Elon Musk’s Lawsuit Over OpenAI’s For-Profit Move Heads to Trial

When two tribes go to war, a point is all that you can score. But this isn’t Frankie Goes to Hollywood. It’s Elon Musk goes to court, with others dragged along.

Musk’s lawsuit against Sam Altman’s OpenAI will proceed to trial after a US judge ruled there is sufficient evidence for a jury to consider claims that the AI company abandoned its original nonprofit mission.

The ruling keeps alive a high-profile legal battle between the world’s richest man and the ChatGPT developer he helped found, raising broader questions about governance, transparency, and profit motives in the rapidly expanding generative AI industry.

Judge allows jury to weigh disputed facts

At a hearing in Oakland, California, US district judge Yvonne Gonzalez Rogers said there was “plenty of evidence” suggesting OpenAI’s leadership made assurances that the organisation would remain a nonprofit dedicated to the public good.

She ruled that the case contains enough disputed factual issues to warrant a jury trial rather than being resolved by the court at this stage. The trial is scheduled for March. Rogers said she would later issue a written order addressing OpenAI’s request to dismiss the lawsuit entirely.

The decision is a setback for OpenAI, which had argued that Musk failed to present sufficient evidence to support claims including fraud and breach of contract. The company also contended that Musk brought the lawsuit too late, beyond the applicable statute of limitations. Rogers said jurors would ultimately be asked to decide whether the claims were filed outside the legal time window.

Allegations of mission drift and self-enrichment

Musk, who co-founded OpenAI in 2015, alleges that the organisation’s leadership violated its founding principles by transforming it from a nonprofit research lab into a profit-driven enterprise. He claims the shift was designed to enrich executives and corporate partners, rather than serve humanity as originally promised.

According to the lawsuit, Musk contributed about $38 million, roughly 60% of OpenAI’s early funding, as well as strategic guidance and credibility, based on assurances that the organisation would remain a nonprofit focused on developing AI for the public benefit.

The complaint accuses OpenAI chief executive Altman and co-founder Greg Brockman of orchestrating a long-term plan to pivot toward a for-profit model. Musk argues that this effort culminated in multibillion-dollar commercial arrangements, including OpenAI’s close partnership with Microsoft and a recent corporate restructuring that expanded its ability to raise capital.

Musk is seeking unspecified monetary damages, which he has described as recovery of “ill-gotten gains.”

OpenAI rejects claims, calls lawsuit harassment

OpenAI and its executives have strongly denied the allegations. In a statement following the hearing, the company said: “Mr Musk’s lawsuit continues to be baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating this at trial.”

The company has portrayed Musk as a disgruntled rival attempting to hinder a competitor that has achieved commercial success and widespread adoption. In court filings, OpenAI, Altman, and Brockman described Musk as “a frustrated commercial competitor seeking to slow down a mission-driven market leader”.

Steven Molo, a lead trial attorney for Musk and his AI startup xAI, welcomed the judge’s decision. “We look forward to presenting all the evidence of the defendants’ wrongdoing to the jury,” he said after the hearing.

Musk’s startup xAI did not immediately respond to a request for comment.

Microsoft’s role under scrutiny

Microsoft, which has invested billions of dollars in OpenAI and integrates its technology across products such as Azure, Office and Windows, is also named as a defendant. Musk alleges the software giant played a role in facilitating OpenAI’s shift away from its nonprofit roots.

Microsoft has denied any wrongdoing and urged the judge to dismiss the claims against it. A lawyer for the company told the court there was no evidence that Microsoft “aided and abetted” OpenAI in any alleged misconduct. Microsoft has been approached for comment.

The case highlights growing legal and regulatory scrutiny of the relationships between major AI developers and large technology companies, particularly as these partnerships shape access to advanced models, computing power, and data.

Broader implications for the AI industry

The lawsuit unfolds against the backdrop of intense competition in the generative AI market, where companies are racing to build increasingly powerful systems while navigating ethical, legal, and safety concerns.

Musk has emerged as a vocal critic of OpenAI since leaving its board in 2018. He later launched xAI, which developed the chatbot Grok and competes directly with OpenAI’s ChatGPT, as well as offerings from Google, Anthropic, and Meta.

Legal experts say the outcome of the case could have implications beyond the immediate dispute, particularly for organisations that begin as mission-driven or nonprofit entities before transitioning toward commercial models.

If Musk ultimately prevails, the verdict could influence how courts interpret founders’ intent, donor expectations, and fiduciary duties in hybrid nonprofit–for-profit structures. A loss, however, could reinforce the ability of AI labs to evolve their governance models as technology and funding demands change.

For now, Judge Rogers’ ruling ensures that these questions will be debated publicly before a jury, setting the stage for one of the most consequential legal battles yet in the AI era.

Well, well, healthcare has experienced an AI shift that might make doctors worried about job security go very pale.

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