OpenAI Challenges Musk's Lawsuit, Reveals 2017 Profit Talks

What Happened: OpenAI has responded to Elon Musk's legal efforts to prevent its transition to a fully for-profit structure, accusing the billionaire of undermining the company after failing to gain control during earlier negotiations.

In a recent blog post, OpenAI revealed that Musk had initially supported restructuring the organization into a for-profit entity in 2017 but abandoned the idea when his proposal to hold majority control was rejected. "[Musk] walked away and told us we would fail," OpenAI stated, CNBC reports.

The dispute stems from Musk's broader critique of OpenAI, which he co-founded, and its growing relationship with Microsoft Corp. MSFT. Musk has filed for a court injunction, claiming the company's shift betrays its original nonprofit mission.

Musk's complaints also allege that Microsoft benefits from restricted access to advanced AI models while stifling competition. He voiced concerns about monopolistic behavior in the industry, which have been central to his ongoing legal disputes with OpenAI and Microsoft.

Also Read: Fed’s December Meeting Could Crush Rate Cut Optimism For 2025

OpenAI, however, maintains that the transformation aligns with its mission of advancing artificial intelligence responsibly, while remaining competitive in an evolving market.

Why It Matters: Musk's criticisms highlight growing tension within the AI industry as organizations navigate commercial pressures and ethical concerns. OpenAI has become a dominant force in generative AI, valued at $157 billion and attracting substantial investments, including $14 billion from Microsoft.

Musk, meanwhile, has positioned his own venture, xAI, as a rival, raising billions and launching its Grok chatbot. The unfolding legal battle underscores the high stakes in a sector expected to reach $1 trillion in revenue within a decade.

Read Next:

• Tesla’s 76% Post-Trump Rally: Bullish Run Or Signal To Cash Out?

Photo: Shutterstock