This is what the lawsuit between Elon Musk and OpenAI is about

Samuel Buchmann

28-4-2026

Translation: machine translated

Two of the most influential minds in the AI industry clash in a federal court in California. A lot of money and the future of OpenAI are at stake.

A court case between Elon Musk and OpenAI under CEO Sam Altman began in the USA on Monday. It is the culmination of a personal feud between the two tech billionaires. The central question is whether OpenAI has abandoned its original, non-profit mission in favour of a profit-oriented model - or whether Musk is simply using the trial to thwart an important competitor to his own AI company xAI.

Investments or donations?

Musk was one of the co-founders of OpenAI in 2015 and sat on the board of directors until 2018. He accuses Altman of breach of contract and unjust enrichment. Musk argues that he invested money in a non-profit organisation that was supposed to develop open-source AI «for the benefit of mankind». Instead, OpenAI was transformed into a complex structure consisting of a non-profit parent organisation and a profit-oriented subsidiary. This structure is the basis for Microsoft's billion-euro investment and the preparation of a possible IPO. OpenAI was recently valued at around 850 billion US dollars.

OpenAI rejects the allegations and emphasises that Musk's articles were donations, not investments. The company speaks of a «harassment and envy campaign», which Musk is using to weaken a competitor to his own AI project xAI. In internal emails that have already become public, Altman points out that Musk himself brought a profit-orientated structure into play. He has also tried at times to take control of OpenAI or merge the company with Tesla.

Juristically, there are two key points at issue:

1. Has OpenAI breached contractual commitments to Musk by switching to the «capped profit» model and partnering with Microsoft?
2. Has the company unjustly enriched itself at Musk's expense?

The richest man in the world is demanding damages of more than 100 billion dollars, which he claims should go to the charitable arm of OpenAI. He also wants the court to make structural changes: CEO Sam Altman and President Greg Brockman are to lose their posts and the for-profit structure is to be reversed.

The change in OpenAI's mission

The process highlights the tension between the rhetoric of the common good and de facto commercialisation in the AI sector. OpenAI was explicitly founded in 2015 as a non-profit organisation with open source aspirations. The original mission was to develop digital intelligence - «unrestricted by the need for financial return» and with broad publication of research results.

Analyses of the tax documents show that this claim has been gradually weakened over the years: Formulations on openness, open source and lack of pressure to generate returns disappeared. What remained in 2024 was a greatly shortened mission, according to which general artificial intelligence (AGI) «should benefit all people».

At the same time, competition is intensifying. Competitor Anthropic is now sometimes valued higher than OpenAI on secondary markets. For Sam Altman, the trial is not just about the potential compensation to Musk. Rather, the outcome will determine whether the current corporate structure of a non-profit bracket with a profit-orientated operating business is permissible at all. A negative judgement would drastically reduce OpenAI's attractiveness for investment.

Opening arguments in the trial are scheduled for Tuesday. The first instance is the District Court of Northern California in Oakland. In the first phase, the jury will assess the allegations and make a recommendation, which Judge Yvonne Gonzalez Rogers will take into account in her decision. Only if she finds OpenAI liable will there be a second phase on possible consequences and the future structure of the company. Both parties can take the case to the Court of Appeal and, if necessary, all the way to the Supreme Court.

Samuel Buchmann

Senior Editor

Samuel.Buchmann@digitecgalaxus.ch

My fingerprint often changes so drastically that my MacBook doesn't recognise it anymore. The reason? If I'm not clinging to a monitor or camera, I'm probably clinging to a rockface by the tips of my fingers.

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