Elon Musk’s lawyer vows to press on with legal battle against OpenAI restructuring

Elon Musk’s legal team has vowed to continue its court battle against OpenAI’s restructuring, despite California and Delaware’s attorneys general declining to block the artificial intelligence company’s transition to a for-profit model.

Marc Toberoff, Musk’s lead attorney in the OpenAI litigation, said on Wednesday that the state authorities’ approval cannot sanitise OpenAI’s unlawful conduct through a hastily arranged deal, as per a report by Bloomberg.

The statement follows OpenAI’s announcement on Tuesday that it had granted a 27 per cent ownership stake to Microsoft, its long-time backer, as part of a sweeping reorganisation. The move transforms OpenAI into a public benefit corporation, formalising CEO Sam Altman’s long-held goal to give the company greater financial flexibility while maintaining oversight from its nonprofit arm. The restructuring marks another flashpoint in the escalating feud between Musk and Altman, once collaborators in OpenAI’s early days.

Musk, who launched rival AI venture xAI in 2023, sued OpenAI earlier this year, accusing Altman of abandoning the organisation’s founding mission as a charitable entity. OpenAI, meanwhile, rejected Musk’s unsolicited $97.4 billion offer to acquire the assets of the nonprofit that controls it, reported Bloomberg.

Altman has dismissed the lawsuit as an attempt by Musk to “weaponise the legal system” and hinder a competitor. A US federal court has scheduled a trial for late March, where Musk’s claims that OpenAI strayed from its founding principles will be heard.

An OpenAI spokesperson told Bloomberg in response that This remains a waste of time, as these unserious claims are just further examples of Mr Musk’s ongoing pattern of harassment.

While neither Delaware Attorney General Kathy Jennings nor California Attorney General Rob Bonta moved to block OpenAI’s restructuring, Bonta noted in a memorandum of understanding that the change “will have no impact on any other case,” effectively allowing Musk’s litigation to proceed.

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