Elon Musk’s lawsuit against OpenAI will proceed to trial, further escalating his years-long feud with the company and its CEO, Sam Altman.
“We appreciate the Court’s thorough and fair consideration and look forward to trial,” Musk’s lead counsel, Marc Toberoff, told CNBC’s David Faber Thursday in a statement following a hearing with U.S. District Judge Yvonne Gonzalez Rogers.
Musk and Altman co-founded OpenAI as a non-profit research company alongside several other researchers and executives in 2015. Musk departed from OpenAI’s board in 2018.
In the lawsuit, Musk alleged he agreed to start the company because he was promised that it would “chart a safer, more open course than profit-driven tech giants,” according to a complaint.
“The hearing confirms what we’ve maintained from the outset—there is substantial evidence that OpenAI’s leadership made knowingly false assurances to Mr. Musk about its charitable mission that they never honored in favor of their personal self-enrichment,” Toberoff said.
OpenAI has repeatedly denied the claims, and lawyers for the company have filed a motion to dismiss the case.
The Tesla CEO alleges in the suit that he was “assiduously manipulated” and “deceived” after OpenAI established an “opaque web of for-profit OpenAI affiliates,” including its multi-billion dollar partnership with Microsoft, and explored converting to a for-profit entity, the filing states.
He claimed Altman and the other defendants have been “unjustly enriched to the tune of billions of dollars in value.”
A spokesperson for OpenAI said Thursday that Musk’s lawsuit “continues to be baseless and a part of his ongoing pattern of harassment.”
“We remain focused on empowering the OpenAI Foundation, which is already one of the best resourced nonprofits ever,” the spokesperson said.
Gonzalez Rogers said Wednesday that the case would head to trial, according to the Associated Press. The judge said she still needed to determine some of the logistics as to how that trial will be set up.
Microsoft is also named as a defendant in the lawsuit, as Musk alleges the company aided and abetted OpenAI’s breach of fiduciary duty. A representative for Microsoft did not immediately respond to CNBC’s request for comment.
The lawsuit was filed in August of 2024 in the U.S. District Court in the Northern District of California.
Elon Musk attends the U.S.-Saudi Investment Forum in Washington, D.C., U.S., November 19, 2025.
Evelyn Hockstein | Reuters
In 2024, OpenAI announced plans to convert into a for-profit company, which would have wrested control from the nonprofit and kept it as a separate arm. After facing pressure from civic leaders and ex-employees, OpenAI said its nonprofit would retain control.
The startup announced it completed its recapitalization in October, cementing its structure as a nonprofit with a controlling stake in its for-profit business.
As part of that recapitalization, Microsoft holds an investment in OpenAI’s for-profit arm valued at around $135 billion.
Musk has long warned about the potential dangers of artificial intelligence and the risks it could pose for humanity, and launched his own AI company called xAI in 2023. He competes directly with OpenAI, Google, Anthropic and other AI players.
xAI started as a for-profit, “benefit corporation” with an obligation to deliver environmental and social benefits through its work. The company dropped that obligation and its benefit corp. status in 2025 when Musk merged xAI with his social network X.
Musk has come under fire in recent weeks after the company’s chatbot and image generator, Grok, allowed users to easily create and share what’s known as “deepfake porn,” or nonconsensual intimate images of real-life women, and AI-generated images depicting child sexual abuse.
X and xAI are facing regulatory probes over the images by the European Commission, India, Malaysia and Australia.
–CNBC’s Lora Kolodny contributed to this report
WATCH: Musk, Altman rivalry escalates with new OpenAI hire
