginning of April, OpenAI’s GPT-4o was put under investigation, accused of recognizing and using copyright protected content, originating from confidential material of the publisher O’Reilly Media.

In practice, the investigation conducted by the AI Disclosures Project would have involved several LLM language models in the technique of the DE-COP membership inference attack. Hence, they discovered that GPT-4o achieved an 82% score in the ability to recognize non-public content sourced from O’Reilly Media.

This data highlights the strong probability that these inaccessible contents have instead been included in the training data of OpenAI’s LLM.

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