OpenAI Accuses Elon Musk Of 'Cherry-Picking' Evidence In Lawsuit, Says He Backed For-Profit Shift And Quit After Failing To Secure Control

On Friday, OpenAI stated that Tesla Inc. (NASDAQ:TSLA) and xAI CEO Elon Musk initially supported a for-profit structure but exited the company after negotiations broke down over control, rather than mission.

OpenAI Says Musk Misrepresented Internal Records

OpenAI pushed back against Musk's lawsuit, accusing the billionaire of selectively using internal documents to misrepresent the company's origins and its shift to a for-profit structure.

In a detailed blog post, OpenAI said Musk agreed as early as 2017 that developing artificial general intelligence would require a for-profit entity alongside a nonprofit — the same structure OpenAI operates under today — but later sought absolute control and walked away when those demands were rejected.

OpenAI Says Musk Backed For-Profit Plans Early

According to OpenAI, internal call notes and private journal entries show Musk actively discussed transitioning from a purely nonprofit model to a structure that could raise billions of dollars while maintaining a philanthropic mission.

"The truth is that we and Elon agreed in 2017 that a for-profit structure would be the next phase for OpenAI," the company said, adding that Musk even explored forming a public benefit corporation, or PBC, shortly after those discussions.

OpenAI argues Musk's lawsuit ignores this broader context by highlighting selective excerpts that portray OpenAI leaders as secretly pursuing a for-profit model without his knowledge.

Control, Not Mission, At Center Of Dispute

OpenAI claims negotiations unraveled because Musk demanded majority ownership and full operational control, citing internal notes describing his insistence on governance authority and succession plans.

"He said that he needed full control since he'd been burned by not having it in the past," OpenAI wrote, adding that Musk also proposed merging OpenAI into Tesla, a move the company rejected.

OpenAI said it refused to place AGI under the control of any single individual, including Musk, leading to his departure in 2018.

Altman Backs OpenAI's Account

OpenAI CEO Sam Altman echoed the company's position on X, saying Musk was "cherry-picking things to make Greg look bad," referring to OpenAI President Greg Brockman.

"The full story is that Elon was pushing for a new structure, and Greg and Ilya spent a lot of time trying to figure out if they could meet his demands," Altman wrote.

In a follow-up post, Altman highlighted internal notes alleging Musk sought majority equity to fund long-term ambitions, calling that context "important" to understanding internal debates.

Lawsuit Raises Stakes For OpenAI And Microsoft

Musk's lawsuit, set for trial April 27, alleges OpenAI abandoned its nonprofit mission and misled him while transforming into a for-profit entity closely tied to Microsoft Corp (NASDAQ:MSFT), which has invested billions since 2019.

Market commentator Jim Cramer has warned the case could complicate any future OpenAI public listing, while Kalshi bettors currently assign Musk roughly a 64% chance of prevailing.

OpenAI, however, says the lawsuit represents Musk's fourth attempt to revive similar claims and is part of a broader effort to slow the company as his rival AI firm, xAI, scales up.

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