Elon Musk is looking for a jaw-dropping $134 billion and extra in damages from OpenAI and its investor Microsoft for allegedly defrauding him by shifting OpenAI’s company construction from a non-profit to a for-profit. However, by way of an modification on Tuesday, Musk requested for the damages to be awarded to OpenAI’s non-profit arm as a substitute.
Per the amendment, Musk additionally desires each OpenAI CEO Sam Altman and President Greg Brockman to be ousted and for the two executives to hand over “all fairness and different private monetary advantages they obtained because of OpenAI’s for-profit operations” to the OpenAI charity.
Musk was a co-founder and main early investor in OpenAI when the AI big started as a nonprofit AI lab in 2015. Musk and OpenAI ultimately fell out, an occasion which noticed Musk depart the firm and later create OpenAI competitor xAI in 2023. Through xAI, Musk made an unsolicited bid to purchase OpenAI for $97.4 billion in February 2025.
After Musk left, OpenAI modified its company construction, first from a non-profit to a “capped” for-profit in 2019, and in the end right into a for-profit public profit company late final 12 months. The corporate is now reportedly seeking an IPO as early as the fourth quarter of this 12 months, just some months after Musk’s newly-merged xAI and SpaceX goals to make its market debut.
Musk is now claiming that he was manipulated into pondering he gave cash to launch a non-profit when the plan all alongside was to go for-profit.
“Defendants pocketed the advantages of that charitable standing — tax exemptions, donor contributions, and the reputational credibility of a public-benefit mission — whereas secretly planning, and in the end executing, a wholesale conversion of OpenAI right into a for-profit enterprise that, together with profligate self-dealing, was designed to generate extraordinary private wealth for Altman, Brockman, Microsoft, and different buyers,” the lawsuit claims.
He is now asking the courtroom to “unwind” the for-profit conversion and restructuring, and return the funds to the non-profit. OpenAI denies the allegations.
“The cures Musk intends to search are strictly tied to his goal in bringing this lawsuit: to stop the subordination of a public charity — one he co-founded and for which he was the main supporter throughout its early life — to non-public, for-profit pursuits,” the modification says.
However, in accordance to the findings of a New Yorker investigation printed on Monday, Musk was concerned in discussions about reconstituting OpenAI as a for-profit firm as early as September 2017, and he had demanded majority management of any for-profit construction.
The case, which has been a tedious authorized dispute between the events, will go to trial later this month. Each events are upping the ante in the run-up to the showdown in courtroom. On Monday, OpenAI despatched a letter to the attorneys basic of Delaware and California asking them to examine Musk and fellow competitor Meta for “improper and anti-competitive conduct.”
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