OpenAI CEO Sam Altman has officially denied claims made by Elon Musk in a federal lawsuit, dismissing allegations that OpenAI forces investors to avoid backing rival AI companies.
Altman, in a sworn statement filed Wednesday, called Musk’s accusations “false,” refuting the claim that OpenAI imposes non-compete restrictions on its investors. His testimony is a direct response to Musk’s racketeering lawsuit, which alleges that OpenAI and Microsoft conspired to stifle competition.
Altman Says OpenAI’s Policy Is ‘Industry Standard’
Musk’s lawsuit, originally filed in February 2024, argues that OpenAI’s investors were required to agree not to fund competing AI ventures, including his own startup, xAI.
Altman, however, insists that no such policy exists. In his declaration to U.S. District Judge Yvonne Gonzalez Rogers, he clarified that OpenAI only restricts investor access to confidential company data if they make “non-passive investments” in competing firms.
“That restriction is necessary to protect against the misuse of OpenAI’s competitively sensitive information, and I understand it is industry standard for that reason,” Altman stated in his filing.
He emphasized that OpenAI’s policies do not prevent investors from supporting rival AI ventures. Instead, they only impact those who actively participate in competitor companies while maintaining privileged access to OpenAI’s internal data.
Legal Battle Over OpenAI’s For-Profit Shift
Musk is seeking an immediate injunction to halt OpenAI’s alleged restrictions on investors and to freeze its controversial transition from a nonprofit to a for-profit entity.
Altman pushed back on these demands, stating that he never informed investors that their ability to invest in OpenAI was conditional on avoiding competitors. “I did not tell any investor in the October 2024 funding round that their ability to invest in OpenAI was subject to that condition, nor to my knowledge did anyone else at OpenAI,” he wrote.
The legal fight underscores the growing tensions between Musk and OpenAI, a company he helped co-found before stepping away. The billionaire entrepreneur has repeatedly criticized OpenAI’s partnership with Microsoft, arguing that it contradicts the organization’s original mission.
With the case now unfolding in federal court, the outcome could have significant implications for the AI industry, particularly as OpenAI and its competitors continue to attract billions in funding.
Jaja has a degree in journalism and took classes in international law and business communication. Her career spans roles at prominent international media outlets, including International Business Times, Celebeat and Delightful Philippines. As a news editor, Jaja covered a wide range of beats, including legal, business, economy, cryptocurrency, personal finance, gaming, technology, and entertainment.