US regulators have sided with Elon Musk, who is seeking an injunction to prevent AI startup OpenAI from restructuring into a commercial company. The US Department of Justice and the Federal Trade Commission (FTC) supported part of Elon Musk’s arguments in his lawsuit against OpenAI and Microsoft regarding the overlap of members of the boards of directors of these companies, Bloomberg reported.
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Musk’s lawsuit states that OpenAI and Microsoft violated antitrust laws because LinkedIn co-founder Reid Hoffman simultaneously served on the boards of directors of both companies from 2017 to 2023. Additionally, Deannah Templeton, a member of Microsoft’s leadership team, served on the OpenAI board of directors without voting rights from December 2023 to July 2024.
«When a defendant voluntarily ceases unlawful conduct, he still bears a “heavy burden” of proving that “it is clear that the alleged unlawful conduct cannot reasonably be repeated,” the FTC and the US Department of Justice said. Regulators noted that they have not yet decided whether OpenAI can be restructured.
OpenAI declined to comment on the regulators’ statement. She previously argued that Hoffman and Templeton’s presence on the board of directors does not violate antitrust laws.
A hearing on Musk’s injunctive relief lawsuit is scheduled for Tuesday in the U.S. District Court for the Northern District of California in Oakland.
The FTC is looking into OpenAI’s activities as part of several investigations. In particular, an investigation is underway into possible privacy violations when training the ChatGPT AI bot. The possibility of antitrust violations by Microsoft and other tech giants when investing in AI is also being explored. Separately, the FTC is investigating whether OpenAI misled consumers about its offerings.