OpenAI Clashes with Musk in Fierce AI Legal Battle
UNITED STATES —OpenAI has filed counterclaims against Elon Musk, accusing its former co-founder of waging a strategic campaign to undermine the AI company’s success following his departure.
The lawsuit, submitted Wednesday in a federal court in northern California, alleges Musk is misrepresenting OpenAI’s restructuring while advancing his competing AI venture, xAI.
According to the filing, Musk exited OpenAI in 2018 after leadership refused to grant him full control or approve a merger with Tesla.
OpenAI further contends that Musk failed to fulfill his $1 billion funding pledge. Since then, he has allegedly launched repeated attacks on OpenAI, leveraging his influence on X (formerly Twitter) to spread misleading claims while aggressively expanding xAI.
The dispute escalated as OpenAI transitioned into a public benefit corporation while maintaining its nonprofit foundation—a move Musk has publicly criticized as a shift toward profit-driven motives.
However, a federal judge denied his request to block the transition and a jury trial is set for March 2026, though further legal proceedings may affect the timeline.
OpenAI maintains Musk’s lawsuit is an attempt to reclaim influence over AI advancements rather than uphold its founding mission, citing statements from its leadership in recent filings.
Financial stakes are high—OpenAI recently secured a record-breaking $40 billion funding round, elevating its valuation to $300 billion.
The company aims to complete its restructuring by 2025 to reassure investors and strengthen its long-term growth strategy.
According to Jamaica Observer, Musk’s AI startup, xAI, faces stiff competition in the AI sector despite substantial investments and his acquisition of X to expand his foothold in AI development.
The lawsuit highlights intensifying tensions within the artificial intelligence industry, as major players compete for dominance in a rapidly evolving field.
OpenAI seeks legal measures to prevent Musk’s alleged interference and hold him accountable for damages.
