By Arthur Yolles
When Sam Altman founded OpenAI as a nonprofit in 2015, its mission statement was to “[build] safe and beneficial artificial general intelligence for the benefit of humanity.”[1] This lofty endeavor attracted large-scale investors — namely Elon Musk.[2] Seeking to raise further capital, OpenAI switched to a “capped-profit” model in 2019 and, in 2024, began planning to restructure itself as a for-profit corporation.[3] Now, in 2025, Musk is suing OpenAI, claiming that its plans to switch to a for-profit model is fundamentally incompatible with its original humanitarian mission.[4]
The Claims
In Musk’s current action against OpenAI, he alleges several causes of action, including breach of contract, promissory estoppel, breach of fiduciary duty, and violations of antitrust law, and he seeks an injunction preventing OpenAI from restructuring into a for-profit model.[5] The U.S. District Court for the Northern District of California held a hearing on Musk’s preliminary injunction on February 4, 2025, and the court indicated that it was unlikely to grant the motion, calling the request “extraordinary.”[6] The court also expressed skepticism regarding Musk’s antitrust claims.[7]
The crux of Musk’s claims likely lay in the breach of contract and promissory estoppel causes of action.[8] That said, litigating these claims will present a massive, time-consuming challenge.[9] Foremost, there is likely to be a dispute over whether Sam Altman, the CEO of OpenAI, and Musk even formed a contract.[10] Musk argues that there was a bargained-for exchange, specifically that he supplied tens of millions of dollars in funding and recruited talent for OpenAI “in exchange and as consideration for the Founding Agreement,” which is that OpenAI would remain a non-profit dedicated to developing artificial intelligence for the betterment of humanity.[11] However, Musk has produced no physical agreement, and the District Court judge questioned why Musk would effectively enter an agreement for forty-five million dollars in funding backed up by a mere handshake.[12] That said, the judge also acknowledged the unusual realities of the parties in this case, being that it is effectively “billionaires versus billionaires.”[13]
Regardless of whether Musk can convince a jury that there was an agreement, OpenAI’s vague mission statement greatly weakens Musk’s breach of contract and promissory estoppel claims.[14] Even if the court finds that there was a contract and that OpenAI had a duty to abide by its initial foundational goals, the mission statement is open to such broad interpretation that Musk would likely be unable to prove that OpenAI has violated it.[15] After all, OpenAI has developed a free chatbot that millions of people have used worldwide.[16] If, however, the court does not find that there was a contract, Musk will be left with his promissory estoppel claim.[17] Promissory estoppel claims generally require 1) a clear and unambiguous promise, 2) reasonable and foreseeable reliance, and 3) injury resulting from reliance on that promise.[18] Although Musk could likely prove that he invested millions and now regrets it, the broad interpretability of OpenAI’s founding mission falls far short of the requirement that there be a clear and unambiguous promise.[19]
Reason for Public Concern
Regardless of Musk’s likelihood of success, the legal and business communities have taken notice, with the FTC, California’s and Delaware’s Attorney Generals, and other interest groups filing amicus briefs or even joining the suit — and for good reason.[20] First, OpenAI is the de-facto leader in AI chatbot technology, and the public has an interest in its moral direction as a company.[21] Second, the way that the court analyzes the parties’ claims may set a precedent for how courts should handle future disputes relating to business classifications.[22]
OpenAI’s desire to convert to a for-profit model does not necessarily mean it will abandon its initial principles, though, as OpenAI has asserted it merely needs more investors to support its growth as a company.[23] It also does not mean that opponents of its conversion have purely humanitarian motives: Both the facts that Musk owns an AI startup himself, which competes with OpenAI, and that Musk offered to purchase OpenAI on February 12 raise questions about whether he cares about preserving OpenAI’s original humanitarian purpose or simply eliminating a competitor.[24] According to OpenAI, while Musk’s court filings argue that all of OpenAI’s assets should remain in a charitable trust, if Musk were to purchase OpenAI, all of OpenAI’s assets would go to Musk and his team of private investors, which undermines his entire argument.[25]
[1] OpenAI, Our Structure, https://openai.com/our-structure/ (last visited Feb. 8, 2025); see also Kenneth Niemeyer, OpenAI’s Mission to Develop AI that ‘Benefits All of Humanity’ Is at Risk as Investors Flood the Company with Cash, Bus. Insider (Sep 15, 2024, 3:23 PM), https://www.businessinsider.com/sam-altman-openai-mission-drift-for-profit-nonprofit-structure-investment-2024-9#:~:text=Sam%20Altman%20founded%20OpenAI%20in,nonprofit%20to%20support%20that%20mission.
