OpenAI countersues Elon Musk in legal dispute over ChatGPT
The OpenAI logo appears on a mobile phone in front of a screen showing part of the company website in this photo taken on Nov. 21, 2023 in New York.
OpenAI is suing Elon Musk for unfair competition and interfering with its business relationships with investors and customers, escalating a legal battle between the ChatGPT maker and the billionaire who helped bankroll the artificial intelligence startup a decade ago.
The allegations against Musk were filed Wednesday in a federal court in California as a counterclaim to the Tesla CEO's lawsuit against OpenAI, which is heading to a jury trial next year.
Legal Battle Escalates
Musk, an early OpenAI investor who now runs his own AI firm, xAI, along with Tesla, SpaceX, social media platform X and President Donald Trump's Department of Government Efficiency, began a legal offensive against OpenAI and its CEO Sam Altman more than a year ago. He first sued for breach of contract over what he said was the betrayal of its founding aims as a nonprofit research laboratory, and later expanded his claims.
A federal judge in March denied Musk’s request for a court order blocking OpenAI from converting itself to a for-profit company but said she could expedite a trial to consider Musk’s claims. She offered to hold a trial later this year, but it has been pushed back to March 2026.
Counterclaim Details
In this week's counterclaim, OpenAI accuses Musk of making a “sham bid” in February to buy a controlling stake in the nonprofit. Musk and a group of investors offered $97.4 billion for OpenAI's assets, a number that OpenAI said Musk pulled from the character 974 Praf in the science fiction novel “Look to Windward” by Scottish writer Iain Banks. Musk has also named some of his SpaceX machinery after ships in the book.
OpenAI said it “recognized the bid as a feint” but has repeatedly had to divert resources and “suffered harm as a result of Musk’s unlawful campaign of harassment, interference, and misinformation.”
Musk attorney Marc Toberoff responded in an email late Wednesday and said that if OpenAI's board of directors had “genuinely considered the bid, as they were obligated to do, they would have seen how serious it was.” "It’s telling that having to pay fair market value for OpenAI’s assets allegedly ‘interferes’ with their business plans,” Toberoff wrote.
The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP’s text archives.
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