Elon Musk’s lawsuit against OpenAI will proceed to court, further escalating his long-standing feud with the company and its CEO Sam Altman.
“We appreciate the court’s thorough and fair consideration and look forward to trial,” Mark Toberoff, Musk’s lead attorney, told CNBC’s David Faber in a statement Thursday after a hearing with U.S. District Judge Yvonne Gonzalez Rogers.
Musk and Altman co-founded OpenAI as a nonprofit research company in 2015 with several other researchers and executives. Musk resigned from OpenAI’s board in 2018 after convincing Altman to let him run the auto business. teslaacquires an AI nonprofit.
Musk claimed in his lawsuit that he agreed to form the company because it promised to “chart a safer and more open path than the profit-driven tech giants,” according to the complaint.
“The hearing confirms what we have maintained from the beginning: There is substantial evidence that OpenAI’s leadership made knowingly false assurances to Mr. Musk about its philanthropic activities that were never honored in favor of personal self-interest,” Toberoff said.
OpenAI has repeatedly denied the allegations, and its lawyers have filed a motion to dismiss the lawsuit.
Tesla’s CEO claims in the lawsuit that he was “relentlessly manipulated” and “deceived” after OpenAI established “an opaque web of for-profit OpenAI affiliates” that included a multibillion-dollar partnership with the company. microsoftThe application states that the company considered converting it into a for-profit entity.
He alleged that Altman and the other defendants “obtained billions of dollars worth of ill-gotten wealth.”
An OpenAI spokesperson said Thursday that Musk’s lawsuit “remains baseless and part of an ongoing pattern of harassment by Musk.”
“We remain focused on empowering the OpenAI Foundation, which is already one of the most resourced nonprofit organizations in history,” a spokesperson said.
Gonzalez-Rogers said Wednesday the case will head to trial, according to the Associated Press. The judge said some of the logistics of how the trial would be set up still needed to be determined.
Microsoft is also named as a defendant in the suit, as Musk alleges that the company aided and abetted OpenAI’s breach of fiduciary duty. A Microsoft representative did not immediately respond to CNBC’s request for comment.
The lawsuit was filed in August 2024 in the U.S. District Court for the Northern District of California.
Elon Musk attended the US-Saudi Investment Forum held in Washington on November 19, 2025.
Evelyn HochsteinReuter
In 2024, OpenAI announced plans to become a for-profit company, taking control from the nonprofit organization and keeping it as an independent arm. After facing pressure from civic leaders and former employees, OpenAI said the nonprofit would retain control.
The startup announced in October that it had completed a recapitalization and strengthened its structure as a nonprofit organization with control of the for-profit business.
As part of the recapitalization, Microsoft is making an investment worth approximately $135 billion in OpenAI’s commercial arm.
Musk has long warned about the potential dangers of artificial intelligence and the risks it could pose to humanity, and in 2023 he launched his own AI company called xAI. He is in direct competition with OpenAI. googleAnthropic and other AI players.
XAI began as a for-profit “charitable corporation” with a duty to provide environmental and social benefits through its operations. In 2025, when Musk merged xAI with his social network X, the company dropped its mandate and status as a benefit corporation.
Musk has come under fire in recent weeks after his company’s chatbot and image generator Grok made it easy for users to create and share so-called “deepfake pornography,” including non-consensual intimate images of real women and AI-generated images depicting child sexual abuse.
X and xAI are facing regulatory investigations over the images by the European Commission, India, Malaysia and Australia.
—CNBC’s Lora Kolodny contributed to this report
Attention: New hire of OpenAI intensifies conflict between Musk and Altman
