By Jody Godoy (Reuters) – The U.S. Federal Trade Commission commented on Friday regarding Elon Musk’s lawsuit aimed at preventing OpenAI’s transition to a public company, highlighting legal principles that could back his assertion of anticompetitive behavior on the part of OpenAI and Microsoft. While not explicitly siding with either party, the FTC provided legal insight that may bolster Musk’s case at an upcoming hearing in Oakland, California. Musk, a co-founder of OpenAI and owner of AI startup xAI, stands at the center of this legal confrontation.
A Microsoft spokesperson chose not to offer a statement, while an OpenAI representative did not immediately respond to a request for comment. Concurrently, the FTC is examining AI partnerships, particularly those involving Microsoft and OpenAI, to investigate potential anticompetitive practices at Microsoft and scrutinize whether OpenAI breached consumer protection regulations.
Musk’s contention asserts that OpenAI breached antitrust regulations by compelling investors to abstain from investing in competing artificial intelligence firms and by sharing board members with Microsoft, a co-defendant in the lawsuit. OpenAI contends that the claims regarding board members are irrelevant as Reid Hoffman, a Microsoft board member who previously served on OpenAI’s board, and Deannah Templeton, a Microsoft executive with an observer role, have severed their ties with the organization. However, the FTC noted that even post-departure, board members may retain sensitive competitive information. The agency emphasized that individuals with observer status on boards are not exempt from legal obligations, as stated in its brief.
Further allegations by Musk include OpenAI orchestrating an investor boycott against its competitors. The FTC underscored that such claims remain valid even when the instigator of the boycott is not a direct participant. The legal intricacies of this case are set to unfold in Oakland, California, with Musk’s contentions at the forefront.
(Reporting by Jody Godoy in California; Editing by Rod Nickel)
