Elon Musk Accuses Altman of Contract Breach; Proceeds with Lawsuit Against OpenAI
Dubela, Chhoyee Ghosh: OpenAI, the company behind ChatGPT, has reversed its earlier plan to shift control from its non-profit arm to its for-profit arm. This move prompted Elon Musk to proceed with his lawsuit against the company, according to his lawyer, Marc Toberoff. The trial is scheduled for March 2026.
Elon Musk co-founded OpenAI in 2015 but left in 2018 after disagreements with CEO Sam Altman. Since then, Musk has accused Altman and OpenAI’s president, Greg Brockman, of breach of contract and fraud. In December 2023, a proposal was made to restructure OpenAI’s for-profit arm into a Public Benefit Corporation (PBC). Under this plan, the non-profit parent would become a major shareholder in the PBC but would lose control.
However, on Monday, CEO Sam Altman clarified that OpenAI was founded as a non-profit, and currently, its non-profit arm still controls and oversees the for-profit side. In a blog post, he confirmed that this structure will remain. He further explained that OpenAI aims to provide powerful tools to the public and supports users’ freedom in how they use them. Altman also noted that while they will move forward with the PBC model to raise more capital, they will not give up control of the non-profit arm.
Bret Taylor, chair of OpenAI’s board, added that this decision was made after discussions with the Attorneys General of California and Delaware. Following this announcement, Elon Musk filed a complaint in California, claiming OpenAI abandoned its original mission once its technology neared Artificial General Intelligence (AGI). He accused Sam Altman and others of using the company for personal gain and “self-enrichment.”
Biographer Walter Isaacson later revealed details about Musk’s fallout with Altman. He said Musk once proposed merging OpenAI with Tesla, but the board rejected the idea, which led to Musk’s eventual departure. Musk has since launched competing AI initiatives at Tesla and started new ventures like Neuralink and xAI. Despite the legal issues, OpenAI continues to focus on its growth. Reports suggest the company is planning to raise up to $40 billion in capital, led by Japan’s SoftBank.
