Musk Gains Antitrust Watchdog Support in OpenAI Battle
Elon Musk has reportedly gained government support in his legal battle against OpenAI.
While not offering an opinion in the case, the Federal Trade Commission (FTC) and Department of Justice (DOJ) pointed to legal doctrines supporting Musk’s argument that OpenAI and partner/patron Microsoft engaged in anticompetitive behavior, Reuters reported Friday (Jan. 10).
Musk, one of OpenAI’s co-founders, is suing to prevent the startup’s switch to a public company, and also maintains that OpenAI and Microsoft — also a defendant — colluded to hinder competition in the artificial intelligence (AI) space. Musk heads the AI firm xAI.
An OpenAI spokesperson pointed Reuters to the argument the company has made before: that Musk’s suit is without evidence and is essentially harassment.
Marc Toberoff, Musk’s attorney, said, “the participation of the DOJ and FTC is a sign of how seriously regulators take OpenAI and Microsoft’s misconduct.”
The FTC has been examining AI partnerships, including the one between OpenAI and Microsoft, while also probing anticompetitive conduct by Microsoft and investigating whether OpenAI violated consumer protection laws.
Musk alleges OpenAI breached antitrust law by forcing investors to agree not to invest in rival AI companies, and by sharing board members with Microsoft.
OpenAI contends the board member claims are moot, as Microsoft board member Reid Hoffman, who was on OpenAI’s board, and Microsoft executive Deannah Templeton, who had an observer seat, are no longer connected with it.
All the same, those directors could still have sensitive competitive information, the FTC and DOJ argued in the recent court filing, saying that board members who only have observer status are not exempt from the law.
Another of Musk’s claims is that OpenAI fomented a group investor boycott against its rivals. These claims hold water even when the organizer of the boycott is not a member, the FTC and DOJ argued.
In other AI news, PYMNTS took a closer look at the sector last week in the wake of Anthropic’s targeted $60 billion valuation.
“From automating routine tasks to enhancing decision-making through predictive analytics, the demand for enterprise AI solutions is skyrocketing,” that report said.
“However, corporate buyers are discerning, prioritizing factors such as integration capabilities, data security, and the ability to customize models to fit their unique needs. These priorities are shaping the AI market.”
At a time when tech stacks are becoming more complex, seamless integration is a key priority for enterprise buyers, that report added. Research by PYMNTS Intelligence has shown that 75% of CFOs plan to increase their AI investment.
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