OpenAI Countersues Elon Musk over AI Governance and Harassment Claims

By Evans Momodu
Published 19:23


OpenAI files a countersuit against Elon Musk, accusing him of harassment and interference as legal tensions rise over AI firm governance and a $40B funding round.

OpenAI has filed a countersuit against Elon Musk, accusing the tech billionaire of engaging in a sustained campaign of harassment and legal interference.

The legal dispute—centred around OpenAI’s shift to a for-profit model—could shape the future of one of the world’s most influential artificial intelligence firms.

The countersuit, filed Wednesday in the US District Court for the Northern District of California, alleges Musk has employed “press attacks, malicious social media campaigns, pretextual legal demands, and a sham takeover bid” to undermine the company.

OpenAI is requesting that the court prohibit Musk from further disruptive actions and hold him accountable for the damage already inflicted.

The backdrop to this legal confrontation is OpenAI’s ongoing corporate transition. Originally launched as a nonprofit in 2015 by Musk and Sam Altman, OpenAI is in the process of evolving into a capped-profit entity—a necessary step to secure up to $40 billion in a current funding round. The transition must be completed by the end of the year.

Musk, who exited OpenAI before its commercial rise and later launched his own AI venture, xAI, in 2023, has challenged the legitimacy of OpenAI’s structural shift. He alleges the company has strayed from its original mission and has attempted to block the transition via legal action.

Musk’s legal team referenced a $97.4 billion unsolicited takeover bid led by the entrepreneur earlier this year. In a statement, attorney Marc Toberoff argued that OpenAI’s board had a fiduciary duty to evaluate the offer and that their rejection reflects a disregard for shareholder interests. “It’s telling that having to pay fair market value for OpenAI’s assets allegedly ‘interferes’ with their business plans,” Toberoff stated.

Despite the high-profile nature of the dispute, the matter is unlikely to reach resolution soon. A jury trial is scheduled for the spring of next year, keeping the spotlight on OpenAI’s governance and the broader legal and ethical frameworks shaping the future of artificial intelligence.
Source: CNN