OpenAI Wants Its Fraud And Media Manipulation Countersuit Against Elon Musk Kept Alive, Labels His $97.4 Billion Bid A Stunt
On Wednesday, the legal battle between OpenAI and Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk escalated as the ChatGPT maker urged a judge to allow its countersuit to proceed, accusing the billionaire of fraud and media manipulation.
What Happened: In a court filing, OpenAI argued that Musk's motion to dismiss its countersuit has "no grounding in facts" and should be denied, reported Reuters.
The AI firm said its claims of fraudulent business practices under California law should remain part of the upcoming expedited trial.
OpenAI's countersuit, filed in April, alleges that Musk launched a "sham" $97.4 billion takeover bid through a consortium earlier this year, leaking it to the press before presenting it to OpenAI's board in an attempt to generate public attention.
OpenAI also accuses Musk of engaging in a pattern of harassment against the company, asking the court to block any further “unlawful and unfair action,” reported added.
Why It's Important: Musk, who co-founded OpenAI in 2015 but left in 2018, sued the company last year, claiming it abandoned its nonprofit mission by becoming a for-profit entity.
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Earlier this month, OpenAI softened its corporate control structure, with CEO Sam Altman saying, "OpenAI was founded as a non-profit, is today a non-profit that oversees and controls the for-profit, and going forward will remain a non-profit that oversees and controls the for-profit."
Meanwhile, OpenAI’s plan to become a $300 billion public-benefit corporation has been facing hurdles, including demands from state regulators for independent valuations and disputes among major investors over equity.
Delaware's attorney general is reportedly bringing in an investment bank to assess the nonprofit's stake in the new for-profit entity.
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