A federal judge in California has refused Elon Musk’s request to throw out allegations that he carried out a “years-long harassment campaign” against OpenAI, the company he helped establish in 2015 before walking away three years later.
US District Judge Yvonne Gonzalez Rogers handed down the order on Tuesday, and this means OpenAI’s countersuit will go ahead. The company says Musk used lawsuits, press interviews, social media posts, and even “a sham bid for OpenAI’s assets” to damage its business and help his own start-up, xAI.
In his argument, Musk had said that the claims were false and therefore deserved to be dismissed or delayed. However, the judge concluded that they were legally strong enough to proceed.
Musk has transformed from a co-founder to an opponent
Musk was an early backer of OpenAI, working with Sam Altman to create it as a non-profit focused on AI “for the benefit of humanity.” The Tesla boss stepped down from the board in 2018.
After a year, Microsoft made a huge investment in OpenAI and introduced a capped profit structure, and Musk has repeatedly said that this betrayed the startup’s original mission.
Musk has attempted to block OpenAI’s transition to a for-profit entity.
He went on to sue OpenAI and its CEO, Sam Altman, accusing them of violating the agreements and moving the company towards profit. OpenAI countersued Musk in April, accusing the tech billionaire of bad faith tactics under California laws.
“Elon’s nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit,” OpenAI said in a statement on X. “Today, we countersued to stop him.”
Judge Gonzalez Rogers did not rule on whether those claims are true but concluded they are sufficient for trial. At the same time, she dismissed some of Musk’s own allegations against OpenAI and Microsoft. In her written remarks, she observed, “The gamesmanship of both sides is obvious, as each flip-flops.”
A jury trial has been scheduled for March 2026 in federal court in Oakland, underscoring how drawn-out the dispute could become. Musk is expected to give evidence.
OpenAI points fingers at Musk over falsehoods
The fight has become as much about reputation as legal principle. OpenAI says Musk has “been spreading false information about us” and has always acted with “his own agenda.” But Musk maintains that OpenAI breached its founding promises. Meanwhile, his latest company, xAI, is still trying to catch up in the market.
Earlier this year, Musk made a $97.4 billion unsolicited bid to buy OpenAI outright. Altman dismissed it with a cutting remark posted online: “no thank you but we will buy Twitter for $9.74 billion if you want.”
Marc Toberoff, Musk’s lawyer, told the BBC the offer was genuine. “Had OpenAI’s Board genuinely considered the bid, as they were obligated to do, they would have seen just how serious it was,” he said. “It’s apparent they prefer to negotiate with themselves on both sides of the table than engage in a bona fide transaction in the best interests of the charity and the public.”
For some observers, the legal wrangling has obscured wider debates about the safe use of AI. Ari Lightman, a professor at Carnegie Mellon University, said the dispute is more about corporate control than public benefit.
“This is about control. This is about revenue. It’s basically about one person saying, ‘I want control of that start-up’.”
Lightman.
“That takes a backseat with all this rigmarole over control and monetization,” added Lightman.
Whether the court case clarifies those issues or simply extends the feud is an open question. What is clear is that two of Silicon Valley’s most prominent figures are preparing for a prolonged showdown over ownership, direction, and influence in one of the world’s most powerful technologies.
Your crypto news deserves attention - KEY Difference Wire puts you on 250+ top sites
