Elon Musk Won’t Drop OpenAI Lawsuit Despite Restructuring Reversal: What We Know So Far

Tesla CEO Elon Musk is refusing to back down from his legal war with OpenAI, even as the artificial intelligence company attempts to reframe its governance structure. His lawyer Marc Toberoff confirmed on Monday that Musk will continue pursuing the lawsuit he filed against the AI startup earlier this year.

The confirmation came shortly after OpenAI announced a revision to its much-criticised restructuring plan. The company now says its non-profit arm will retain control over the for-profit wing — a U-turn from earlier intentions that had sparked concern across the tech world and triggered Musk’s lawsuit.

But Musk isn't buying the pivot. "Nothing in today’s announcement changes the fact that OpenAI will still be developing closed-source AI for the benefit of Altman, his investors, and Microsoft," said Toberoff in a strongly worded statement.

A Reversal That Fails to Convince

The lawsuit alleges that OpenAI — originally co-founded by Musk — has veered away from its founding promise to develop AI for the public good. Instead, the suit claims, the company is now prioritising profit and corporate interests, particularly those of Microsoft, a major investor.

OpenAI’s revised plan reiterates that its non-profit entity will remain in charge. CEO Sam Altman sought to allay concerns in a blog post, stating: "OpenAI was founded as a non-profit, is today a non-profit that oversees and controls the for-profit, and going forward will remain a non-profit that oversees and controls the for-profit. That will not change."

Toberoff, however, said the announcement "obscures critical details about the supposed 'non-profit control' arrangement," especially regarding what he described as a "sharply reduced ownership stake" for the non-profit in Altman’s commercial operations.

Tensions in the AI Ecosystem

Musk’s lawsuit isn’t unfolding in isolation. Other influential voices — from Meta Platforms to Geoffrey Hinton, the Nobel laureate often dubbed the "godfather of AI" — have expressed alarm over OpenAI’s direction and called on regulators to intervene.

In response to Musk's persistence, an OpenAI spokesperson dismissed the lawsuit as a distraction tactic. "Elon continuing with his baseless lawsuit only proves that it was always a bad-faith attempt to slow us down," the company said in a statement.

The case is set for trial in March 2026, setting the stage for a long and potentially industry-defining battle over AI ethics, corporate governance, and the role of for-profit motives in shaping next-gen technology.

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