OpenAI sues Elon Musk claiming ‘bad-faith tactics’

OpenAI is suing Elon Musk over claims he has tried “nonstop” to slow down its business for his own benefit.

The company accuses the Tesla boss of using “bad-faith tactics” against OpenAI to help him control cutting-edge AI technology.

Mr Musk sued OpenAI chief executive Sam Altman last year in a bid to stop him from changing its corporate structure. He co-founded OpenAI with Mr Altman but left several years ago.

The countersuit opens up a new front in the high-stakes – and long-running – battle between two Silicon Valley heavyweights, who both say they are acting in the best interests of OpenAI and the public.

“Elon’s nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit,” OpenAI said in a statement on Wednesday. “Today, we countersued to stop him.”

Last week, a federal judge in Oakland, California, set a March 2026 trial date in Mr Musk’s suit in a bid to fast-track the legal fight.

US District Judge Yvonne Gonzalez Rogers previously declined to grant Mr Musk an injunction that would temporarily halt OpenAI’s conversion from a non-profit to a for-profit company.

She also said that she expected Mr Musk to give evidence in the case.

Mr Musk alleges that OpenAI strayed from its founding mission as a non-profit to develop AI for the benefit of humanity and is therefore in breach of contract.

He left the company in 2018.

“This is about control. This is about revenue. It’s basically about one person saying, ‘I want control of that start-up’,” said Ari Lightman, professor of digital media and marketing at Carnegie Mellon University.

Lightman said it has been a distraction from making AI safe and equitable.

“That takes a backseat with all this rigmarole over control and monetization,” Lightman said.

OpenAI claims Mr Musk has “been spreading false information about us,” in a X post on Wednesday, adding “Elon’s never been about the mission. He’s always been about his own agenda.”

Musk’s xAI is a competitor to OpenAI, but has so far lagged behind. Last month, xAI acquired Musk’s social media platform X – formerly Twitter.

Mr Musk claims the combined company, XAI Holdings, is valued at more than $100 billion.

In February, Mr Musk made an unsolicited bid for OpenAI, offering to buy it for $97.4 billion, which Mr Altman rejected by posting: “no thank you but we will buy twitter for $9.74 billion if you want.”

In a statement to the BBC, Mr Musk’s lawyer Marc Toberoff said: “Had OpenAI’s Board genuinely considered the bid, as they were obligated to do, they would have seen just how serious it was.”

“It’s apparent they prefer to negotiate with themselves on both sides of the table than engage in a bona fide transaction in the best interests of the charity and the public,” Mr Toberoff added.