Two titans of tech are set to face off in court starting Monday as Elon Musk, the CEO of Tesla and SpaceX, sues Sam Altman, CEO of OpenAI, in a high-stakes dispute over the direction of one of the world’s most influential AI companies.
Musk alleges Altman duped partners when OpenAI transformed from a nonprofit founded to “benefit humanity” into a for‑profit powerhouse. The shift, Musk contends, unlawfully converted the charity into a commercial enterprise that now, fueled by the viral success of ChatGPT, has a valuation approaching $1 trillion and is preparing for a possible stock listing.
OpenAI was founded in 2015 by Musk, Altman and others as a charity intended to develop AI free from shareholder pressures. Founders later concluded that accessing the massive computing power and chips required to build world‑class AI demanded capital only deep-pocketed investors could provide, and a for‑profit structure was created. Technically, the for‑profit entity formed in 2019 operates as a subsidiary of the nonprofit OpenAI Foundation, but it dominates the organization.
Musk and Altman reportedly clashed over leadership. Musk left OpenAI’s board in 2018, citing potential conflicts with Tesla, and in 2023 launched his own AI firm, xAI. In the lawsuit, Musk asserts Altman and others broke the law in converting the nonprofit into a for‑profit operation. Musk’s lawyers accuse Altman of a “long con,” calling the alleged deceit “of Shakespearean proportions.” OpenAI says Musk was aware of and part of discussions about the need to become for‑profit.
Musk seeks to disgorge billions in equity and money he says were made illegally by Altman and others and to return those gains to the nonprofit portion of OpenAI. He also seeks to unwind the for‑profit conversion and restore OpenAI as a bona fide public charity, and to remove Altman from leadership roles in both the for‑profit and nonprofit entities.
Musk was the largest individual early financial backer of OpenAI, contributing more than $44 million, funds analysts say were crucial to getting the project started. Since Musk’s departure, OpenAI’s profile has surged: the company says it has nearly 1 billion weekly active users and a valuation of $852 billion. OpenAI recently closed a reported $122 billion funding round, and The Wall Street Journal has reported the company is planning an initial public offering, possibly later this year. OpenAI declined to comment on IPO reports; attorneys for both sides declined to comment on the lawsuit.
Observers say the case raises broader questions about how corporations can change course. Jill Fisch, a business law professor at the University of Pennsylvania, framed the dispute as asking whether organizations committed to a particular socially responsible model can pivot and what limits exist on such changes. Casey Newton of the Platformer newsletter called the dispute “a clash of two enormous personalities,” and said what’s at stake could be the future of OpenAI and broader AI development.
Analyst Alex Kantrowitz noted the case mixes business and ego, pointing out Musk is asking that gains be restored to the charity rather than to himself, and suggested pride is a major driver. If Musk prevails and the court orders his remedies, it could dramatically alter OpenAI’s structure and potentially hinder its ability to develop future models, possibly affecting competition in the AI industry.
The trial is in the U.S. District Court for the Northern District of California in Oakland before Judge Yvonne Gonzalez Rogers. Jury selection begins Monday, opening arguments are expected Tuesday, and both Musk and Altman are expected to testify.