It had seemed earlier like Elon Musk’s dogged, seemingly vengeful pursuit of OpenAI, which he co-founded, over its swerve toward being a for-profit enterprise, wasn’t going anywhere. But a ruling from judge on Thursday points to the parties heading to a trial sometime this year.
In October, the state of California gave OpenAI a pass to move forward with a restructuring plan that will turn it into a for-profit public benefit corporation, with its nonprofit arm, the OpenAI Foundation, controlling all for-profit operations. The restructuring was necessary in part for OpenAI to attract investors and look toward an ultimate IPO, but almost as soon as the idea of the for-profit entity was made public, Elon Musk filed his lawsuit, claiming the OpenAI had abandoned its original professed mission to develop AI “for the benefit of humanity broadly.”
This holier-than-thou stuff is all kind of laughable given that Musk’s AI enterprise, xAI, has been spouting off pro-Hitler rhetoric in the last year, parroting Musk’s own disinformation about a “white genocide” in South Africa, and more recently, promulgating non-consensual sexualized images of women and minors — prompting a global outcry and multiple government investigations.
But in any event, the lawsuit, originally filed nearly two years ago in Superior Court in San Francisco but now in federal court in Oakland, can go forward after US District Judge Yvonne Gonzalez Rogers ruled Thursday against a motion to dismiss by OpenAI. As Bloomberg reports, Rogers found that a claim by OpenAI that Musk lacked standing to sue, because he used an intermediary to donate $38 million in seed funding to the startup, was spurious. And she refused to dismiss fraud allegations made by Musk regarding the actions and intentions of OpenAI’s executives — citing email evidence that, among others, OpenAI co-founder Greg Brockman was talking back in late 2017 about abandoning the non-profit structure.
OpenAI, directly after Musk filed his original lawsuit, published email communications showing that Musk endorsed the for-profit venture at the time — and suggesting that he was only suing now because of OpenAI’s success.
One email from Musk in December 2018 stated, “Even raising several hundred million won’t be enough. This needs billions per year immediately or forget it.”
Musk’s suit also pertains to the original intent of being open-sourced with OpenAI’s code. But OpenAI cited an email from co-founder Ilya Sutskever to Musk in which he said, “As we get closer to building AI, it will make sense to start being less open. The Open in openAI means that everyone should benefit from the fruits of AI after its built, but it’s totally OK to not share the science.”
Musk replied to that at the time with a simple, “Yup.”
Judge Rogers said in her decision that it would be up to a jury to find whether Microsoft had any foreknowlege role in OpenAI violating charitable laws. “Here, Musk identified considerable evidence raising a triable issue of fact that Microsoft had actual knowledge beyond vague suspicion of wrongdoing,” Rogers writes.
Musk’s vendetta against OpenAI doesn’t end here. He’s also separately suing over a partnership deal between Apple and OpenAI, and as recently as late October Musk was publicly accusing OpenAI of murdering a former engineer and whistleblower whose death has been conclusively ruled a suicide.
Also, last April, OpenAI asked a federal court to order Musk to stop publicly bad-mouthing them, saying it was doing harm to the company.
In response to the latest ruling, OpenAI issued a statement saying, “Mr. Musk’s lawsuit continues to be baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating this at trial. We remain focused on empowering the OpenAI Foundation, which is already one of the best resourced nonprofits ever.”
Previously: OpenAI Finalizes Restructuring With Nonprofit In Control, State AG OKs It
Top image: WASHINGTON, DC – MAY 21: Elon Musk listens as reporters ask U.S. President Donald Trump and South Africa President Cyril Ramaphosa questions during a press availability in the Oval Office at the White House on May 21, 2025 in Washington, DC. Relations between the two countries have been strained since Trump signed an executive order in February that claimed white South Africans are the victims of government land confiscation and race-based “genocide,” while admitting some of those Afrikaners as refugees to the United States. Trump also halted all foreign aid to South Africa and expelled the country’s Ambassador to the U.S., Ebrahim Rasool. (Photo by Chip Somodevilla/Getty Images)