A U.S. judge has ruled that Elon Musk’s lawsuit against OpenAI will proceed to trial, citing evidence that supports Musk’s claims that the company departed from its original nonprofit commitments.
Lawsuit Centers On OpenAI’s Shift Toward Profit
Elon Musk sued OpenAI and its co-founders Sam Altman and Greg Brockman in 2024. The lawsuit alleges that OpenAI violated its original contractual agreements by prioritizing profit over its founding mission to develop artificial intelligence that benefits humanity.
Musk was an early financial backer and co-founder of OpenAI, which launched in 2015 as a nonprofit research organization. He later resigned from OpenAI’s board in 2018 after other co-founders rejected his bid to become chief executive and instead appointed Altman to the role. At the time, Musk cited potential conflicts of interest with Tesla and its work on self-driving technology.
Dispute Follows OpenAI’s Structural Changes
After leaving OpenAI, Musk became an outspoken critic of the organization’s move toward a for-profit structure. In February 2025, he made an unsolicited $97.4 billion offer to acquire OpenAI, which Altman rejected.
OpenAI began shifting away from its nonprofit-only structure in 2019 by creating a for-profit subsidiary with a capped-profit model that limited investor returns. The company said the structure was intended to support fundraising needs and help recruit technical talent as development costs increased.
Musk’s lawsuit did not prevent OpenAI from completing its restructuring. In October 2025, OpenAI finalized its conversion, with the for-profit arm becoming a Public Benefit Corporation. Under the new arrangement, the original nonprofit retained a 26 percent equity stake.
Claims Of Financial Harm And Damages
Musk is now seeking monetary damages, arguing that OpenAI generated what he describes as ill-gotten gains. He says he invested approximately $38 million in early funding and contributed guidance and credibility based on assurances that OpenAI would remain a nonprofit organization.
An OpenAI spokesperson told TechCrunch that Musk’s lawsuit is baseless and part of an ongoing pattern of harassment.
Judge Cites Evidence Supporting Musk’s Allegations
U.S. District Judge Yvonne Gonzalez Rogers said her decision to send the case to trial was based on evidence indicating that OpenAI’s leadership made assurances that the company would maintain its original nonprofit structure, as Musk claims.
A jury trial has been tentatively scheduled for March.
Featured image credits: Bret Hartman via flickr
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