By Todd Feathers Published January 10, 2025 | Comments (1) | Elon Musk, left, and Sam Altman, center, during the "What Will They Think of Next? Talking About Innovation" event at the Vanity Fair New Establishment Summit at Yerba Buena Center for the Arts on October 6, 2015 in San Francisco, California. Mike Windle/Getty Images for Vanity Fair Federal antitrust regulators on Friday added weight to portions of Elon Musks lawsuit seeking to prevent OpenAI from restructuring itself into a fully for-profit company.In a brief filed with a federal court in California, attorneys for the Federal Trade Commission and the Department of Justices antitrust division did not directly support Musks claims that OpenAI and Microsoft have colluded in an anticompetitive de-facto merger, but they did urge the court to be skeptical about one of the defenses made by OpenAIs legal team. OpenAI began as a non-profit, funded in part by Musk, and then converted itself into a for-profit company controlled by a non-profit board of directors. It is now planning to completely separate from that non-profit board and become a public benefit corporation, allowing it to be fiduciarily responsible to investors rather than beholden to a charitable mission.A key contributor to OpenAIs growth and the pressure for it to become a profitable business has been the more than $13 billion in investments and other support its received from Microsoft, a publicly traded company that competes in the AI market. Reid Hoffman, the founder of LinkedIn, is a member of Microsofts board and was a member of OpenAIs board until March 2023. A top Microsoft executive, Dee Templeton, was a non-voting member of OpenAIs board from November 2023 until July 2024.Musk has argued that the Microsoft representatives positions on the OpenAI board violated federal antitrust laws that prohibit someone from serving on the governing board of competing companies, which is known as an interlocking directorate. OpenAI has responded by saying the argument is moot because neither Hoffman nor Templeton are members of OpenAIs board anymore. The FTC and DOJ lawyers, however, wrote that ending an interlocking directorate, e.g., by having a person resign from a corporate board, is not sufficient, on its own, to moot a claim under Section 8 of the Clayton Act. In resolving this matter, the Court should avoid holding otherwise. The federal agencies did not weigh in on Musks many other allegations, including that OpenAI CEO Sam Altman misled him and conspired with Microsoft to convince investors not to fund Musks own AI startup, xAI.While the lawsuit has often taken the tone of a soap opera feud between billionaires, the FTC and DOJ filing is another sign that regulators have a close eye on OpenAIs transition plans. Delawares attorney general has filed a brief in the case and said she will take action if she believes OpenAI is violating the law and Meta has asked the California attorney generals office to block OpenAIs restructuring.Daily NewsletterYou May Also Like By Thomas Maxwell Published January 10, 2025 By Thomas Maxwell Published January 10, 2025 By Matt Novak Published January 9, 2025 By Lucas Ropek Published January 9, 2025 By Matthew Gault Published January 9, 2025 By Lucas Ropek Published January 8, 2025