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Elon Musk vs OpenAI: The legal feud explained as ChatGPT maker countersues world's richest person

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Synopsis
Sam Altman-backed OpenAI has countersued Elon Musk citing a pattern of harassment by him and asked the judge to hold him responsible for the "damage he has already caused" to the company. The Tesla and SpaceX CEO had in August last year filed a lawsuit against OpenAI and others for shifting away from its founding mission to develop AI for the good of humanity and not seek corporate profit.
Elon Musk vs OpenAI: The legal feud explained as ChatGPT maker countersues world's richest personNYT News Service
Elon Musk has been countersued by OpenAI as the company cited a pattern of harassment by the Tesla and SpaceX CEO. On Wednesday, it asked a federal judge to bar him from “further unlawful and unfair action” against it in the ongoing court case over the firm's future structure, which played the pivotal role in launching the AI revolution.
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Amid the bitter feud between the world’s richest person and the AI start-up, OpenAI asked the judge to stop Musk from attacking the firm and even held him responsible for the "damage he has already caused," Reuters reported.


Elon Musk vs OpenAI: How it started?

Musk, senior advisor to US President Donald Trump, co-founded OpenAI along with Sam Altman as a non-profit in 2015. However, he left the startup soon amid the battle to control the firm, The New York Times reported.

Subsequently, Musk introduced his own competing startup xAI in 2023. Post his departure, OpenAI went on to release ChatGPT and emerged itself as a leading firm having several millions of users around the world.

In August last year, Musk filed a lawsuit against the company as well as Sam Altman and Greg Brockman. He accused them of shifting away from its founding mission to develop AI for public good and rather putting their commercial interests ahead.
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This happened after the company started working on a plan to shift its control from non-profit to OpenAI’s investors -- a move that Musk claims breaches its founding contract, according to The New York Times.

In recent times, Musk made efforts to prevent OpenAI from transitioning to a for-profit model, with the matter culminating in a court case. The company is required to complete its transition by 2025-end to bag the $40 billion of the current fundraising round, as per CNN.

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Open AI's claim

In a filing in Musk's ongoing lawsuit against the company in US District Court for the Northern District of California, OpenAI claimed that Musk has tried "every tool available" to harm the company by attacking it through press, malicious campaigns and "pretextual demand for corporate records".

Earlier this year, Musk, along with a consortium of investors, made an offer to purchase assets in the non-profit that takes control of OpenAI for $97.4 billion. However, the same was rejected by the OpenAI's board of directors.

Declining the unsolicited takeover bid with a "no thank you," Sam Altman asserted that the company was not for sale.

In a series of posts on X, which is owned by Musk, OpenAI said that his "non-stop actions" against the company are "just bad-faith tactics" to slow it down and take control of the leading AI innovations for his "personal benefit."

It further claimed that Musk was "spreading false information about us."
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Also Read : TV presenter Adam Richman sparks concern with cryptic social media post

Fast-track trial

In March this year, both the parties had agreed to fast-track a trial over the startup's for-profit shift. This came after they jointly proposed a trial in December 2024.

Last month, the judge had also denied a request from Musk to pause OpenAI's transition to a for-profit model.

FAQs


1. When will the jury trial start in the case?
Elon Musk and OpenAI will begin a jury trial in 2026 spring of 2026.

2. What has Elon Musk said about OpenAI countersuing him?
Musk is yet to make an official statement on the matter.
Disclaimer Statement: This content is authored by a 3rd party. The views expressed here are that of the respective authors/ entities and do not represent the views of Economic Times (ET). ET does not guarantee, vouch for or endorse any of its contents nor is responsible for them in any manner whatsoever. Please take all steps necessary to ascertain that any information and content provided is correct, updated, and verified. ET hereby disclaims any and all warranties, express or implied, relating to the report and any content therein.
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