Elon Musk’s ongoing legal dispute with OpenAI CEO Sam Altman is just beginning, and a courtroom battle over the future of the organisation they co-founded could last until 2027. This week, a California federal district judge confirmed that the case was headed for trial, with Oakland federal district Judge Gonzalez Rogers stating that “something is going to trial in this case.”
The legal feud between Musk and Altman, which centers on the direction of OpenAI, has been a long-running saga. Musk and Altman co-founded OpenAI in 2015, but they parted ways in 2018, with Musk later launching his own competing AI company, xAI. Musk’s lawsuit against OpenAI, filed in August 2023, accuses the company of prioritising profits over its original nonprofit mission of advancing artificial intelligence for the greater good of humanity.
At the heart of Musk’s complaint is his claim that his $45 million donation to OpenAI was conditioned on the organisation remaining a nonprofit. Musk argues that Altman’s push to transition OpenAI into a for-profit entity violated this agreement. In response, Altman and OpenAI have denied Musk’s allegations, asserting that the change to a for-profit model was necessary for securing the funding needed to scale their AI operations.
During a hearing this week, Judge Gonzalez Rogers indicated that Musk’s claims raised legitimate questions about the terms of his relationship with OpenAI. However, she also expressed scepticism about granting Musk’s immediate request to block OpenAI’s for-profit conversion, noting that such injunctions are rarely granted. Instead, the judge confirmed that the case will proceed to trial, where a jury will ultimately decide the outcome.
Musk’s accusations go beyond the nonprofit-versus-for-profit debate. He has also claimed that Altman engaged in anti-competitive behaviour by allegedly instructing OpenAI’s investors to refrain from funding competing AI firms, including Musk’s xAI. He has also named key figures such as Reed Hoffman, LinkedIn’s founder, and Deanna Templeton, a Microsoft executive, as defendants, accusing them of holding dual roles in both OpenAI and Microsoft, thereby creating potential conflicts of interest. These claims are being vigorously denied by OpenAI and its partners.
One of the key points in this dispute is the role of Microsoft, a major investor in OpenAI. Microsoft has invested heavily in the company, reportedly pouring $13.75 billion into OpenAI by October 2024. Musk’s legal team argues that the close ties between OpenAI and Microsoft may have given the tech giant undue influence over OpenAI’s operations, particularly in the competitive market for AI chatbots.
The case continues to unfold as Musk and Altman trade legal and public barbs, with the dispute threatening to shape the future of AI development. The trial, which may not take place until 2027, will be one of the most high-profile in the tech world in recent years.
