By Jody Godoy

(Reuters) – U.S. antitrust officials on Friday weighed in on Elon Musk’s lawsuit to block OpenAI’s conversion to a public company, pointing to legal doctrines that support their claim that OpenAI and Microsoft engaged in practices anti-competitive

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

A Microsoft spokesman declined to comment.

An OpenAI spokesperson referred to a court filing where the company said the lawsuit lacks evidence and amounts to harassment.

Musk’s lawyer, Marc Toberoff, said: “The involvement of the DOJ and the FTC is a sign of how seriously regulators are taking the misconduct of OpenAI and Microsoft.”

The FTC is separately investigating AI partnerships, including between Microsoft and OpenAI, investigating potentially anticompetitive conduct by Microsoft and investigating whether OpenAI violated consumer protection laws.

Musk alleges that OpenAI violated antitrust law by getting investors to agree not to invest in rival AI companies and by sharing board members with Microsoft, which is also a defendant in the lawsuit.

OpenAI has said that the board members’ claims are disputed, because Microsoft board member Reid Hoffman, who was on OpenAI’s board, and Microsoft executive Deannah Templeton, who had a seat on observer, they are no longer affiliated.

But even after leaving the 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 filing.

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.

(Reporting by Jody Godoy in California; Editing by Rod Nickel)