OpenAI dismisses Elon Musk’s lawsuit as “harassment tactic”

Artificial intelligence company OpenAI has pushed back at xAI CEO Musk’s recent lawsuit, calling it part of an “ongoing harassment campaign” to undermine its operations. 

The ChatGPT maker released a statement with emails, X posts, court filings, and opinionated articles to shun Elon Musk’s legal charges against it. 

According to the firm, the xAI head has no grounds to accuse OpenAI of trade secret theft, and this is one case among several attempts to slow down the company’s progress in the AI industry.

“We will protect our employees and won’t be intimidated by his attempts to bully them,” the OpenAI newsroom wrote.

OpenAI fights against Musk’s lawsuits

OpenAI has rejected allegations that it had stolen employees or confidential information from Musk’s AI startup, xAI. The AI company also argued that the business structure change lawsuit, which has paused its plan to change from a non-profit to a for-profit organization, was just Elon’s way to generate headlines and not his legitimate grievances.

“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,” the company said. “He’s been spreading false information about us. We’re building the best-equipped nonprofit the world has ever seen; we’re not converting it away.”

The firm accused Musk of abandoning OpenAI’s mission years ago, noting that he had once sought to merge the project with Tesla to give himself control over its direction.

According to OpenAI, when the company considered transitioning to a for-profit model in 2017, Tesla’s CEO reportedly demanded majority ownership, control of the board, and the chief executive role.

When OpenAI resisted, citing the need to avoid any single person holding absolute control, Musk allegedly withheld funding he had promised to issue. Reid Hoffman, co-founder of LinkedIn, stepped in to cover employee salaries and keep the operation running.

In early 2018, Musk forwarded emails suggesting Tesla could serve as OpenAI’s financial engine as the “only path” to compete with Google’s DeepMind. The emails showed Musk believed even Tesla’s resources gave it only a small chance of counterbalancing Google.

“Even raising several hundred million won’t be enough. This needs billions per year immediately, or forget it,” one of the emails read.

Motion to dismiss illegal hiring practices claims 

OpenAI has also filed a motion to dismiss Musk’s lawsuit on its hiring practices, propounding that it lawfully recruits top researchers, engineers, and developers from every part of the industry. 

“Unable to match OpenAI’s innovation, xAI has filed this groundless trade secret lawsuit,” the defense filing stated. “To be clear: OpenAI does not need or want anyone’s, much less xAI’s, trade secrets to achieve OpenAI’s mission.”

The company accused Musk of attempting to intimidate staff and discourage those who would want to defect from his AI venture by turning legal action into a public relations weapon. Lawyers for OpenAI coined the complaint “lawfare” meant to overwhelm the company with lawsuits.

In addition to trade secret claims, xAI has raised concerns over OpenAI’s collaboration with Apple, insisting that integrating ChatGPT into certain iPhone features constitutes anticompetitive conduct. 

OpenAI’s attorneys dismissed the argument, saying xAI had not shown any measurable harm that would require antitrust laws to step in.

“xAI has not alleged any non-speculative harm rising directly out of ChatGPT’s integration as an option for certain features on certain iPhones. And certainly not the kind of unlawful harm targeted by antitrust law,” the attorneys noted.

OpenAI surpasses SpaceX in valuation

The legal battle comes at a time when OpenAI’s market value has reportedly crossed SpaceX, the rocket company Musk has spent two decades building. According to The New York Times, OpenAI completed a deal that allows current and former employees to sell shares at a $500 billion valuation. 

Roughly $6.6 billion worth of stock changed hands in the transaction, sources familiar with the matter said. Investors included Thrive Capital, SoftBank Group, Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price.

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