Musk's lawyer vows continued legal battle to unwind OpenAI restructuring

By Miles J Herszenhorn and Shirin Ghaffary

 

Elon Musk’s lawyer pledged to continue the billionaire’s legal crusade against OpenAI as he slammed the attorneys general of California and Delaware for not blocking the artificial intelligence startup’s restructuring as a for-profit company. 

“The AGs cannot sanitize OpenAI’s unlawful conduct through a hastily arranged deal,” Marc Toberoff, Musk’s lead attorney in the OpenAI litigation, said in a statement on Wednesday. 

 

OpenAI, the maker of ChatGPT, announced on Tuesday that it had given a 27 per cent ownership stake to its longtime backer Microsoft Corp. in a transition that will keep the startup’s nonprofit arm in control of its for-profit operations. OpenAI will now become a public benefit corporation, fulfilling Chief Executive Officer’s Sam Altman’s long-held objective.

 

Musk and Altman, one-time business partners turned bitter foes, have feuded in court over the future of OpenAI since last year. In 2023, Musk co-founded the artificial intelligence company xAI, which has become one of OpenAI’s main rivals. This year, OpenAI rejected Musk’s unsolicited bid to acquire the assets of the nonprofit that controls the company for $97.4 billion. 

 

Altman has denounced Musk’s lawsuit challenging the OpenAI restructuring as a weaponisation of the legal system to slow down a competitor. US District Judge Yvonne Gonzalez Rogers has scheduled a trial for late March over Musk’s claims that Altman betrayed OpenAI’s founding principles as a charity.

 

“These unserious claims are just further examples of Mr. Musk’s ongoing pattern of harassment,” a spokesperson for OpenAI wrote in a statement. “This remains a waste of time.”

 

A spokesperson for Delaware Attorney General Kathy Jennings declined to comment. A representative for California Attorney General Rob Bonta did not respond to a request for comment.

 

Although the state officials didn’t object to OpenAI’s restructuring plan, Bonta said in a memorandum of understanding that the shift will have “no impact on any other case” — which will allow Musk’s litigation to continue.

 

“OpenAI’s attempt to preempt that court and jury through an eleventh-hour restructuring only underscores why this case must proceed to trial,” Toberoff said. “The CA AG preserved Mr. Musk’s rights for good reason — we intend to vindicate them.”