Elon Musk reportedly wanted OpenAI to be a for-profit entity but has now sued to block the move

Elon Musk has taken legal action to prevent OpenAI from transitioning into a for-profit entity, accusing the organization of abandoning its founding mission. Now, OpenAI is firing back, claiming that Musk is trying to damage the company to set it back and benefit his xAI, a competing AI venture. Also, according to the New York Times, OpenAI claims that Musk wanted to transform OpenAI into a for-profit company and gain financially.

“I believe pretty strongly that Elon will do the right thing and that it would be profoundly un-American to use political power to the degree that Elon would hurt competitors and advantage his own businesses,” Altman told the New York Times.

Sam Altman. Greg Brockman, Ilya Sutskever, and Elon Musk co-founded OpenAI in 2015 to advance artificial intelligence responsibly for the benefit of the public. Musk then left the organization in 2018, claiming that OpenAI founders Sam Altman and Greg Brockman violated the nonprofit’s principles by forming a multibillion-dollar partnership with Microsoft. Musk alleges this prioritizes profits over public good, which breaches the company’s original purpose.

After launching its highly successful ChatGPT in late 2022 and partnering with various commercial companies, OpenAI became a for-profit organization.

In March, Musk filed a lawsuit in federal court accusing OpenAI of violating its founding principles. He has since expanded his claims and requested a preliminary injunction to halt OpenAI’s planned restructuring, separating its nonprofit governance from its operational decisions. Musk also amended his lawsuit in November to include Microsoft as a defendant, accusing the company of steering OpenAI’s priorities toward commercialization.

Since Musk now runs a competitive entity, OpenAI called his claims self-serving and disruptive to its development plans. One of OpenAI’s arguments is that Musk had previously advocated for the organization to adopt a for-profit structure.

According to NYT, the company presented evidence that in 2017, Jared Birchall, head of Musk’s family office, registered a company intended to be a for-profit version of OpenAI. Documents and text messages revealed that Musk sought a 50% to 60% equity stake in the proposed entity, which he claimed was necessary to finance an $80 billion Mars colonization project.

Additionally, OpenAI alleges that Musk sought personal financial gain through equity compensation in the new structure. These claims were supported by messages from Shivon Zilis, an early board member and liaison to Musk. Zilis is also the mother of at least three of Musk’s children. She did not comment to the NYT.

Despite the escalating conflict, Sam Altman expressed sadness over the fallout with Musk and stated that he trusts Musk to act ethically now that he has political influence as an advisor to the Trump administration.