OpenAI Countersues Elon Musk Amid Legal Dispute

• Countersuit Filed:

  On April 9, 2025, OpenAI filed a countersuit in the U.S. District Court for the Northern District of California in response to Elon Musk’s ongoing lawsuit. The filing seeks an injunction against Musk’s alleged campaign of “unlawful and unfair action” and requests that he be held liable for damages. OpenAI claims his actions are not only disruptive but threaten the future of its corporate restructuring and fundraising goals.

• Founding Disputes:

  OpenAI, founded in December 2015 as a nonprofit research lab aimed at ensuring AGI benefits all humanity, received early backing from Musk and Sam Altman. The company alleges that Musk left in 2018 after failing to gain control or integrate OpenAI into Tesla. According to the countersuit, Musk’s financial support also fell short—he pledged $1 billion but contributed “not even close” to that amount before exiting.

• Spreading Misinformation:

  OpenAI countersues Elon Musk claiming he has consistently spread false narratives about OpenAI’s mission and structure. OpenAI states Musk is deliberately mischaracterizing its current transformation into a capped-profit public benefit corporation as a full conversion to a traditional for-profit model, misleading the public and damaging its reputation.

• Pattern of Harassment:

  OpenAI outlines what it calls a sustained harassment campaign by Musk, including:

  • Press attacks and malicious public statements

  • Amplified misinformation through his 200+ million followers on X (formerly Twitter)

  • Legal actions, including demands for internal records and breach of contract claims

  • An unsolicited and disruptive takeover bid

    OpenAI alleges Musk’s efforts are designed to derail its operations, hinder its transition, and create competitive instability.

• Unfair Competition and Business Interference:

  OpenAI countersues Elon Musk accusing him of unfair competition and of interfering with business relationships, especially those involving investors and commercial partners. The countersuit asserts that Musk’s public antagonism and legal maneuvers have disrupted business negotiations and threatened future capital acquisition.

• Background Context:

  Musk first sued OpenAI in early 2024, accusing it of breaching its founding nonprofit principles. OpenAI and Altman have rejected the claims. The countersuit expands the legal and reputational stakes by asserting economic sabotage, false claims, and personal vendettas as core motivations behind Musk’s actions.

• Sham Takeover Offer with Literary Reference:

  In February 2025, Musk and a group of investors made a $97.4 billion bid to take over OpenAI. OpenAI rejected it, calling it a “feint.” The offer’s number reportedly references a character—Praf 974—from Look to Windward, a sci-fi novel by Iain M. Banks, known to be favored by Musk. OpenAI claims this shows the unserious and performative nature of the bid. Musk’s legal team disputes this characterization, asserting that the board was obligated to consider the bid seriously.

• Financial Growth and Structural Deadline:

  OpenAI recently completed the largest startup funding round in history, raising $40 billion and reaching a $300 billion valuation. To unlock the full funding, it must finalize its structural transition into a public benefit corporation by the end of 2025. OpenAI warns that Musk’s campaign threatens to derail this process by undermining investor confidence.

• Competing Interests – xAI and XAI Holdings:

  After leaving OpenAI, Musk launched his own generative AI company, xAI, in 2023. He has invested tens of billions of dollars in it to rival OpenAI and other AI giants. In March 2025, Musk acquired X (formerly Twitter) for $33 billion and integrated it into XAI Holdings, consolidating his AI and media interests. The new entity is valued at over $100 billion.

• Business Ties Between Parties:

  The Associated Press, one of the media organizations covering the lawsuit, has a licensing agreement with OpenAI that grants the company access to parts of AP’s archives for AI training purposes—an arrangement not directly related to the legal dispute but noted for transparency.

• Judicial Process:

  U.S. District Judge Yvonne Gonzalez Rogers has denied Musk’s motion to block OpenAI’s corporate restructuring. While she initially offered an earlier court date, the trial is now scheduled for March 2026. Musk is expected to testify, and the case is likely to become a precedent-setting legal battle in tech and AI governance.

Why This Matters:

The Musk–OpenAI legal feud is more than a corporate rivalry—it encapsulates a fundamental debate over how AI should be developed, governed, and monetized. With billions in capital, public trust, and global influence at stake, the case will likely set the tone for AI regulation, corporate mission alignment, and competitive practices in the most consequential tech race of the century.