A U.S. judge has ruled that Elon Musk’s lawsuit against OpenAI will proceed to trial, stating there is evidence to support the billionaire’s case. Musk sued OpenAI and its co-founders Sam Altman and Greg Brockman in 2024. He alleges they betrayed their original contractual agreements by pursuing profits instead of the nonprofit’s founding mission to develop artificial intelligence for the benefit of humanity.
Elon Musk was an early financial backer and co-founder of OpenAI. He resigned from the board in 2018 after his bid to take over as CEO was rejected by the other co-founders, who selected Sam Altman for the role. Officially, Musk cited potential conflicts of interest with Tesla’s own AI development for self-driving cars. Since leaving, he has been a vocal critic of the firm’s shift toward a for-profit model. In February 2025, Musk made an unsolicited bid to buy OpenAI for 97.4 billion dollars, which Altman rejected.
OpenAI was founded in 2015 as a non-profit research lab. It began moving away from its pure non-profit roots in 2019 by creating a for-profit subsidiary with a capped-profit model, designed to limit investor returns. This structure was intended to help the company raise the massive funding required to scale and attract top talent. Musk’s lawsuit was unable to stop OpenAI’s conversion into a for-profit entity. In October 2025, the corporation completed its formal restructuring process. The for-profit branch became a Public Benefit Corporation, with the original non-profit retaining a 26 percent equity stake.
Musk is now seeking monetary damages from what he calls “ill-gotten gains” by OpenAI. He states he invested approximately 38 million dollars in early funding, along with providing guidance and credibility, based on assurances that OpenAI would remain a nonprofit. An OpenAI spokesperson has characterized Musk’s lawsuit as baseless and part of an ongoing pattern of harassment.
District Judge Yvonne Gonzalez Rogers said her decision was based on evidence suggesting OpenAI’s leaders made assurances that its original nonprofit structure would be maintained, as Musk alleges. A jury trial for March has been tentatively scheduled.