- Sam Altman has denied Elon Musk’s claim that OpenAI bans investors from also investing in rivals.
- “That is false,” Altman said Thursday in a sworn statement to a California judge.
- He said investors were only told they’d lose access to OpenAI data if they invested in a competitor.
Sam Altman has personally disputed an accusation now at the center of Elon Musk’s federal racketeering lawsuit against him: Musk’s claim that OpenAI investors must agree to a fund-no-competitor “edict.”
“That claim is false,” Altman said late Wednesday in a sworn declaration to the judge presiding over Musk’s March lawsuit.
The Tesla CEO and DOGE head is accusing Altman of colluding with Microsoft to unlawfully crush competition — including by barring OpenAI’s outside investors from also investing in rival AI companies during the funding round that closed this fall.
Altman’s declaration was filed in opposition to Musk’s demand for an immediate injunction against OpenAI.
If approved by the judge, the injunction would bar OpenAI from forcing investors to agree not to invest in other AI companies and would freeze the tech giant’s ongoing transition from a nonprofit to a for-profit entity.
“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,” Altman swore in the page-long declaration.
There were indeed some restrictions, but those were limited and nothing like Musk described, Altman told US District Judge Yvonne Gonzalez Rogers, who sits in Oakland, California.
Investors who had ongoing access to confidential OpenAI information were told that access would be terminated “if they made non-passive investments in OpenAI’s competitors,” Altman told the judge.
“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’s statement said.
Altman added that in explaining that limited restriction, he did not tell investors that they would lose the ability to invest in OpenAI if they chose to fund Musk’s xAI or any other competitor.
Musk’s claim that his colleague-turned-rival, Altman, was forcing OpenAI investors to agree to the investment ban was raised in detail during a hearing on the lawsuit held before Gonzalez Rogers on Tuesday.
The two men helped cofound OpenAI in 2015. Musk invested $44 million in to the venture before their falling out three years later.
OpenAI’s high-value investors are required to agree to the investment ban as a condition of investing, and “not just in the latest funding round,” Musk attorney Marc Toberoff told the judge on Tuesday, alleging the practice violates federal antitrust laws.
The Biden administration’s Department of Justice and Federal Trade Commission have also warned that such a ban would violate federal antitrust law, Toberoff said.
Altman’s company is now weighing a new funding round that could hike its value to $340 billion, all the while claiming to be a charitable enterprise, Musk’s lawyer told the judge.
“OpenAI — already with 70% of the market, in conjunction with Microsoft — is seeking to strangle their competitors in the crib,” he said.
Responding to Musk’s claim at Tuesday’s hearing, attorneys for Altman and Microsoft, which is also named as a defendant in Musk’s suit, said OpenAI’s investors were never told to boycott competitors.
In fact, Altman’s attorney, Sarah Eddy, told the judge that there are investors who put money in both xAI and OpenAI.
“Some investors in OpenAI agreed that in the event they became non-passive investors or with governance rights in other competitors, they would cease getting certain confidential information from OpenAI. That is the agreement that’s established by the evidence,” Eddy told the judge.
The judge did not say when she expected to rule on the proposed injunction.
Altman and his codefendants — who include OpenAI, Microsoft, OpenAI cofounder Gregory Brockman, and billionaire LinkedIn cofounder Reid Hoffman, are seeking to dismiss the lawsuit. A hearing on those dismissal motions is set for May 28.
Attorneys for Musk and Altman said Tuesday that they’d be ready for trial by the end of 2026 at the earliest.
Read the full article here
