Musk vs. Altman is here, and it’s going to get messy

Elon Musk cofounded OpenAI, and then flounced off in a huff when he wasn’t anointed CEO, leaving Sam Altman as the last power-hungry man standing. Now, Musk is back with a lawsuit, and a trial is scheduled to start in Oakland, California, on April 27th. Theoretically, it’s a legal case about whether OpenAI defrauded Musk. But that’s not really what we’re all doing here. This is about mess.

Musk vs. Altman is here, and it’s going to get messy

It’s all about the court of public opinion.

Over the past couple of years, Musk’s legal theories for punishing OpenAI have run the gamut from breach of contract to unfair business practices to false advertising. Now, he and Altman will be getting called to the stand at a particularly delicate time. Musk’s xAI, now a part of SpaceX, has filed for an initial public offering. OpenAI is rumored to be considering an IPO itself. There are only billions of dollars at stake.

And so naturally, there’s a lot of internal tech gossip coming to light. Questions about Elon’s “rhino ket” use won’t make it into the trial… but it’s in news stories because it showed up in the docket. We got excerpts from OpenAI President Greg “What will take me to $1B?” Brockman’s diary. Mark Zuckerberg, not involved in the litigation at all, has had several embarrassing texts made public, like allegedly telling Musk that he had Meta teams “on alert to take down content doxxing or threatening the people on your [DOGE] team,” weeks after claiming he refuses to moderate based on government requests. Also, Musk thinks Jeff Bezos “is a bit of a tool.”

Lawsuits appear to be Musk’s preferred alternative to therapy. Musk has sued perceived adversaries of his X social media platform, including a suit against a nonprofit that was dismissed as “baseless” and another against the firm that successfully made him follow through on his agreement to buy Twitter. Tesla and SpaceX are hotbeds of litigation. Let’s not go over the numerous family law matters that Musk is involved in due to his 14 known children.

Musk has actually filed four lawsuits against OpenAI. The first — for a breach of the founding agreement — was in state court, in 2024; Musk withdrew it immediately before a major hearing. We then got the current lawsuit, also filed in 2024, in which Musk alleged “Shakespearean” deceit. Several of its claims, including a laughable invocation of racketeering law, have been dismissed. Another suit, filed a year later, this time by xAI, accused Apple and OpenAI of engaging in anticompetitive behavior by making an agreement to exclusively put ChatGPT into iPhones. (The case is ongoing.) A fourth case accused OpenAI of poaching xAI employees and stealing trade secrets. It was dismissed.

“Since launching a competing artificial intelligence company, xAI, Musk has been trying to leverage the judicial system for an edge.”

In court starting next week, Musk will be making three main claims: that Altman and Brockman, et al., breached OpenAI’s charitable trust; that they participated in unjust enrichment (at Musk’s expense); and that they committed fraud. His lawyer will tell a jury that he was duped into giving OpenAI money on terms that Altman and Brockman didn’t live up to. Among other things, he’s demanding that Altman and Brockman be removed from their company roles, that OpenAI be required to award a certain amount of money to its nonprofit, and that it cease operating in its current structure as a public benefit corporation.

OpenAI has countered that Musk failed to prove that Altman and Brockman ever made him a “cognizable promise” that could amount to unlawful activity, and that he lacks the standing for some claims, among other objections. It’s pointed out that Musk could have intervened in the company’s 2025 recapitalization in the time between OpenAI filing and its review by two attorneys general, and he did not. “This suit is the latest move in Elon Musk’s increasingly blusterous campaign to harass OpenAI for his own competitive advantage,” OpenAI wrote in one filing. “Since launching a competing artificial intelligence company, xAI, Musk has been trying to leverage the judicial system for an edge. The effort should fail.”

In court, OpenAI could argue that it engaged in self-help — such as starting its for-profit arm — because Musk left it in the lurch when he pulled promised funding from the nonprofit, says Peter Molk, a professor of law at the University of Florida. But that may not be enough to protect OpenAI. “My walking away doesn’t mean you can break any agreement we have,” Molk says. Musk may argue that OpenAI should have brought him to court and forced him to pay up. Of course, if OpenAI had done that, it likely would have gone bankrupt.

The details that come out in the trial about OpenAI “will absolutely change its reputation, if it’s still trying to claim it’s doing this in some high-minded, ‘we want to make AI safe for humanity’ way,” said Deven Desai, a professor of business law and ethics at the Georgia Institute of Technology. “The court documents and testimonies will make it harder and harder for OpenAI to keep claiming that’s what it’s about.”

”I think at this point OpenAI has the leverage to ask for a soft promise for new investors not to invest in competitors.”

Since this lawsuit was initially filed, OpenAI’s reputation has cratered. Besides the assorted lawsuits from people who say ChatGPT encouraged loved ones’ suicides, constant exec reshuffling, and the dominance of Anthropic’s enterprise product have significantly cooled enthusiasm for the company. And there’s always the question of whether OpenAI, one of the most expensive startups ever, will make a profit that meets investors’ expectations.

Already, we’ve found out that Sutskever and others were worried about the success of Stability AI, a then-competitor open-source lab. Sutskever also felt “betrayed” by Reid Hoffman, an early investor, founding his own AI lab; in response, Altman said, “I think at this point OpenAI has the leverage to ask for a soft promise for new investors not to invest in competitors.” Altman also didn’t tell the board he was personally running an OpenAI VC fund, according to a deposition of former board member Helen Toner.

Some of the damages Musk is calling for in his lawsuit — like the demands to unseat executives and change the company’s business structure — are likely unrealistic. State attorneys general from California and Delaware both blessed OpenAI’s restructuring. But Georgia Tech’s Desai says that even if the federal court doesn’t move to act on such requests, Musk might still get what he wants. The suit could do real damage, especially ahead of OpenAI’s impending IPO, and amid some shareholders reportedly questioning if Altman is the person to lead the company during that process — especially as allegations of his untrustworthiness and manipulative behavior resurface.