King Kong Battles Godzilla: Why Is Musk Suing Ultraman?

Tao Zhu, Golden Finance

Summary

On April 27th, the trial of Elon Musk suing Ultraman officially began. Musk sued OpenAI, CEO Ultraman, President Greg Brockman, and Microsoft, claiming they betrayed him and the public, abandoning OpenAI’s mission as a charitable manager of artificial intelligence for the benefit of humanity, and transforming this nonprofit organization into a profit-driven giant. Ultraman pointed out that Musk’s lawsuit is not truly about whether OpenAI is a public good, but because xAI lags behind OpenAI.

1. A Spat Caused by “Non-Profit” Status

The trial of OpenAI founders Ultraman and Musk in California shows clear differences in their arguments. Musk believes Ultraman changed OpenAI’s charitable nature; Ultraman argues Musk aims to suppress OpenAI.

(Outside the court, boxing sandbags with Musk and Ultraman’s portraits appeared.)

1. Musk: Stealing from charities is wrong

At the scene, Musk wore a dark suit and a tie. During testimony, he stated: “The trial is actually simple, stealing from charities is wrong… If looting charity funds is acceptable, then the entire foundation of charitable donations would be destroyed.”

With the rapid development of AI technology, Musk has become increasingly concerned about the AI field and worries that “the government has not taken effective measures” to regulate it.

Musk’s lawyer, Steven Molo, pointed out that his concerns intensified after a 2015 meeting with then-President Obama. He said his client has always believed that artificial intelligence “is not a tool for wealth creation.”

When OpenAI was still a nonprofit, Musk donated $38 million over several years. “Without Elon Musk, there would be no OpenAI. It’s that simple.”

When asked by Musk’s lawyer whether he would still donate money, time, and effort to OpenAI if its mission was not to develop technology for the benefit of humanity as a nonprofit, Musk replied no. “My idea, the name, all of it, was my proposal. I recruited key personnel, taught them everything I knew, and provided all the startup funds — beyond that, I did nothing. It was a lot of work, and I deliberately chose to make it about benefiting all humanity.”

OpenAI proposed establishing a profit-making division in 2018, years before launching ChatGPT and entering the commercial AI market.

Musk demands billions of dollars in “illegal gains,” which his lawyer says will be used to fund OpenAI’s nonprofit sector. He also hopes to overhaul the company, including dismissing Ultraman.

2. OpenAI: Musk Trying to Suppress “Competitors”

An OpenAI lawyer stated that the motivation for the lawsuit is Musk’s attempt to suppress “competitors.” Lawyer William Savitt said: “We are here because Mr. Musk’s plans at OpenAI did not succeed. Because he is our competitor, Mr. Musk will resort to any means to attack OpenAI.”

OpenAI’s lawyer said Musk used his investments to “bully” other OpenAI founders, and he also wanted to merge the company with Tesla, which he owns. “Other founders refused to hand over control of AI to one person. When they refused to sell OpenAI, Musk took his ball and went home.” Unable to control OpenAI, he abandoned it. At that time, he believed OpenAI was finished.”

“Musk has never cared whether OpenAI is a nonprofit organization.”

OpenAI describes this dispute as a power struggle, not a fight over establishing a profit division: Musk wants control of this profit-making company, but “we cannot agree with Elon on profit terms because we believe giving any individual absolute control over OpenAI contradicts our mission.”

“We regret that we have come to this point with someone we deeply respect — he inspired us to pursue higher goals, then told us we would fail, founded a competing company, and then sued us when we started making meaningful progress toward OpenAI’s mission without him.”

OpenAI states that Musk’s actions are driven by jealousy and regret over leaving the company. As the race for general artificial intelligence (AGI) heats up, OpenAI accuses Musk of hindering the development of one of its main competitors.

Musk’s own platform, xAI, developed the chatbot Grok but has lagged behind competitors. xAI debuted in 2023, a year after ChatGPT.

OpenAI believes Musk understands the company’s decision to open a profit division; he left only because he failed to become CEO.

It is expected that Ultraman will also testify during the trial.

A verdict is expected in late May.

2. From Ally to Rival: The Past of Musk and Ultraman

This lawsuit concerns the future of artificial intelligence. While only one may ultimately win, both could suffer significant damage in this storm.

This melee is likened to two heavyweight boxers entering the ring. One observer even compared it to King Kong versus Godzilla.

But when they first met, Ultraman called Musk his idol.

Musk and Ultraman met in 2012, introduced by a Silicon Valley investor. At that time, Ultraman was only in his twenties, 14 years younger than Musk, and later he introduced Musk to the concept of OpenAI. Both believed in the potential of this technology.