[2] See Niemeyer, supra note 1; Sarah Parvini, Elon Musk Sues OpenAI, Renewing Claims ChatGPT-maker Put Profits Before ‘the Benefit of Humanity,’ AP News (Aug. 5, 2024, 10:17 PM), https://apnews.com/article/elon-musk-open-ai-sam-altman-artificial-intelligence-6b734fe41cc24cb3029a0a863e73f190.
[3] See Niemeyer, supra note 1.
[4] See Parvani, supra note 2; Barbara Ortutay & Matt O’Brien, Judge Says Elon Musk’s Claims of Harm from OpenAI Are a ‘Stretch’ But Welcomes Possible Trial, AP News (Feb. 4, 2025, 7:02 PM), https://apnews.com/article/elon-musk-openai-lawsuit-sam-altman-3cd261b2a9b04630ec93582020c59ef7.
[5] See Complaint at 1, 34, Musk v. Altman, No. 4:24-cv-04722-YGR, (N.D. Cal. Feb. 29, 2024), https://www.courthousenews.com/wp-content/uploads/2024/02/musk-v-altman-openai-complaint-sf.pdf.
[6] Dorothy Atkins, OpenAI Judge Rips Musk’s ‘Broad’ Bid To Block For-Profit, Law360 (Feb. 4, 2025, 10:16 PM), https://www.law360.com/corporate/articles/2283983/openai-judge-rips-musk-s-broad-bid-to-block-for-profit.
[7] Id.
[8] Id.; see also Complaint, supra note 5, at 28-33 (listing Musk’s causes of action and, when considering the District Court Judge’s initial comments, indicating that the breach of contract and promissory estoppel claims may be the strongest).
[9] See Ortutay & O’Brien, supra note 4 (predicting that trial would likely begin in early 2027).
[10] See Musk vs. Altman: Round 2 – The Heavyweight Legal Battle for AI’s Soul, LawInc (Aug. 5, 2024), https://www.lawinc.com/musk-altman-legal-battle-ai.
[11] See Complaint, supra note 5, at 28.
[12] See Atkins, supra note 6.
[13] Id.
[14] See Dana Brakman Reiser & Anupam Chander, Does Elon Musk’s Lawsuit Against OpenAI Have Merit?, ProMarket (Mar. 25, 2024), https://www.promarket.org/2024/03/25/does-elon-musks-lawsuit-against-openai-have-merit/; See also Zach Javdan, Ctrl+Musk+Delete: Elon’s Strategic Exit from the OpenAI Lawsuit and Its Impact on the Future of AI, LawInc (June 12, 2024), https://www.lawinc.com/elon-musk-openai-lawsuit-impact-future-ai.
[15] See Reiser & Chander, supra note 14.
[16] Id.
[17] See Complaint at 28-30, Musk v. Altman, No. 4:24-cv-04722-YGR, (N.D. Cal., Feb. 29, 2024).
[18] See Javdan, supra note 14.
[19] See id.; Joe Dworetzky, Oakland judge postponed Musk suit against OpenAI even as interest in the case gathers, Loc. News Matters (Jan. 15, 2025) (“[Musk] relied on the founders’ agreement that OpenAI would not be in it for the money but for the world.”), https://localnewsmatters.org/2025/01/15/oakland-judge-postponed-musk-suit-against-openai-even-as-interest-in-the-case-gathers/.
[20] See Dworetzky, supra note 19; Brief of Encode, et al. as Amici Curiae Brief Supporting Plaintiff, Musk v. Altman, No. 4:24-cv-04722-YGR, (N.D. Cal. Dec. 27, 2024).
[21] See Shirin Ghaffary, OpenAI Mulls Plan for a More Conventional For-Profit Business, Bloomberg L. (Dec. 27, 2024, 8:00 AM),
https://www.bloomberglaw.com/bloomberglawnews/artificial-intelligence/XEAVH198000000?bna_news_filter=artificial-intelligence#jcite.
[22] See Javdan, supra note 10.
[23] See Ghaffary, supra note 21.
[24] See Anna Tong, OpenAI Says Musk’s Takeover Bid Contradicts His Lawsuit Against It, Reuters, Feb 12, 2025, https://www.reuters.com/technology/artificial-intelligence/openai-says-musks-takeover-bid-contradicts-his-lawsuit-against-it-2025-02-13/.
[25] See id.
