OpenAI files lawsuit against Elon Musk, alleging 'Bad-faith tactics'

New Delhi: OpenAI, the artificial intelligence research organisation behind ChatGPT, has filed a countersuit against billionaire entrepreneur Elon Musk, accusing him of employing "bad-faith tactics" to undermine the company’s progress and seize control of cutting-edge AI technology. 

The legal action, filed in a California federal court, escalates a long-simmering rivalry between OpenAI and Musk, a co-founder of the organisation who parted ways with it years ago.

As per the news reports, the lawsuit claims Musk has engaged in a "relentless campaign" to harm OpenAI’s operations, citing actions such as public attacks, a $97.4 billion unsolicited takeover bid described as a "sham," and efforts to disrupt the company’s fundraising. 

OpenAI alleges these moves were designed to slow its advancements in AI development and bolster Musk’s own AI venture, xAI, which competes directly with OpenAI.

“Elon’s nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit,” OpenAI stated in a post on X, the social media platform owned by Musk. 

The company further accused Musk of spreading misinformation and attempting to destabilise its relationships with investors, partners, and employees.

The legal battle stems from Musk’s earlier lawsuit against OpenAI and its CEO, Sam Altman, filed last year. In that case, Musk argued that OpenAI had deviated from its original nonprofit mission to develop AI for the benefit of humanity, instead prioritising corporate profit. Musk’s suit sought to block OpenAI’s transition to a for-profit structure, a move the company says is critical to securing the capital needed to compete in the costly AI race. OpenAI’s valuation recently soared to $300 billion following a $40 billion funding round led by SoftBank.

OpenAI’s countersuit paints a different picture, alleging that Musk himself pushed for a for-profit model during his time with the organisation. The filing includes internal emails purportedly showing Musk advocating for OpenAI to abandon its nonprofit status, take majority equity, and appoint him as CEO in 2017. 

“These antics are just history on repeat—Elon being all about Elon,” OpenAI’s legal team wrote, suggesting Musk’s actions reflect personal ambition rather than concern for the public good.

A focal point of the lawsuit is Musk’s $97.4 billion takeover bid earlier this year, which OpenAI claims was never serious. The company alleges the offer lacked credible financing and included references to Musk’s favourite sci-fi novels, suggesting it was more a publicity stunt than a legitimate proposal. Musk’s attorney, Marc Toberoff, defended the bid, stating, “Had OpenAI’s board genuinely considered the bid, as they were obligated to do, they would have seen how serious it was.”

The feud between Musk and OpenAI has deep roots. Musk co-founded OpenAI in 2015 alongside Altman and others, contributing significant funding to its early efforts. However, he left the organisation in 2018 after disagreements over its direction. Since then, Musk has launched xAI, which recently acquired X, his social media platform, in a deal valuing the combined entity at over $100 billion, though it lags behind OpenAI in market impact.

OpenAI’s lawsuit seeks an injunction to prevent Musk from further interfering with its operations and demands compensatory and punitive damages for the harm allegedly caused. The case is set to proceed to a jury trial in spring 2026, promising a high-profile showdown between two titans of the tech industry.