TLDR:
- OpenAI filed a countersuit against Elon Musk, accusing him of “bad-faith tactics” and a “self-serving narrative”
- Emails allegedly show Musk pushed to abandon OpenAI’s nonprofit model, take majority equity, and become CEO as early as 2015
- OpenAI seeks compensatory and punitive damages, plus an injunction to prevent further “harassment and disruption”
- OpenAI recently secured $40 billion in funding led by SoftBank, valuing the company at $300 billion
- Musk’s rival AI startup xAI merged with X last month in an all-stock deal valuing xAI at $80 billion
OpenAI has launched a countersuit against Elon Musk, claiming the billionaire attempted a hostile takeover of the company he helped found. The AI research giant is seeking damages and an injunction to block what it describes as Musk’s “campaign of harassment and disruption.”
In court filings dated April 10, 2025, OpenAI presented emails allegedly showing that Musk himself was the first to push for the company to abandon its nonprofit structure. The company claims Musk wanted to convert OpenAI into a for-profit entity as early as November 2015, just months after its founding.
“These antics are just history on repeat—Elon being all about Elon,”
OpenAI’s official newsroom posted on X, sharing internal emails to support their claims. Decrypt has not independently verified these emails, and representatives for Musk’s companies did not immediately respond to requests for comment.
Elon’s never been about the mission. He’s always had his own agenda. He tried to seize control of OpenAI and merge it with Tesla as a for-profit – his own emails prove it. When he didn’t get his way, he stormed off.
Elon is undoubtedly one of the greatest entrepreneurs of our…
— OpenAI Newsroom (@OpenAINewsroom) April 9, 2025
The Push for Profit
According to the emails released by OpenAI, Musk questioned the company’s structure in November 2015. In a message to CEO Sam Altman, Musk allegedly wrote that a “standard C corp with a parallel nonprofit” would “likely align incentives better.”
By summer 2017, as OpenAI’s computing needs grew with its Dota 2 experiments, discussions about funding intensified. On July 13, 2017, Musk reportedly agreed a for-profit model might be necessary for the company’s survival.
Days later, he warned that China’s AI ambitions were another reason to “change course.” This led to what OpenAI describes as Musk’s power play in September 2017.
The company claims Musk pushed for “initial control” over OpenAI’s board in exchange for capital. He also allegedly demanded to become CEO and proposed a structure where he would appoint four out of seven board seats.
“I would unequivocally have initial control of the company,” Musk wrote, according to the emails. OpenAI further alleges that Musk directed his team to incorporate a for-profit shell company called Open Artificial Intelligence Technologies, Inc., planning to move OpenAI’s intellectual property under it.
Co-Founders Push Back
OpenAI’s co-founders rejected Musk’s terms. In what the company describes as a candid message, they warned that Musk’s proposed structure risked creating an “AGI dictatorship.”
Musk’s alleged response was blunt: “Discussions are over. I will no longer fund OpenAI.”
In January 2018, Musk reportedly proposed spinning OpenAI into Tesla, claiming it was the only way to raise the billions needed. “OpenAI is on a path of certain failure relative to Google,” he wrote, according to the countersuit.
The OpenAI team declined again, unwilling to become a Tesla subsidiary. By February 2018, Musk resigned as co-chair and parted ways with the company.
The Legal Battle Intensifies
Years later, Musk returned with a lawsuit against OpenAI. In March 2025, he sought to block its transition to a capped-profit structure. A U.S. judge denied the injunction but agreed to an expedited trial, set for fall 2025.
OpenAI’s countersuit now seeks to block what it calls Musk’s “sham $97 billion takeover bid” and is asking for compensatory and punitive damages to be determined at trial.
“Through press attacks, malicious campaigns broadcast to Musk’s more than 200 million followers on the social media platform he controls, a pretextual demand for corporate records, harassing legal claims, and a sham bid for OpenAI’s assets, Musk has tried every tool available to harm OpenAI,” the company stated in its filing.
Musk’s attorney, Marc Toberoff, responded to the countersuit in an emailed statement: “Had OpenAI’s Board genuinely considered the bid as they were obligated to do they would have seen how serious it was. It’s telling that having to pay fair market value for OpenAI’s assets allegedly ‘interferes’ with their business plans.”
Competing AI Ventures
Musk has since founded rival AI startup xAI, which merged with X last month in an all-stock deal valuing xAI at $80 billion.
OpenAI, meanwhile, announced a $40 billion funding round led by SoftBank, pushing its valuation to $300 billion—nearly four times that of Musk’s xAI startup.
“We’re getting ready to build the best-equipped nonprofit the world has ever seen,” OpenAI said in its countersuit. “The idea that we abandoned the mission is false. Elon’s own emails make that clear.”
The company now seeks an injunction to force Musk to cease his public attacks. “Musk’s continued attacks on OpenAI, culminating most recently in the fake takeover bid designed to disrupt OpenAI’s future, must cease,” the filing states.
According to recent reports, OpenAI’s ChatGPT assistant now has 500 million weekly users, and the company is on pace for nearly $13 billion in 2025 revenue.