In a joint meeting in 2015, Musk said AI was “the most likely technology to change humanity,” but also believed that AI was “very unstable” and “full of difficulties.”

(Musk and Ultraman’s photo from 2015, the year they co-founded OpenAI.)

In December 2015, OpenAI was officially established. Positioned as a nonprofit, aiming to develop AGI safely, benefit all humanity, and prevent AI from being monopolized by giants.

By 2017, AI computing power demand surged. Musk advocated for rapid commercialization, integrating OpenAI into Tesla, while Ultraman prioritized nonprofit and cautious commercialization, leading to internal conflicts.

In February 2018, conflicts intensified. Musk resigned as co-chair and left the board, retaining a small stake. Publicly, he said it was to manage Tesla and avoid conflicts of interest. Privately, he believed OpenAI was “too academic, too slow, doomed to fail.” After this, Ultraman became CEO, leading subsequent commercialization efforts.

In March 2019, OpenAI restructured. In July, it received a $1 billion investment from Microsoft, partnering exclusively on Azure cloud computing. OpenAI began to close-source core models (like GPT-2 not fully open-sourced). This drew criticism from Musk: OpenAI was now controlled by Microsoft, betraying its original nonprofit mission, becoming a “closed-source profit company,” OpenAI.

In November 2022, ChatGPT (GPT-3.5) launched, reaching 100 million users in five days, exploding globally, and boosting OpenAI’s valuation.

In May 2023, Microsoft invested an additional approximately $10 billion, holding about 49% stake (without control). In November, OpenAI’s board planned to dismiss Ultraman, but Microsoft supported Ultraman. At the end of the month, Ultraman returned as CEO, restructured the board, and solidified control. Musk criticized this, saying OpenAI was “completely commercialized, abandoning its nonprofit promise,” and accelerated the development of a competitor, xAI.

In 2024, GPT-4o was released, with leading multimodal capabilities; OpenAI’s valuation reached $800 billion.

Meanwhile, xAI’s valuation was roughly half of that. In May of that year, xAI completed Series B funding of $6 billion, post-money valuation of $240 billion; in December, Series C funding of $6 billion, valuation between $400 and $500 billion. In March, xAI released its first large model, Grok-1, tested on X; in August, it launched Grok-2 preview, with a 256k context window, close to GPT-4 but still slightly weaker overall.

By December 2025, Musk officially sued OpenAI and Ultraman, claiming the 2019 restructuring was illegal, demanding a return to pure nonprofit, dismiss Ultraman, and regain control; the lawsuit continues to ferment.

3. Is the Lawsuit Unfair Competition Behind It?

Longer timeline: Musk’s attempt to acquire OpenAI has been ongoing for years. As mentioned above, in 2017, Musk proposed merging OpenAI into Tesla, intensifying conflicts with Ultraman.

On February 14, 2025, Musk led multiple investment firms to formally submit an acquisition offer to OpenAI. Specifically, Musk, as the lead, joined Valor Equity Partners, Baron Capital, Atreides Management, and others, proposing to buy OpenAI’s nonprofit parent for $97.4 billion.

Musk publicly stated this acquisition was to “restore open-source, safety-focused justice to OpenAI,” reversing Ultraman’s commercial route, and returning to its original 2015 nonprofit mission, preventing OpenAI from being further driven by capital and deviating from public good. His lawyer added that if OpenAI agreed to stop transforming into a profit company, Musk would withdraw the offer.

On that day, OpenAI’s board officially rejected the acquisition proposal, stating “OpenAI is not for sale,” and unanimously believed the offer was not in the company’s best interests, accusing Musk of “disrupting competition and slowing OpenAI’s progress.” Ultraman also said the offer was a competitor’s interference, emphasizing that OpenAI’s core mission is to create beneficial AGI, and it would not accept any acquisition that deviates from that mission.

Since then, Musk has further reinforced his lawsuit stance against OpenAI, adding suspicion of “unfair competition.”

Ultraman once told Musk: “I very much appreciate all you’ve done — I think there would be no OpenAI without you — when you publicly attack OpenAI, it really hurts me.”

Musk responded: “I hear you, I certainly did not mean to hurt you, and I apologize for that, but the fate of civilization is at stake.”

For Musk and OpenAI, this matter is of great importance.

By the end of 2023, Musk was still advocating for a pause in AI development. But now, Musk is deeply involved in the (AGI) race.

Ross Chen Lu, executive director of the UCLA Lowell Milken Center for Nonprofit and Charitable Organizations and law professor, pointed out: “If Musk wins, it could lead to the failure of a major competitor in the AGI race. Whoever wins this race will hold significant power.”