Court Gives Musk Green Light: Fraud Lawsuit Against OpenAI Can Proceed, Other Claims Dismissed

A U.S. court has opened the door to one of the most high-profile tech legal battles. Elon Musk can now move forward with his lawsuit against OpenAI, accusing the company of deceiving him about its nonprofit status. Judge Yvonne Gonzalez Rogers upheld Musk’s fraud allegations but dismissed other claims, including racketeering and false advertising.

🔹 Musk’s Claim: “OpenAI Misled Me” Musk, one of OpenAI’s co-founders and early donors—contributing around $45 million—claims he was misled into believing the company would remain nonprofit and open-source. Instead, he argues, OpenAI secretly planned to transition into a for-profit business, contradicting its original mission to develop AI “for the benefit of humanity.” “They convinced me to fund a nonprofit, but behind the scenes, they were preparing to turn it into a money-making machine,” Musk claims.

The judge agreed that Musk’s fraud allegations were plausible enough to move forward, stating that he presented sufficient evidence suggesting the company may have acted unethically to raise capital for a for-profit model.

❌ Dismissed: Racketeering, False Advertising, and Contract Breach On the other hand, the court dismissed Musk’s racketeering charges under the RICO Act, citing a lack of concrete evidence. Claims of deceptive advertising and breach of an express contract were also rejected. The emails Musk provided were ruled insufficient to prove a binding agreement. However, the court acknowledged the possibility of an implied agreement, based on the behavior and expectations shared between the parties involved.

🔄 OpenAI’s Counterclaim: Musk Is Sabotaging Our Restructuring Meanwhile, OpenAI has filed a counter-lawsuit accusing Musk of deliberately obstructing its corporate restructuring, which is estimated to be worth nearly $100 billion. The centerpiece is Musk’s February 2024 bid to acquire OpenAI for $97.375 billion. OpenAI dismissed the offer as fraudulent and strategic, claiming it was designed to gain access to internal information and derail the restructuring. According to the company, none of the investors listed in Musk’s letter conducted due diligence, and one even admitted that Musk planned to obtain internal data through legal action. “Musk is no longer affiliated with OpenAI and now runs a rival AI company, xAI. This lawsuit is just a tool to stop our progress,” OpenAI argues.

⏳ Deadline Pressure OpenAI is racing against the clock: it must complete its restructuring by the end of 2025, or risk losing major funding. SoftBank, one of its major backers, has pledged $30 billion—but warned it would withdraw at least $10 billion if the process isn’t finished on time.

📌 Summary: Elon Musk is allowed to move forward with his fraud lawsuit against OpenAI, while other claims were thrown out. OpenAI, in turn, is fighting back with a counterclaim, alleging that Musk is sabotaging its future. At stake: the future of one of the most powerful AI labs on the planet—and tens of billions of dollars.

#ElonMusk , #OpenAI , #SamAltman , #ArtificialInteligence , #worldnews

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