OpenAI vs Elon Musk, The Legal War Over the Future of Artificial Intelligence

                                                                

OpenAI has filed a countersuit against Elon Musk, accusing him of orchestrating a multi-pronged campaign to damage the company through legal harassment, misinformation, interference with investor relations, and a symbolic $97.4 billion takeover bid. The countersuit, filed on April 9, 2025, in the U.S. District Court for the Northern District of California, seeks an injunction against Musk’s alleged actions and asks for damages. OpenAI claims that Musk’s behavior threatens not only its corporate restructuring but also its fundraising efforts.

The origins of this legal battle trace back to OpenAI’s foundation in 2015. Initially founded as a nonprofit research lab with the goal of ensuring artificial general intelligence (AGI) benefits all of humanity, the company received early backing from Musk and Sam Altman. However, OpenAI alleges that Musk left the company in 2018 after failing to gain control over the organization or integrate it with Tesla. The company also claims that Musk did not fulfill his financial commitments, pledging $1 billion but contributing far less.

One of the key issues raised in OpenAI's countersuit is Musk’s continued spread of misinformation. The company argues that Musk has mischaracterized its shift from a nonprofit to a capped-profit public benefit corporation, presenting it as a full conversion to a for-profit model. This has allegedly caused confusion and harmed the company’s reputation.

OpenAI further outlines what it calls a sustained harassment campaign by Musk. This includes press attacks, malicious public statements, and amplifying misinformation through his 200+ million followers on X (formerly Twitter). Legal actions, such as demands for internal records and breach of contract claims, as well as Musk’s unsolicited takeover bid, are also cited as part of this strategy. The company argues that these actions are designed to destabilize OpenAI, hinder its growth, and disrupt its business relationships.

The countersuit also addresses Musk’s $97.4 billion takeover offer, which OpenAI rejected. The company referred to the bid as a “feint,” a gesture meant to cause disruption rather than a serious offer. The amount reportedly references a character from a science fiction novel favored by Musk, suggesting that the bid was not intended to be taken seriously. Musk’s legal team, however, insists that the board should have considered the offer in good faith.

Financially, OpenAI has recently seen significant growth, having raised $40 billion in funding, making it one of the largest startup funding rounds in history. This has increased its valuation to $300 billion. However, OpenAI must finalize its transition into a public benefit corporation by the end of 2025 in order to unlock the full funding. The company warns that Musk’s actions could hinder this process, potentially undermining investor confidence.

The dispute also highlights Musk’s growing rivalry with OpenAI. After leaving the company, Musk launched x AI, a generative AI company meant to rival OpenAI and other tech giants. In 2025, Musk acquired X (formerly Twitter) and merged it with XAI Holdings, creating a $100 billion entity that combines his AI and media interests. This adds another layer of competition between the two companies.

In terms of the legal process, Judge Yvonne Gonzalez Rogers has denied Musk’s motion to block OpenAI’s restructuring plans. Although a trial date was initially set for an earlier period, it is now scheduled for March 2026, with Musk expected to testify. The case is likely to become a significant precedent in tech governance and AI regulation, especially given the broader implications of how AI companies operate and compete.

This legal clash between Musk and OpenAI goes beyond personal rivalries and touches on larger debates about the future of AI development, governance, and commercialization. With billions in capital, public trust, and the future of AGI at stake, the outcome of this case could have far-reaching consequences for the tech industry. It may set the stage for how artificial intelligence is regulated, how companies transition from nonprofit to for-profit structures, and how competition is managed in this rapidly advancing field.

Writer: Chrycentia Henryana