Two of tech’s biggest figures are set to face off in court beginning Monday.
Elon Musk, the founder of Tesla and SpaceX, has sued Sam Altman, CEO of OpenAI, in a dispute over how the influential AI research organization evolved. Musk claims he was misled when OpenAI shifted from a nonprofit mission to a for-profit entity that has grown into a major commercial player following the success of ChatGPT.
OpenAI began in 2015 as a nonprofit co-founded by Musk, Altman and others with the stated goal of developing artificial intelligence “to benefit humanity,” free from shareholder pressures. But the founders later decided that access to the computing power and capital needed to build leading AI systems required outside investment, and that the most effective way to attract such funds was to form a for-profit company.
Musk and Altman reportedly clashed over leadership, and Musk left OpenAI’s board in 2018, citing potential future conflicts with Tesla. He later founded his own AI venture, xAI. OpenAI created a for-profit subsidiary in 2019 under a structure where the for-profit company operates beneath a nonprofit parent; the for-profit arm now dwarfs the charity.
In the lawsuit, Musk argues that Altman and other OpenAI leaders broke the law by converting the nonprofit into a for-profit enterprise. He asks the court to disgorge billions in equity and profits that, he says, were improperly obtained from the nonprofit’s conversion and to return those gains to the nonprofit. Musk is also seeking an order to unwind the conversion and restore OpenAI as a bona fide public charity, and he seeks Altman’s removal from both the for-profit leadership and the nonprofit board.
OpenAI says Musk was aware of the need to create a for-profit entity and participated in related discussions. The company has grown dramatically since ChatGPT’s release, saying in court filings it now has nearly 1 billion weekly active users and a valuation in the hundreds of billions of dollars. OpenAI recently closed a major funding round and has been reported to be preparing for a potential IPO.
Musk was an early financial backer of OpenAI, contributing more than $44 million according to court documents, funds that helped launch the operation. OpenAI’s rise since his departure has made it a central player in the AI industry, and a court ruling in Musk’s favor could deeply alter the company and potentially affect the broader AI development landscape.
Legal observers note the case raises complex questions about how organizations can change course. Jill Fisch, a business law professor, framed the dispute as probing the limits of corporate transformation: when an entity pledges to operate in a socially responsible way but later pivots for practical or commercial reasons, what constraints apply?
Commentators also see personal stakes. Alex Kantrowitz, a tech observer, said Musk appears more driven by pride than by financial recovery, noting Musk asks that gains be returned to the charity rather than to himself.
Those watching the trial say the remedies Musk seeks could impede OpenAI’s ability to continue developing models and could remove a leading competitor from the AI race if upheld. Platformer founder Casey Newton called the lawsuit “a clash of two enormous personalities” with potentially wide implications for the future of OpenAI and AI development more broadly.
The trial is being held in the U.S. District Court for the Northern District of California in Oakland before Judge Yvonne Gonzalez Rogers. Jury selection begins Monday, with opening arguments expected Tuesday. Both Musk and Altman are expected to testify. OpenAI and lawyers for both sides declined to comment on the litigation.