GoKawiilElon Musk cofounded OpenAI, and then flounced off in a huff when he wasn’t anointed CEO, leaving Sam Altman as the last power-hungry man standing. Now, Musk is back with a lawsuit, and a trial is scheduled to start in Oakland, California, on April 27th. Theoretically, it’s a legal case about whether OpenAI defrauded Musk. But that’s not really what we’re all doing here. This is about mess.
Over the past couple of years, Musk’s legal theories for punishing OpenAI have run the gamut from breach of contract to unfair business practices to false advertising. Now, he and Altman will be getting called to the stand at a particularly delicate time. Musk’s xAI, now a part of SpaceX, has filed for an initial public offering. OpenAI is rumored to be considering an IPO itself. There are only billions of dollars at stake.
Lawsuits appear to be Musk’s preferred alternative to therapy
The fact that the case got to trial at all is a win for Musk, who seems to be trying to damage OpenAI’s reputation however he can — from lawsuits to general shit-talking to, apparently, a homophobic dossier on Sam Altman that’s getting passed around Silicon Valley by “Musk intermediaries.” Musk v. Altman “only ended up at trial because Elon Musk can pay his attorneys to argue a losing case,” said Sam Brunson, a professor of law at Loyola University of Chicago. “If I were doing this on contingency, I’d assume I wouldn’t be getting paid.”
Over the next few weeks, high-profile AI executives, such as Microsoft’s CEO Satya Nadella and CTO Kevin Scott, will likely testify. Former OpenAI executives, such as cofounder Ilya Sutskever and Mira Murati, former CTO, may be called. The former board members involved in Altman’s temporary 2023 ouster from his CEO role may also testify.
Lawsuits appear to be Musk’s preferred alternative to therapy. Musk has sued perceived adversaries of his X social media platform, including a suit against a nonprofit that was dismissed as “baseless” and another against the firm that successfully made him follow through on his agreement to buy Twitter. Tesla and SpaceX are hotbeds of litigation. Let’s not go over the numerous family law matters that Musk is involved in due to his 14 known children.
Musk has actually filed four lawsuits against OpenAI. The first — for a breach of the founding agreement — was in state court, in 2024; Musk withdrew it immediately before a major hearing. We then got the current lawsuit, also filed in 2024, in which Musk alleged “Shakespearean” deceit. Several of its claims, including a laughable invocation of racketeering law, have been dismissed. Another suit, filed a year later, this time by xAI, accused Apple and OpenAI of engaging in anticompetitive behavior by making an agreement to exclusively put ChatGPT into iPhones. (The case is ongoing.) A fourth case accused OpenAI of poaching xAI employees and stealing trade secrets. It was dismissed.
“Since launching a competing artificial intelligence company, xAI, Musk has been trying to leverage the judicial system for an edge.”
In court starting next week, Musk will be making three main claims: that Altman and Brockman, et al., breached OpenAI’s charitable trust; that they participated in unjust enrichment (at Musk’s expense); and that they committed fraud. His lawyer will tell a jury that he was duped into giving OpenAI money on terms that Altman and Brockman didn’t live up to. Among other things, he’s demanding that Altman and Brockman be removed from their company roles, that OpenAI be required to award a certain amount of money to its nonprofit, and that it cease operating in its current structure as a public benefit corporation.
OpenAI has countered that Musk failed to prove that Altman and Brockman ever made him a “cognizable promise” that could amount to unlawful activity, and that he lacks the standing for some claims, among other objections. It’s pointed out that Musk could have intervened in the company’s 2025 recapitalization in the time between OpenAI filing and its review by two attorneys general, and he did not. “This suit is the latest move in Elon Musk’s increasingly blusterous campaign to harass OpenAI for his own competitive advantage,” OpenAI wrote in one filing. “Since launching a competing artificial intelligence company, xAI, Musk has been trying to leverage the judicial system for an edge. The effort should fail.”
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