Elon Musk’s injunction, Canadian publishers targeting the company, and ambitious plans for the next phase of growth. Here’s a look at some of OpenAI’s latest developments.
Musk vs OpenAI: the growing legal battle
Elon Musk has stepped up his legal battle against OpenAI. On Friday last week, he filed a motion for a preliminary injunction, seeking (among other things) to halt OpenAI’s transition into a wholly for-profit entity until the case is resolved.
Musk co-founded OpenAI in 2015, but left in 2018, citing disagreements over the company’s direction. Since then, OpenAI transitioned to a limited-profit model in 2019 and is now pursuing a fully for-profit transition.
Musk filed a lawsuit against OpenAI (along with CEO Sam Altman and president Greg Brockman) on February 29 of this year, for alleged charity infringement. That is, that the company had deviated from its original nonprofit mission of developing artificial intelligence for the benefit of humanity, violating the terms under which Musk’s donations were made. This lawsuit was dropped in June 2024 without explanation, but was revived in August and then expanded in mid-November to include Microsoft as a defendant.
Microsoft has invested approximately $14 billion in OpenAI since 2019.
Claims in Friday’s filing include:
- that OpenAI has abandoned its original non-profit mission;
- that OpenAI and its partners, including Microsoft, are engaging in anticompetitive practices such as investor restraints, in violation of the Sherman Act;
- that Microsoft profited from competitively sensitive information in violation of the Clayton Act;
- that OpenAI leadership, including Sam Altman, engaged in self-dealing by transferring assets and intellectual property to for-profit entities in which they had financial interests;
- that Musk, OpenAI, and the public at large will suffer irreparable harm if the injunction is not granted. For example, OpenAI and Microsoft’s dominance in the artificial intelligence market would consolidate, and Musk’s new venture, xAI, would be at risk of losing access to critical investment capital;
- that public interest considerations favor the injunction. OpenAI’s current path is believed to damage public trust, stifle AI innovation, and accelerate unsafe AI deployment.
In response to Musk’s complaint, an OpenAI spokesperson dismissed the claims as “totally baseless.”
Musk’s xAI
While challenging OpenAI, Musk has simultaneously transformed his artificial intelligence venture, xAI, into a formidable rival.
Founded in July 2023, xAI has already reached a valuation of $50 billion and recently closed a $5 billion funding round. The company’s flagship product, the Grok chatbot, integrates with Musk’s X social media platform (formerly Twitter) and was trained using X data.
xAI’s rapid growth is supported by investments in infrastructure such as the Memphis-based “Colossus” supercomputer, made up of 100,000 Nvidia GPUs, which became operational in early September.
Canadian publishers sue OpenAI for copyright infringement
Also on Friday, five major Canadian news organizations (CBC/Radio-Canada, Globe and Mail, Toronto Star, Canadian Press and Postmedia) filed a major lawsuit against OpenAI, accusing the company of using their proprietary articles without permission. to train its ChatGPT model.
The case was filed in the Ontario Superior Court, seeking damages of up to C$20,000 per item.
The plaintiffs allege that OpenAI “deletes” proprietary content from news websites, bypassing copyright protections such as paywalls and disclaimers. “They are exploiting journalism while substantially, unfairly and illegally enriching themselves at the expense of publishers,” said Paul Deegan, president of News Media Canada.
If successful, the lawsuit could result in billions of dollars in damages, setting a precedent for how AI companies interact with copyrighted material.
While OpenAI maintains that its practices fall within the principles of fair use, the plaintiffs argue that the scope and nature of the alleged infringement goes well beyond what is permitted.
This case is part of a larger wave of litigation against AI companies, including:
- December 2023: The New York Times alleged that ChatGPT and Microsoft Copilot reproduced Times articles without permission. The case is currently in the discovery phase.
- April 2024: Eight US newspapers, including the Chicago Tribune and the New York Daily News, alleged that OpenAI and Microsoft illegally collected copyrighted articles to train their AI models.
- October 2024: The publishers of the New York Post and the Wall Street Journal sued Perplexity AI, alleging that the AI startup had copied substantial amounts of their copyrighted content without permission.
What is the future of OpenAI?
OpenAI is valued at $157 billion, but faces significant costs, spending more than $5 billion annually, as well as competition from numerous rivals, such as Google’s “Gemini” and Anthropic’s “Claude,” Perplexity AI and Grok” by xAI.
Despite the challenges, the company is pushing ahead with an ambitious action plan. It has 250 million weekly active users and hopes to reach 1 billion users by 2025.