TLDR
- OpenAI has countersued Elon Musk, accusing him of harassment and attempting a hostile takeover
- Email evidence suggests Musk pushed to convert OpenAI to for-profit while demanding majority control and CEO position
- OpenAI is seeking compensatory and punitive damages, plus injunctive relief to prevent further interference
- Musk previously filed suit claiming OpenAI abandoned its nonprofit mission
- The legal battle comes as OpenAI secured $40 billion in new funding, valuing it at $300 billion compared to xAI’s $80 billion
OpenAI has launched a countersuit against Elon Musk, accusing the billionaire of harassment and attempting a hostile takeover of the company he co-founded. The AI research organization claims to have email evidence showing Musk pushed for a for-profit model years before his public complaints about the company abandoning its nonprofit mission.
Elonâs 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. Today, we counter-sued to stop him.
— OpenAI Newsroom (@OpenAINewsroom) April 9, 2025
In court filings submitted on Wednesday, OpenAI alleges Musk engaged in “bad-faith tactics” and created a “self-serving narrative” about the company’s direction. The countersuit seeks to block what OpenAI describes as Musk’s “campaign of harassment and disruption,” while asking for compensatory and punitive damages to be determined at trial.
“These antics are just history on repeatâElon being all about Elon,” OpenAI wrote in a post on X, sharing internal emails that allegedly show Musk advocating for structural changes at the company.
The emails, which Decrypt has not independently verified, paint a different picture than Musk’s public stance. According to OpenAI, Musk began questioning the company’s nonprofit structure as early as November 2015, writing to CEO Sam Altman that a “standard C corp with a parallel nonprofit” would better align incentives.
By 2017, as OpenAI’s computing needs grew with its Dota 2 experiments, Musk allegedly encouraged expansion and acknowledged a for-profit model might be necessary. He also cited China’s AI ambitions as a reason to “change course.”
Elonâs never been about the mission. Heâs always had his own agenda. He tried to seize control of OpenAI and merge it with Tesla as a for-profit â his own emails prove it. When he didnât get his way, he stormed off.
Elon is undoubtedly one of the greatest entrepreneurs of ourâŚ
— OpenAI Newsroom (@OpenAINewsroom) April 9, 2025
The Takeover Attempt
OpenAI claims that in September 2017, Musk made a move to take control of the company. He allegedly pushed for “initial control” of OpenAI’s board in exchange for capital and demanded to become CEO.
Emails from that period show him proposing a structure where he would appoint four out of seven board seats. “I would unequivocally have initial control of the company,” he allegedly wrote.
The company also claims Musk directed his team to set up a for-profit shell company called Open Artificial Intelligence Technologies, Inc., with plans to transfer OpenAI’s intellectual property to this new entity.
OpenAI’s co-founders reportedly rejected these terms, warning that Musk’s proposed structure risked creating an “AGI dictatorship.” Musk’s response, according to the countersuit, was clear: “Discussions are over. I will no longer fund OpenAI.”
In January 2018, Musk allegedly proposed making OpenAI a subsidiary of Tesla, arguing it was the only way to raise the billions needed to compete with Google. When the team declined, Musk resigned as co-chair and left the company in February 2018.
Legal Battle Intensifies
The current legal battle began in March when Musk sued OpenAI, seeking to block its transition to a capped-profit structure. A U.S. judge denied Musk’s request for an injunction but agreed to an expedited trial, scheduled for fall 2025.
In its countersuit, OpenAI asks the judge to stop Musk from any “further unlawful and unfair action” against the company. The two parties are set to begin a jury trial next spring.
“Through press attacks, malicious campaigns broadcast to Musk’s more than 200 million followers on the social media platform he controls, a pretextual demand for corporate records, harassing legal claims, and a sham bid for OpenAI’s assets, Musk has tried every tool available to harm OpenAI,” the company wrote in its filing.
Musk’s legal team defended his actions, referring to a $97.4 billion unsolicited takeover bid from a Musk-led consortium that OpenAI rejected earlier this year. “Had OpenAI’s Board genuinely considered the bid as they were obligated to do they would have seen how serious it was,” Musk’s lawyer Marc Toberoff said in a statement.
Meanwhile, Musk has founded rival AI startup xAI, which merged with X last month in an all-stock deal valuing xAI at $80 billion. For comparison, OpenAI recently announced a $40 billion funding round led by SoftBank, pushing its valuation to $300 billion.
“We’re getting ready to build the best-equipped nonprofit the world has ever seen,” OpenAI stated in its countersuit. “The idea that we abandoned the mission is false. Elon’s own emails make that clear.”
The legal battle comes at a time when OpenAI is expanding its offerings. The company recently announced it would make ChatGPT Plus available for free to college students across the U.S. and Canada for a limited time. It also launched its most powerful model yet, o1 Pro, along with a new subscription tier priced at $200 per month.
Representatives for Musk’s companies, Tesla and SpaceX, did not immediately respond to requests for comment on the countersuit.
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