United States: OpenAI has filed a countersuit against Elon Musk, accusing the Tesla and X (formerly Twitter) boss of a deliberate campaign to damage the company through legal threats, public attacks, and a ‘sham bid’ to take control of its assets.
The legal filing, submitted in a California district court, asks a federal judge to halt what OpenAI describes as Musk’s ‘unlawful and unfair actions.’ The company claims Musk has used every tool at his disposal, including his extensive social media following and influence, to disrupt its operations and reputation.
Musk co-founded OpenAI alongside CEO Sam Altman in 2015 but stepped away from the company in 2018. Since then, tensions between the two have grown, particularly as OpenAI transitioned from a nonprofit organisation to a for-profit hybrid model to attract major funding for its AI research.
Earlier this year, Musk led a surprise $97.4 billion takeover bid for OpenAI through his AI startup xAI and a consortium of investors, including Palantir co-founder Jon Lonsdale. The offer was swiftly rejected by Altman, who posted on X, stating that, “no thank you but we will buy twitter for $9.74 billion if you want.”
OpenAI alleges Musk’s actions — including lawsuits, social media attacks, and demands for internal documents, are part of a broader strategy to destabilise the company and retaliate over its refusal to accept his takeover offer. It has asked the court to hold Musk accountable for the alleged damage already done and to prevent further attacks. A jury trial is expected to begin in spring 2026.
Musk previously sued OpenAI in 2023, accusing the company of abandoning its original mission of benefiting humanity by focusing instead on commercial partnerships, notably with Microsoft. Although he dropped that case in June, he filed a new one in August.
OpenAI maintains that its for-profit subsidiary is essential to raising the funds needed to build and deploy cutting-edge AI safely. The company recently closed a $40 billion funding round led by SoftBank and others, bringing its valuation to $300 billion. It says the money will go toward advancing AI research and expanding its infrastructure to aid the estimated 500 million weekly ChatGPT users.
The countersuit adds to a long list of corporate dramas surrounding OpenAI. In 2023, Altman was briefly ousted by the board for allegedly failing to be ‘candid in his communications,’ only to be reinstated days later after an employee revolt.
As OpenAI prepares for a legal showdown with its former co-founder, the case underscores the deepening rift at the heart of the AI industry’s race for dominance.
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