OpenAI has filed a lawsuit against Elon Musk, accusing the billionaire of unfair competition and interfering with its business relationships with investors and customers. The legal filing was made on Wednesday in a federal court in California, as part of a counterclaim to Musk’s existing lawsuit against the artificial intelligence company.

The counterclaim deepens the dispute between the ChatGPT maker and Musk, who helped fund OpenAI in its early days but has since become one of its strongest critics.

Musk’s legal offensive continues

Musk, now the head of rival AI company xAI, along with Tesla, SpaceX, and the social media platform X, first sued OpenAI and its CEO Sam Altman over a year ago. He alleged that the company had strayed from its original nonprofit mission and breached agreements made during its founding.

A federal judge in March rejected Musk’s request for an injunction that would prevent OpenAI from operating as a for-profit business. However, the judge said the case could move quickly to a jury trial, which is now scheduled for March 2026 after being delayed.

Billion-dollar bid allegedly a “feint”

In its latest legal move, OpenAI claims that Musk made a “sham bid” earlier this year to acquire a controlling stake in the company. According to the court filing, Musk and a group of investors offered $97.4 billion for OpenAI’s assets—a figure the company says was taken from a character, 974 Praf, in the science fiction book Look to Windward by Scottish author Iain Banks.

OpenAI alleges the bid was not serious and says it recognised the offer as a “feint.” The company claims that Musk’s actions have forced it to use time and resources to address his legal and business challenges, causing damage.

Legal teams clash over intentions

Marc Toberoff, an attorney for Musk, said in an email response on Wednesday that OpenAI’s board failed in their duty by not seriously considering the offer.

“It’s telling that having to pay fair market value for OpenAI’s assets allegedly ‘interferes’ with their business plans,” Toberoff stated.

(Agency inputs)