Elon Musk has been through a string of court losses this year (1). His latest one also marks the bitter end of a long saga with his former business partner, OpenAI co-founder and rival AI developer, Sam Altman. The world’s richest man just had his suit against OpenAI thrown out. He alleged that Altman, among other defendants, broke a contract with him by pivoting OpenAI from a nonprofit to a for-profit company (2).
“It is not OK to steal a charity,” Musk said.
Musk and Altman used to be co-chairs of OpenAI, back in the beginning when it was still just a nonprofit organization (3). They announced their partnership in 2015; by the end of 2017, Musk had pulled funding for the project.
In his now-defeated lawsuit, Musk asked for $150 billion in damages — and for Altman specifically to be removed from the OpenAI board.
Here’s how their relationship went wrong, how that impacted the court case, and what Musk’s next steps will likely be.
Must Read
Musk left OpenAI because of an unsuccessful power play
Musk and Altman started OpenAI with one goal: Create a safe artificial intelligence lab (4). But it didn’t take long for Musk to develop another goal: Take over the organization.
During the trial, Musk said he was a key part of OpenAI’s initial success. “I came up with the idea, the name, recruited the key people, taught them everything I know, provided all the initial funding,” he said (3).
Musk wanted more control than he was initially given. In 2017, when OpenAI was struggling with funding and considering converting into a for-profit company, Musk wanted as high as 90% ownership in it, something Altman and other OpenAI founders were against; they were worried about him becoming a “dictator (4).”
In September 2017, Musk officially pulled funding from OpenAI.
“Guys, I’ve had enough. This is the final straw,” he said in an email to Altman and two other OpenAI co-founders. “Either go do something on your own or continue with OpenAI as a nonprofit. I will no longer fund OpenAI until you have made a firm commitment to stay or I’m just being a fool who is essentially providing free funding for you to create a startup.”
Musk later suggested incorporating OpenAI into Tesla, which would give him control over the company while providing much-needed funding. Altman declined and received funding from Microsoft instead (5).
Read More: Here’s the average income of Americans by age in 2026. Are you falling behind?
Musk’s timing for suing was suspicious — and disqualifying
Musk’s argument that OpenAI breached contract by opening a for-profit branch didn’t end up mattering much to the jury. Instead, the suit was thrown out because the jury ruled Musk hadn’t sued within the three-year statute of limitations for cases like this.
That might sound like losing on a technicality, but Musk’s timing could indicate that his suit wasn’t wholly motivated by his desire to keep OpenAI nonprofit. Both OpenAI and Musk’s AI company, xAI, are expected to go on the public market soon (6). xAI merged with SpaceX earlier this year.
Forcing OpenAI into the nonprofit space would essentially get rid of a key competitor to xAI.
OpenAI’s lead council, William Savitt, said Altman sent Musk a term sheet showing OpenAI planned on opening a for-profit branch back in 2018. Musk said he didn’t read it (2).
Musk isn’t giving up on the lawsuit
This isn’t the end of the Musk/Altman feud. Musk has said that he’s planning on appealing the court’s decision, which could bring the two back to court to relitigate Musk’s claims.
In an X post, Musk says the ruling was based on “a calendar technicality (7).”
“I will be filing an appeal with the Ninth Circuit, because creating a precedent to loot charities is incredibly destructive to charitable giving in America,” he said (8).
Additionally, there could be a second trial stage for this lawsuit over an unresolved claim that two Microsoft board members violated antitrust laws by also being OpenAI board members. The judge said it was unlikely the second stage would actually happen, though, because there’s plenty of competition still in that market.
You May Also Like
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
BBC (1), (7); The New York Times (2); CNBC (3), (6); The Wall Street Journal (4); Financial Post (5); X (8)
This article originally appeared on Moneywise.com under the title: The end of a bromance: How the love was lost – and a court case decided – between Sam Altman and Elon Musk
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Visited 1 times, 1 visit(s) today
