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US Backs Musk Argument In OpenAI Lawsuit

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U.S. antitrust enforcers weighed in on Friday on Elon Musk’s lawsuit seeking to block OpenAI’s conversion to a public company, pointing out legal doctrines that support his claim that OpenAI and Microsoft engaged in anticompetitive practices.

TakeAway Points:

  • On Friday, U.S. antitrust authorities provided their opinions on Elon Musk’s lawsuit to stop OpenAI from going public.
  • Musk alleges OpenAI violated antitrust law by making investors agree not to invest in rival artificial intelligence firms and by sharing board members with Microsoft
  • Hyundai Motor, a South Korean company, announced on Friday that it would launch the most affordable small electric car in Japan in an attempt to break into a market that is controlled by regional behemoths with well-established hybrid and petrol vehicle technologies.

US supports Musk argument in OpenAI lawsuit

The U.S. Federal Trade Commission and Department of Justice were not expressing an opinion on the case but offered legal analysis on aspects of the case ahead of a Tuesday hearing in Oakland, California. Musk co-founded OpenAI and owns AI startup xAI.

A spokesperson for OpenAI referred to a court document where the company said the lawsuit lacks evidence and amounts to harassment.

Musk’s lawyer Marc Toberoff said, “the participation of the DOJ and FTC is a sign of how seriously regulators take OpenAI and Microsoft’s misconduct.”

The FTC is separately looking into partnerships in AI, including between Microsoft and OpenAI, investigating potentially anticompetitive conduct at Microsoft and probing whether OpenAI violated consumer protection laws.

Musk alleges OpenAI violated antitrust law by making investors agree not to invest in rival artificial intelligence firms and by sharing board members with Microsoft, which is also a defendant in the lawsuit.

OpenAI has said the board member claims are moot because Microsoft board member Reid Hoffman, who was on OpenAI’s board, and Microsoft executive Deannah Templeton, who had an observer seat, are no longer affiliated with it.

But even after they leave 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, the authorities said in their brief.

Musk also claims that OpenAI facilitated a group investor boycott against its rivals. Such claims are viable even when the organiser of the boycott is not a member, the FTC and DOJ said.

Hyundai launches $18,000 EV in Japan 

South Korea’s Hyundai Motor said on Friday it would introduce the cheapest compact electric car in Japan to penetrate a market dominated by local giants with established petrol and hybrid vehicle technologies.

The Japan launch of the Hyundai Inster follows attempts by Tesla and other foreign brands to enter a country seeing a slow take-up of EVs. With the Inster, Hyundai will take a low-price strategy akin to China’s leading EV maker, BYD.

The 2.85 million yen ($18,000) entry-model price tag will be the lowest for a compact electric car in Japan, below the 3.63 million yen BYD set in 2023 with its Dolphin.

Inster, which made its debut in Europe last year after launching in South Korea as Casper Electric, will be delivered to Japanese customers starting around May, Hyundai Mobility Japan CEO Toshiyuki Shimegi said at a news conference during the Tokyo Auto Salon motor show.

Market competition

In the Japanese ultra-compact, limited-power “kei car” category, Nissan Motor’s Sakura is sold at 2.60 million yen and is the most popular EV in the country.

But even Sakura had fewer than 23,000 sales last year, down nearly 40% from 2023, an industry tally showed, highlighting the lack of popularity of EVs in a Japanese passenger car market that has roughly 4 million annual vehicle sales.

Last year, Hyundai sold only 607 vehicles in Japan, while BYD sold 2,223. Tesla did not disclose its Japan sales.

“Inster is our core product to win Japanese customers’ recognition,” Shimegi said, adding that it helps Hyundai meet its goal of boosting Japan sales tenfold in the next five years.

Hyundai, which forms the world’s third-largest auto group with Kia, re-entered Japan’s passenger car market in 2022 with only electric and fuel cell vehicles after exiting in 2009 due to low sales in a country dominated by Toyota Motor, Honda Motor and other Japanese auto majors.

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