Two of the most powerful people in technology, Elon Musk and Sam Altman, got together in December 2015 to co-found OpenAI, a nonprofit committed to making artificial intelligence (AI) benefited all of mankind.
Their cooperation sprang from common worries about the possible risks of artificial intelligence and a shared goal for creating ethical and safe AI.
But over the past ten years, their alliance has disintegrated, resulting in direct competition, court fights, and public strife.
Originally a team effort to democratize AI research, what started out as such has become of the most well-known rivalry in the IT sector.
Musk and Altman today not only oversee rival artificial intelligence startups but also have somewhat divergent ideas about how AI should develop.
Their falling-out has altered the sector, impacting company strategy, legislative debates, and the larger story of AI’s place in society.
The beginnings of OpenAI, the widening ideological divide between Musk and Altman, the court battles that followed, and how their conflicting businesses have shaped the AI race are examined in this paper.
OpenAI’s Birth: A Common Vision
Musk and Altman’s partnership began in 2015 when corporate behemoths like Google and Facebook dominated artificial intelligence development.
Concerned about the concentration of artificial intelligence capacity in a few profit-driven businesses, Musk and Altman started OpenAI along with other well-known technologists including Ilya Sutskever, Greg Brockman, and John Schulman.
The company’s goal was clear: it would do innovative artificial intelligence research making sure its advantages were shared generally instead of under control of a small number of companies.
Emphasizing openness, teamwork, and ethical development of artificial intelligence, OpenAI positioned itself as a counterforce to tech titans.
Vocal supporter of artificial intelligence safety, Musk worried that unrestrained growth of AI would cause existential threats for humans.
Silicon Valley entrepreneur and investor Altman expressed these worries but also found great enthusiasm about the transforming possibilities of artificial intelligence.
Taken together, they saw OpenAI as a lighthouse of ethical artificial intelligence creation.
Operating as a charity at first, OpenAI depended on grants and charitable donations. Musk personally promised large sums of money, therefore strengthening his dedication to the issue.
But as the expectations of artificial intelligence research grew, so did the need for financial resources—which prepared the ground for a significant dispute.
The Breaking Point: Musk’s Leave From OpenAI
Internal Open AI conflicts had started to show by 2018. Particularly with Google’s DeepMind, Musk grew more dubious of the company’s capacity to compete with well-funded corporate labs.
He suggested a reorganization giving him more control over the direction of the company and felt OpenAI needed a more aggressive attitude to research and development.
But other board members including Altman objected to Musk’s ideas. They were cautious of giving one person too much authority since they considered OpenAI’s open and cooperative attitude as vital to its goal.
The argument came to a stand-still, which prompted Musk to step off the OpenAI board in 2018.
Musk’s leaving did not signal his end of participation in AI conversation. Rather, he started speaking more and more about how he thought OpenAI strayed from its original values.
His main worry is the slow change of the company toward a more commercial approach.
Musk’s Critics and the Change to a For- Profit Model
OpenAI LP was created when OpenAI changed from a strictly nonprofit organization to a “capped-profit” model in 2019.
This action sought to draw outside funding required to support the continuing rising expenses of artificial intelligence development.
Investors might profit under this approach, but gains were limited to match OpenAI’s goals. Musk considered this choice as a betrayal of OpenAI’s initial intent, while the leadership said it was necessary for remaining competitive.
Publically, Musk attacked the change, claiming OpenAI had evolved into what it was designed to be—a profit-driven artificial intelligence business.
He argued that the company’s growing reliance on corporate money and growing secrecy betrayed its dedication to open research.
OpenAI also attracted billions of money from big tech companies, including Microsoft, which turned become a major collaborator.
Musk’s mistrust grew as he felt OpenAI was starting to resemble the very tech behemoths it was meant to threaten.
Legal Wars and Rising Public Conflicts
Musk’s complaints by 2024 had developed into legal action. Early in 2024, he sued OpenAI and Altman alleging they violated their founding agreement by giving profits top priority above the public benefit.
Musk’s complaint claimed OpenAI’s for-profit change and collaboration with Microsoft directly contradicted its initial nonprofit goal.
The leadership of OpenAI refuted the allegations, claiming that Musk had known about the strategic developments of the company.
They said OpenAI would not have been able to create cutting-edge artificial intelligence systems without outside money.
The court fight only served to widen the public gulf separating Musk from Altman. On social media, their conflict was evident as Musk regularly attacked OpenAI’s direction on his platform, X (previously Twitter).
The battle peaked in January 2025 when OpenAI revealed the “Stargate” project—an ambitious $500 billion effort meant to create next-generation artificial intelligence architecture.
Musk called the finance strategy of the project unsustainable and instantly questioned its viability and openness. In turn, Altman defended the program stressing its relevance for the development of artificial intelligence.
The two tech mogues’ social media interactions highlighted their growing philosophical gulf.
The emergence of xAI: Musk’s counterpoint to OpenAI
Musk unveiled xAI, a direct rival of OpenAI, in 2023. He presented the company as a substitute that would free OpenAI’s models from the ideological slights he felt had slipped in.
Presenting xAI as a “anti-woke” AI business, Musk underlined its dedication to free expression and least involvement in model results. With xAI’s chatbot Grok launched alongside X, OpenAI’s hegemony in AI-driven conversational models was obviously challenged.
Musk aimed to guide artificial intelligence development in a way he felt more in line with OpenAI’s initial goal—previously, he felt business interests hindered this path.
As both businesses aggressively sought AI leadership, this action heightened the competition even further.
The Final Showdown and Attempt at Hostile Takeover
Musk led a group of investors in an unsolicited $97.4 billion proposal to purchase OpenAI’s nonprofit arm, so igniting the conflict in February 2025.
His expressed aim was to bring OpenAI back to its original humanitarian purpose and straighten it using its fundamental values.
But OpenAI’s board quickly and unanimously turned down Musk’s offer, therefore reaffirming their allegiance to the present course of the business.
The refusal confirmed the gulf, as Musk promised to keep his artificial intelligence efforts going through xAI.
Driven by conflicting ideas and leadership approaches, OpenAI and xAI remain leaders in the AI race as of right now.
An AI Industry Shaped by a Feud
The breakdown between Elon Musk and Sam Altman reflects two opposing ideas for the direction of artificial intelligence, not only a personal quarrel.
Musk supports an open access, more regulated, safety-first strategy while Altman has embraced a pragmatic paradigm that strikes a mix between commercial viability and creativity.
Their conflict has affected business dynamics and spurred debates about artificial intelligence ethics, control, and corporate governance.
It remains to be seen if this contest finally helps mankind—or increases the risks connected with artificial intelligence.
One thing is clear: the Musk-Altman conflict has permanently changed the AI scene and shaped its development going forward for years to come.
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