Billionaire Elon Musk will keep on pursuing his lawsuit against OpenAI despite the AI company announcing modifications to its controversial restructuring proposal on Monday.
The lawsuit continues as Musk’s attorney Marc Toberoff dismissed OpenAI’s re-proposed modification, stating that it was not enough to solve their inherent problems.
“Nothng in today’s announcement changes the fact that OpenAI will keep developing closed-source AI for the benefit of CEO Sam Altman, his investors, and Microsoft,” Toberoff stated, blasting the ChatGPT founder’s recent restructuring actions.
OpenAI’s Restructuring Fails to Quell Musk’s Lawsuit, Amidst Growing Scrutiny
The move is a dramatic change of course for OpenAI, as the company has retreated from elements of an earlier proposal that would have taken control away from its non-profit wing. Under the new deal, the non-profit parent would retain control of the for-profit company while becoming a large shareholder.
But Toberoff wasn’t convinced of the openness of the new plan. “The announcement conceals key information concerning the so-called ‘non-profit control’ structure, and specifically the substantially diminished ownership interest the non-profit will have in Altman’s for-profit business,” he said.
Tesla CEO has been fighting in court to stop OpenAI from straying from its non-profit origins. His suit claims that the company has deviated from its original mission of building artificial intelligence for the good of humanity, as opposed to corporate ends.
Musk is not alone in his concerns. Other tech titans, including Meta Platforms and top AI researchers, including Nobel winner Geoffrey Hinton, who has been dubbed the “godfather of AI,” are signing on to demand regulation to stop OpenAI from restructuring.
There will be a court hearing of the case in March 2026, nearly a year from now, so this judicial matter will still hang over OpenAI’s business in the near term. OpenAI was quick to react to Musk’s move to continue the lawsuit. “Elon pursuing his baseless lawsuit only serves to prove that it was always a bad-faith attempt to slow us down,” said an OpenAI spokesperson.
The restructuring scandal stems from concerns over OpenAI’s ownership and governance structure. OpenAI was originally formed in 2015 as a non-profit research institute, but later created a “capped-profit” subsidiary to raise capital while supposedly remaining true to its original mission.
Critics, including Musk, argue that the company has increasingly been used for commercial purposes instead of its stated mission to make artificial general intelligence work for all of humanity.
OpenAI’s New Balancing Act Amidst Turmoil and Growth
Under the new plan unveiled Monday, OpenAI seems to be trying to strike a middle ground between placating critics and maintaining the investment structure necessary to be a player in the emerging crowded field of AI development.
The for-profit subsidiary would be controlled by the non-profit parent organization but also become a controlling shareholder, hopefully calming some of the governance concerns while maintaining capital inflows.
The planned changes follow months of turmoil inside OpenAI, including a brief but explosive leadership crisis in November when Altman was briefly ousted as CEO before being reinstated.
Microsoft, which has spent billions on OpenAI and has built its technology into many of its products, is said to be among the largest holdouts to supporting the restructuring plan. With its status as OpenAI’s largest shareholder, Microsoft’s influence has monumental significance in shaping the company’s future.
At the same time, OpenAI is still losing business along with its governance and legal problems. OpenAI recently had ChatGPT surpass Elon Musk’s X (formerly Twitter) social media site in traffic for the month, fueled in part by a viral trend for Studio Ghibli material.
As this courtroom drama plays out, the verdict could have far-reaching implications not only for OpenAI but also for how AI firms balance profit incentives with ethical concerns of developing more advanced artificial intelligence systems.
