The countersuit, filed in the U.S. District Court for the Northern District of California, marks the latest escalation in a feud that has grown increasingly bitter since Musk launched his rival AI company, xAI, in 2023. OpenAI alleges Musk has used “every tool available to harm” the company—including social media attacks, legal threats, and a failed acquisition attempt.
From Co-founder to Rival
Musk co-founded OpenAI alongside Sam Altman and others in 2015, with a shared mission to develop artificial intelligence for the benefit of humanity. However, Musk parted ways with the company before it rose to prominence through ChatGPT and other breakthrough technologies. Since then, tensions have mounted over OpenAI's shift to a for-profit model, which the company argues is essential to securing the $40 billion in funding it needs to remain competitive in the rapidly evolving AI landscape.
OpenAI's lawsuit claims Musk has repeatedly tried to derail this transition, launching a smear campaign to his more than 200 million followers on X (formerly Twitter), submitting baseless legal claims, and orchestrating a "sham bid" to take over the company's assets.
“Through press attacks, malicious campaigns, a pretextual demand for corporate records, and a sham bid for OpenAI’s assets, Musk has tried every tool available to harm OpenAI,” the filing states.
Legal Fireworks and Big Stakes
OpenAI is asking the court to halt Musk’s alleged interference and to hold him accountable for damages already caused. The countersuit is part of an ongoing legal dispute that is expected to go to jury trial in spring 2026.
Musk’s legal team, however, defended his actions, pointing to a $97.4 billion unsolicited takeover offer earlier this year, which was ultimately rejected by OpenAI’s board. Marc Toberoff, Musk’s attorney, criticized the board’s decision, saying:
“Had OpenAI’s Board genuinely considered the bid, they would have seen how serious it was. It's telling that paying fair market value for OpenAI’s assets allegedly ‘interferes’ with their business plans.”
Social Media and Strategic Moves
OpenAI didn’t mince words on Musk’s motivations, posting on X:
“Elon’s nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit.”
The countersuit follows a string of strategic moves by Musk, including last month’s acquisition of X by xAI, a deal that valued the social media platform at $33 billion and merged its resources with his AI venture. The move gives xAI added visibility and investor appeal, further intensifying competition with OpenAI.
Musk, also the CEO of Tesla and SpaceX, originally sued OpenAI in 2024, claiming the company had betrayed its founding ideals by prioritizing profit over public good. OpenAI and Altman have strongly denied those accusations, asserting that Musk's actions are simply attempts to cripple a competitor.
The Future of AI at Crossroads
The core issue at stake is OpenAI’s transition to a capped-profit model—a hybrid structure designed to attract capital while retaining a commitment to ethical AI development. OpenAI argues this shift is essential to compete in the high-stakes AI arms race, while Musk insists it strays from the company’s original mission.
As the battle between these two AI heavyweights plays out in court and online, the outcome could reshape the future of the industry—and redefine the ethical and financial frameworks that guide it.
Stay tuned. This fight is far from over.
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