Elon Musk Takes on OpenAI and Microsoft in Renewed Legal Battle

Elon Musk has reignited his clash with OpenAI, the artificial intelligence company he co-founded, by filing a fresh legal complaint that now includes Microsoft and LinkedIn co-founder Reid Hoffman as defendants. The revised lawsuit, submitted to a California court on Thursday, accuses OpenAI and Microsoft of monopolizing the AI industry, stifling competition, and straying far from the original nonprofit vision Musk helped establish in 2015.

At the heart of Musk’s grievance is his belief that OpenAI, once focused on advancing artificial intelligence for the greater good, has transformed into a powerful for-profit entity. According to the lawsuit, OpenAI has become a “$157 billion for-profit, market-paralyzing gorgon,” leveraging its partnership with Microsoft to dominate the industry and shut out competitors, including Musk’s own AI company, xAI.

A Fallout Years in the Making

In 2015, Musk teamed up with other tech luminaries to create OpenAI, with a mission to build artificial general intelligence (AGI)—AI that can perform any task a human is capable of. The company was founded as a nonprofit, with a strong emphasis on transparency and public benefit.

But in 2019, OpenAI pivoted to a “capped profit” model, enabling it to raise funds from investors while maintaining some nonprofit principles. This shift attracted significant investment, with Microsoft stepping in as a key partner. Microsoft initially invested $1 billion, later expanding its commitment to billions more in a multi-year deal by 2023.

Musk has been vocal about his dissatisfaction with this transition. In a previous lawsuit filed earlier this year, he alleged that OpenAI had become a “closed-source de facto subsidiary” of Microsoft, betraying its original mission.