By Jody Godoy
(Reuters) – U.S. antitrust authorities on Friday intervened in Elon Musk's lawsuit seeking to block OpenAI's conversion to a public company, pointing to legal doctrines that support his claim that OpenAI and Microsoft (NASDAQ engaged in anticompetitive practices.
The U.S. Federal Trade Commission and the Justice Department did not express an opinion on the case, but offered legal analysis on aspects of the case ahead of a hearing Tuesday in Oakland, California. Musk co-founded OpenAI and owns the ai startup xAI.
A Microsoft spokesman declined to comment.
An OpenAI spokesperson referred to a court document in which the company said the lawsuit lacks evidence and amounts to harassment.
Musk's lawyer, Marc Toberoff, said that “the involvement of the Department of Justice and the FTC is a sign of how seriously regulators take OpenAI and Microsoft's misconduct.”
The FTC is separately investigating partnerships in ai, including between Microsoft and OpenAI, investigating potentially anticompetitive conduct at Microsoft and investigating whether OpenAI violated consumer protection laws.
Musk alleges that OpenAI violated antitrust law by making investors agree not to invest in rival artificial intelligence companies and by sharing board members with Microsoft, which is also a defendant in the lawsuit.
OpenAI has said the board members' claims are debatable, because Microsoft board member Reid Hoffman, who was on the OpenAI board, and Microsoft executive Deannah Templeton, who had an observer position , are no longer affiliated with it.
But even after leaving boards, directors could still have sensitive competitive information, the FTC and DOJ said. Board members who only have observer status are not exempt from the law, officials said in their brief.
Musk also claims that OpenAI facilitated a group investor boycott against its rivals. Such claims are viable even when the boycott organizer is not a member, the FTC and DOJ said.
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