OpenAI, the maker of ChatGPT, has escalated its ongoing legal battle with Elon Musk, accusing the billionaire of launching a “campaign of harassment” designed to destroy the company. In a countersuit filed in a California district court, OpenAI alleges that Musk’s actions, including “harassing legal claims and a sham bid,” have caused significant harm to the company.
The legal drama follows Musk’s ongoing criticism of OpenAI, the artificial intelligence research lab he co-founded with Sam Altman in 2015, before stepping down from the organization in 2018. Musk’s departure from OpenAI was followed by Altman’s ascension as the company’s CEO, and since then, Musk has repeatedly criticized the company for deviating from its original charitable mission. He specifically targets OpenAI’s conversion into a for-profit subsidiary, which sought to raise capital from major investors, including Microsoft.
The latest flare-up occurred after Musk launched a high-profile, $97.4 billion bid for the non-profit entity that controls OpenAI. In February, Musk announced the offer through his social media platform, X, which he acquired in 2022. However, OpenAI rejected the bid, with Altman responding publicly, stating, “No thank you, but we will buy Twitter for $9.74 billion if you want,” in a reference to the perceived drop in Twitter’s valuation since Musk’s acquisition.
According to OpenAI’s court documents, Musk’s offer was a “fake takeover bid designed to disrupt OpenAI’s future.” The company argues that the mere existence of the offer, and the media firestorm it generated, diverted critical resources away from its mission. OpenAI further claims that Musk’s actions are part of a broader strategy to harm its economic relationships and undermine its future prospects.
OpenAI has asked the court to stop Musk from making “further unlawful and unfair actions,” and to hold him “responsible for the damage he has already caused.” The company’s filings emphasize that Musk’s efforts to block OpenAI’s for-profit transformation and his legal challenges are not only a distraction but also a direct threat to the company’s ability to pursue its AI research goals. OpenAI claims that the campaign of interference could “significantly impair” its ability to advance its mission and achieve its business goals.
In response to the turmoil, OpenAI has reported that it is on track to lose $5 billion this year, with losses expected to escalate to $14 billion annually by 2026. Despite these setbacks, the company recently closed a $40 billion funding round, led by Japanese investment giant SoftBank, bringing OpenAI’s total valuation to an impressive $300 billion. The company has expressed plans to use this funding to push the boundaries of AI research, scale its infrastructure, and expand its toolset, which is already used by 500 million people weekly.
OpenAI’s legal team argues that Musk’s actions, including the “misinformation” surrounding the attempted takeover, have led to confusion, ultimately damaging the company’s reputation and disrupting critical business negotiations. The company’s lawsuit frames Musk as a disruptive force whose involvement could undermine OpenAI’s relationships with investors and other partners.
