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Elon Musk is seeking a jaw-dropping $134 billion and more in damages from OpenAI and its investor Microsoft for allegedly defrauding him by shifting OpenAI’s corporate structure from a non-profit to a for-profit. But, via an amendment on Tuesday, Musk asked for the damages to be awarded to OpenAI’s non-profit arm instead.
Per the amendment, Musk also wants both OpenAI CEO Sam Altman and President Greg Brockman to be ousted and for the two executives to hand over “all equity and other personal financial benefits they obtained as a result of OpenAI’s for-profit operations” to the OpenAI charity.
Musk was a co-founder and major early investor in OpenAI when the AI giant began as a nonprofit AI lab in 2015. Musk and OpenAI eventually fell out, an event which saw Musk leave the company and later create OpenAI competitor xAI in 2023. Via xAI, Musk made an unsolicited bid to acquire OpenAI for $97.4 billion in February 2025.
After Musk left, OpenAI changed its corporate structure, first from a non-profit to a “capped” for-profit in 2019, and ultimately into a for-profit public benefit corporation late last year. The company is now reportedly seeking an IPO as early as the fourth quarter of this year, just a few months after Musk’s newly-merged xAI and SpaceX aims to make its market debut.
Musk is now claiming that he was manipulated into thinking he gave money to launch a non-profit when the plan all along was to go for-profit.
“Defendants pocketed the benefits of that charitable status — tax exemptions, donor contributions, and the reputational credibility of a public-benefit mission — while secretly planning, and ultimately executing, a wholesale conversion of OpenAI into a for-profit enterprise that, along with profligate self-dealing, was designed to generate extraordinary personal wealth for Altman, Brockman, Microsoft, and other investors,” the lawsuit claims.
He is now asking the court to “unwind” the for-profit conversion and restructuring, and return the funds to the non-profit. OpenAI denies the allegations.
“The remedies Musk intends to seek are strictly tied to his purpose in bringing this lawsuit: to prevent the subordination of a public charity — one he co-founded and for which he was the primary supporter during its formative years — to private, for-profit interests,” the amendment says.
But, according to the findings of a New Yorker investigation published on Monday, Musk was involved in discussions about reconstituting OpenAI as a for-profit company as early as September 2017, and he had demanded majority control of any for-profit structure.
The case, which has been a tedious legal dispute between the parties, will go to trial later this month. Both parties are upping the ante in the run-up to the showdown in court. On Monday, OpenAI sent a letter to the attorneys general of Delaware and California asking them to investigate Musk and fellow competitor Meta for “improper and anti-competitive behavior.”
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An $852 billion company, ladies and gentlemen.
The letter to the attorneys general of Delaware and California asks for an investigation into Musk.
"I think there's a small but real chance he's eventually remembered as a Bernie Madoff- or Sam Bankman-Fried-level scammer."
The company behind ChatGPT announced a set of policy recommendations for the AI era including taxes on automated labor and a public wealth fund.
It gave the leader of a nonprofit involved with it "a very grimy feeling."
The IPO is expected in June and could be the largest IPO in history.
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Source: Gizmodo