OpenAI vs. Elon Musk: The AI Saga Unfolds
A Rivalry Unveiled
Elon Musk Accused of Attempted Hostile Takeover by OpenAI, Legal Action Involved
In a spectacular turn of events, OpenAI, the tech giant known for its groundbreaking AI research, has launched a countersuit against Elon Musk over allegations of an attempted hostile takeover. Filed in April 2025, the lawsuit accuses Musk of instigating a campaign of harassment against OpenAI.
The Email Evidence
OpenAI claims internal emails expose Musk's push for a for-profit OpenAI with himself as CEO. Allegedly, Musk floated the idea of a "standard C corp with a parallel nonprofit" in Nov 2015, a suggestion that challenges his public stance against the shift from a purely nonprofit model.
The Takeover Bid
In the summer of 2017, as OpenAI's need for computing power grew with its Dota 2 experiments, Musk reportedly encouraged expansion, acknowledging a for-profit model might be necessary. By September 2017, he made his move, pushing for initial control over the board and the CEO seat.
Emails from that period show Musk proposing a structure where he would appoint four out of seven board seats. "I would unequivocally have initial control of the company," he allegedly wrote.
The Failed Merger Attempts
In January 2018, Musk allegedly proposed spinning OpenAI into Tesla, arguing it was the only way to raise the billions needed to compete with Google. OpenAI's team refused the proposal, unwilling to become a Tesla subsidiary. By February 2018, Musk resigned as co-chair and parted ways with the company.
Recent Developments
The countersuit comes as both companies have made major financial moves. Musk recently merged his AI startup xAI with his social media platform X in an all-stock deal valuing xAI at $80 billion. Meanwhile, OpenAI announced a $40 billion funding round led by SoftBank, pushing its valuation to $300 billion - nearly four times that of xAI.
The Battle Ahead
While Musk's attorney defends his bid, claiming OpenAI failed to consider the offer seriously, OpenAI views it as a sham attempt to disrupt its operations. As the legal battle unfolds, OpenAI focuses on its growth, with half a billion people using its ChatGPT assistant each week and projected revenue of nearly $13 billion for 2025.
Insights: The OpenAI-Musk Rivalry
- Inception: OpenAI was founded in 2015 as a non-profit research organization, dedicated to developing safe, open-source AI technology to serve the public good and act as a counterweight to tech giants like Google.
- 2019 Restructuring: OpenAI restructured into a capped-profit model by adding a for-profit arm, designed to raise the necessary capital for AI development while retaining some mission control by its non-profit entity.
- OpenAI's Member Base: Today, OpenAI boasts half a billion users weekly, primarily drawn to its ChatGPT assistant, with projections of $13 billion in revenue for 2025.
- Microsoft's Involvement: Microsoft has emerged as a significant player in the OpenAI saga, with extensive investment and infrastructure partnerships that have raised questions about the company's alignment with OpenAI's initial mission.
- OpenAI's changing business model, now a capped-profit entity, is leveraging technology and artificial-intelligence for investing in its growth, as evidenced by the projected revenue of nearly $13 billion for 2025.
- Elon Musk's recentmerge of his AI startup xAI with his social media platform X, valuing xAI at $80 billion, could be seen as a strategic move in the finance sector, given Musk's interest in AI and investing in cutting-edge technology.
- Amidst the rivalry between OpenAI and Elon Musk, it will be interesting to see how the development of artificial-intelligence in business, particularly in the areas of finance and investing, will shape the future of technology.
