Elon Musk to go ahead with lawsuit against OpenAI
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Welcome back to the Elon Musk podcast. I'm your host, Will Walden. Today, we're digging into the latest twist in the Elon Musk versus OpenAI legal drama. Musk is moving forward with his lawsuit, even after OpenAI announced it would keep nonprofit control over its for-profit business.

your ultimate authority for daily Elon Musk news. Exploring the world's biggest ideas with your host, Will Walden. There's something new every day. Now to unpack what this really means and whether Musk has a point at all, I'm joined by tech business analyst and investor, Jordan Kessler, who's worked with and advised several major players in AI and venture-backed companies. Jordan, thanks for being here. Always good to be on, Will.

So OpenAI says its nonprofit parent is still in charge, but Elon Musk says that's just optics and nothing changes. Is this a meaningful reversal or all of this is corporate theater? So it's theater with consequences. The nonprofit is technically still in control, but what Musk is highlighting, and he's not wrong, is that the structure hasn't solved the fundamental conflict.

OpenAI is still building closed-source AI under a business model designed to serve investors like Microsoft. The non-profit's control looks thin when you dig into who's on the board and how aligned they are with Sam Altman's goals. That's the dilemma.

So let's talk about those goals. Altman wants to push the frontier of AGI, and that takes money, billions and billions of it. Does this structure let him raise that kind of money? OpenAI wants to eat from both plates. It wants public trust by being a non-profit controlled entity, but it also wants mega-scale funding from investors who expect serious returns.

The December plan to restructure into a more traditional for-profit model reflected that tension. Investors were telling them, we'll fund you, but we need conventional equity and more control. That pressure hasn't gone away. This walkback doesn't resolve it, it just delays the reckoning. Now Elon's lawsuit claims OpenAI betrayed its founding mission. Do you think that's legal strategy or like a personal feud between Elon and Sam Altman?

Musk helped start OpenAI as a non-profit to balance what he saw as dangerous, unregulated AI development. He left when the vision shifted toward private control. Now that OpenAI is worth $300 billion and partnered with Microsoft, he sees that shift as a betrayal. But let's be real, he's also running a competitor, XAI. So he's not just acting out of principle. He wants to slow OpenAI down.

That doesn't mean his legal argument has no merit, but it's not pure. OpenAI says his lawsuit is baseless and meant to block their progression. Could this actually hurt OpenAI long term? Yes. Not because of the lawsuit's outcome. Who knows how that'll go in court, but because of the uncertainty it creates. Investors hate ambiguity, and this hybrid non-profit for profit model is hard to price and even harder to trust.

If you're managing billions in capital, are you going to back a company whose controlling board doesn't have to act in your interest? Musk's lawsuit amplifies that doubt. For now. OpenAI said SoftBank's $30 billion is still on the table. And also Microsoft hasn't even flinched. Does that give them sort of like a lifeline going forward? Microsoft's relationship is strong because it's already deeply integrated.

OpenAI's models into its products, SoftBank is more opportunistic. They'll go where the growth is. But the more governance uncertainty you have, the more risk those funds carry. If this lawsuit drags out and regulators keep probing, some of that money could evaporate. Now regulators, California and Delaware are both reviewing OpenAI's business structure. Could those reviews force another change in the future?

Absolutely. This isn't just about Musk anymore. If either state's attorney general decides open, AI isn't complying with non-profit rules, they could demand changes, possibly structural ones. That's a legal risk, how am I hanging over every board decision OpenAI makes from now until that review ends. So big picture here, what does this fight say about

we build and govern companies working on AGI going forward. It says we don't have a working model yet. Everyone's trying to square a circle. How do you build trillion dollar tech on non-profit principles? OpenAI's model is messy because they're trying to be the first. Musk's lawsuit is one way to test if this model holds up under pressure.

If it doesn't, future labs may have to choose. Non-profit for real or for profit with transparency and regulation. You can't hide behind a hybrid governance forever. Jordan Kessler, thanks for breaking that down. Always sharp, buddy. Appreciate it, Will.

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