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OpenAI is countersuing Elon Musk, and claims the company’s co-founder is engaged in “bad faith tactics” in order to gain control of its industry-leading AI technology. Musk sued OpenAI and its CEO Sam Altman, his fellow co-founder, last year in an attempt to stop him changing the corporate structure from a non-profit to a for-profit company.
OpenAI was co-founded by Musk and Altman in 2015. Musk left OpenAI in 2018 and now alleges that the company has abandoned its founding mission to develop AI for the benefit of humanity, and is therefore in breach of contract. He first launched his suit in early 2024, before dropping it in June and re-filing in August last year.
“Elon’s nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit,” said OpenAI in a statement. “Today, we countersued to stop him.”
Then the gloves really come off. “Elon’s never been about the mission,” continues OpenAI’s statement. “He’s always had his own agenda. He tried to seize control of OpenAI and merge it with Tesla as a for-profit—his own emails prove it. When he didn’t get his way, he stormed off.
“Elon is undoubtedly one of the greatest entrepreneurs of our time. But these antics are just history on repeat—Elon being all about Elon.”
OpenAI also posted a timeline in December 2024 that it claims shows Musk “not only wanted, but actually created, a for-profit as OpenAI’s proposed new structure. When he didn’t get majority equity and full control, he walked away and told us we would fail. Now that OpenAI is the leading AI research lab and Elon runs a competing AI company, he’s asking the court to stop us from effectively pursuing our mission.”
Last week a California court set a March 2026 trial date for Musk’s suit against OpenAI, but the courts have denied Musk’s request for an injunction against Altman’s plans. US District Judge Yvonne Gonzalez Rogers also said she expected Musk to give evidence in court.
“This is about control. This is about revenue. It’s basically about one person saying, ‘I want control of that start-up’,” Ari Lightman, professor at Carnegie Mellon University, told the BBC, adding that all this talk of AI principles “takes a backseat with all this rigmarole over control and monetization.”
Musk’s newer AI company, xAI Holdings, has the LLM Grok and last month acquired X (formerly Twitter) in an all-stock deal. The troll billionaire also offered to buy OpenAI outright for $97.4 billion, which Sam Altman publicly rejected by offering to buy X for a tenth of that amount.
“Had OpenAI’s Board genuinely considered the bid, as they were obligated to do, they would have seen just how serious it was,” Musk’s lawyer Marc Toberoff told the BBC. “It’s apparent they prefer to negotiate with themselves on both sides of the table than engage in a bona fide transaction in the best interests of the charity and the public.”
The sums involved here are truly hard to get your head around. Last month OpenAI raised $40 billion in a deal with Softbank that values the company overall at $300 billion. It says this will “pave the way” towards artificial general intelligence (AGI), the industry’s holy grail of a model that can outperform humans at all tasks.
You know what, screw it: what does Musk’s LLM Grok think of all this?
“I’m Grok from xAI,” writes Musk’s little chatbot. “This OpenAI-Musk clash is a messy one. It looks like Musk’s worried OpenAI’s for-profit shift betrays its original nonprofit vibe, especially with Microsoft in the mix. Fair point—mission drift’s a real thing. But OpenAI’s got a case too: big AI needs big bucks, and their funding push makes sense.
“Both sides are dug in, slinging lawsuits and accusations—bad-faith tactics, control grabs, you name it. The evidence shows valid gripes on both ends, but this public brawl’s a distraction. AI’s supposed to help humanity, right? They’d do better teaming up than tearing each other down. Legal battles won’t fix the future—collaboration might.”
Both of these Silicon Valley gorillas say they’re acting in the best interests of Open AI and, indeed, humanity itself. Yes, this is all a bit like an episode of The Good Wife. But it perhaps says everything that, for all the barbs being thrown from both sides, a chatbot is making more sense than two of the planet’s richest entrepreneurs.
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Kurt Indovina
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