OpenAI vs Elon Musk: Tesla CEO seeks $79-$134 bn over nonprofit-to-for-profit shift, OpenAI pushes back

Elon Musk has escalated his legal battle with OpenAI and its key partner Microsoft, seeking damages ranging from $79 billion to $134 billion, alleging that the artificial intelligence firm defrauded him by abandoning its original nonprofit mission and transforming into a commercial enterprise. 

The damages claim was detailed by Musk’s lawyer in a court filing on January 16, a day after a US federal judge rejected OpenAI and Microsoft’s attempt to avoid a jury trial. The case is now scheduled to go to trial in late April in Oakland, California, setting the stage for a high-profile confrontation between the world’s richest man and the AI company he helped found. 

Musk, who co-founded OpenAI in 2015 as a nonprofit research lab alongside Sam Altman and others, left the board in 2018. He later launched his own AI startup in 2023 and filed suit against OpenAI in 2024, accusing the company and Altman of manipulating and deceiving him as OpenAI moved toward a for-profit structure and built what he described as an “opaque web” of affiliated entities — including its multibillion-dollar partnership with Microsoft. 

OpenAI and Microsoft have consistently denied Musk’s allegations. 

In a letter sent January 15 to investors and banking partners, OpenAI warned that it expects Musk to make what it described as “deliberately outlandish, attention-grabbing claims” as the trial approaches. The company said the communication was intended to preempt concerns and reassure backers amid intensifying public scrutiny. 

The lawsuit comes at a time when OpenAI’s financial stakes are higher than ever. The company has raised billions of dollars from venture capital firms, and its valuation has reportedly surged to around $500 billion, making governance questions and ownership claims especially sensitive. 

Musk’s complaint argues that he is owed “the value of all intellectual property developed” from his early contributions to OpenAI, a figure that could run into the billions. He alleges that OpenAI’s leadership deviated from its founding promise to develop artificial intelligence for the benefit of humanity, rather than for commercial gain. 

In response, OpenAI has begun publicly pushing back. On January 17, Sam Altman shared screenshots and pointed to a new OpenAI blog post titled “The truth Elon left out”, which directly addresses claims made in Musk’s court filings. 

The blog post publishes internal emails and call notes from 2017, offering primary-source context around OpenAI’s shift away from a purely nonprofit model. According to OpenAI, the documents show that Musk was aware of — and at times supportive of — discussions around restructuring, including the need for significant capital to remain competitive in AI research. The company argues that these records undermine Musk’s assertion that he was misled or excluded from key decisions. 

OpenAI says the release of internal materials is aimed at clarifying the historical record as the dispute moves closer to a jury trial, marking a public escalation in a feud that has been simmering for years.