Musk-Altman rift widens as judge approves court battle
OpenAI and Microsoft have lost their final bid to avoid a courtroom battle with Elon Musk, with a US judge ruling that the Tesla and xAI founder can proceed to trial over claims that the start-up breached its original charitable mission.
The case, set for a jury trial in late April at the District Court in the Northern District of California, stems from Musk’s claim that OpenAI abandoned its founding principles when it accepted billions of dollars from Microsoft and transitioned toward a profit-oriented model.
Musk, who helped launch OpenAI in 2015 and donated $38m to the firm, contends that his contributions were tied to two non-negotiable conditions.
The first was that the company would remain nonprofit, and the second was that its technology would be open source.
“Musk’s lawsuit continues to be baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating this at trial,” OpenAI said in a statement.
It added that it remains “focused on empowering the OpenAI Foundation, which is already one of the best-resourced nonprofits ever.”
Internal emails under review
The ruling hinges in part on internal communications from 2017.
In a September email cited by Oakland Judge Yvonne Gonzalez Rogers, board member Shivon Zilis informed Musk that co-founder Greg Brockman wished to maintain the nonprofit structure.
Yet just two months later, Brockman privately noted: “Cannot say that we are committed to the non-profit. Don’t want to say that we’re committed. If three months later we’re doing b-corp, then it was a lie”.
“This confirms there is substantial evidence that OpenAI’s leadership made knowingly false assurances to Musk about its charitable mission that they never honoured in favour of their personal self-enrichment,” said Musk’s lawyer, Marc Toberoff.
The judge’s decision also allows Musk to pursue claims against Microsoft, with the court acknowledging evidence suggesting the tech giant may have known about OpenAI’s shift away from its original charitable commitments.
But the judge dismissed Musk’s claim that Microsoft was unjustly enriched, citing a lack of contractual relationship and supporting evidence.
Microsoft, which received a 27 per cent ownership stake as part of OpenAI’s October 2025 restructuring, has not publicly commented on the ruling.
The transaction preserved control of the company’s nonprofit arm while enabling OpenAI to operate as a public benefit corporation, fulfilling chief executive Sam Altman’s long-held objective.
Years of feud in the works
The trial represents the latest chapter in a bitter rivalry between former collaborators.
Musk, who departed OpenAI’s board in 2018, went on to found xAI in 2023, directly competing with his former start-up.
Last year, OpenAI rejected Musk’s unsolicited $97.4bn offer to acquire its nonprofit assets, further escalating tensions.
Altman has criticised Musk’s litigation as “weaponisation of the legal system to slow down a competitor,” while Musk maintains that the AI giant misled him and others over its nonprofit commitments.
As the legal battle looms, OpenAI has warned investors that Musk is likely to present “deliberately outlandish, attention-grabbing claims” at trial, while emphasising confidence in its legal defence.
The trial is scheduled to continue into late May, with a decision to follow. The judge will deliver a verdict that could reshape not only the future of OpenAI but also the broader landscape of AI governance and corporate accountability.