Musk Engages in $180 Billion Legal Battle with OpenAI as X’s Financial Services Take Shape

Key Issue: Whether OpenAI Broke Its "Nonprofit Promise"
X Aims to Become a 'Super App' with High Interest Rates and Cashback

Elon Musk, CEO of Tesla, is taking bold moves simultaneously in two sectors: artificial intelligence (AI) and financial platforms. On one front, he has launched a legal battle against OpenAI and CEO Sam Altman for 180 billion dollars, which is approximately 265 trillion won. On the other, he is preparing to launch "X Money," a product that combines payment and banking functions within the social networking service X (formerly Twitter).

Foreign media including The Wall Street Journal (WSJ) and AFP reported that the federal court in Oakland, California, has begun the jury selection process for the lawsuit filed by Musk against OpenAI and CEO Sam Altman. Photo by AP and Yonhap News.

On April 26 (local time), foreign media outlets including The Wall Street Journal (WSJ) and Agence France-Presse (AFP) reported that the federal court in Oakland, California, USA has begun the jury selection process for the lawsuit Musk filed against OpenAI and CEO Altman. The key issue in this trial is whether OpenAI, which was originally founded with nonprofit and public interest goals, has undermined those objectives and transformed into a for-profit company. Musk initially raised a total of 26 charges, including fraud, but recently withdrew the fraud-related allegations, which are complicated to prove, in order to expedite the proceedings. As a result, the main issues in this trial are expected to be violations of public interest trust and unjust enrichment.

From "AI for humanity" to "profit-seeking with Microsoft"... Founders go their separate ways

Musk, Altman, Greg Brockman, and others jointly founded the nonprofit organization OpenAI in 2015 to counter Google’s monopoly on AI and to develop AI for the benefit of all humanity. Musk is reported to have donated several million dollars as initial operating funds. However, in 2018, differences over the direction of technology development and control led Musk to leave the OpenAI board, straining the relationship between the two sides. At the time, Musk reportedly suggested merging OpenAI with Tesla, but the proposal was not accepted. Subsequently, in 2023, he established xAI, the developer of the AI chatbot "Grok," entering into direct competition with OpenAI.

Elon Musk, Sam Altman, Greg Brockman, and others jointly founded the nonprofit organization OpenAI in 2015 with the goal of countering Google's AI monopoly and developing AI that benefits all of humanity. Photo by Reuters Yonhap News Agency

After Musk’s departure, OpenAI established a for-profit subsidiary in 2019 to secure funds for large-scale AI training. In the same year, it attracted a 1 billion dollar investment from Microsoft (MS), and after the launch of ChatGPT in 2022, it received an additional 10 billion dollar investment from Microsoft, emerging as a key player in the global AI industry. Musk's side argues that OpenAI secured donations and trust based on its promise to "serve humanity," but later undermined its founding purpose by establishing a for-profit subsidiary and forming a partnership with Microsoft.

OpenAI criticizes Musk's lawsuit as a "campaign to expand his own power and wealth." They argue that the introduction of a for-profit structure was inevitable to bear the enormous costs required for developing high-performance AI, and that Musk himself had previously attempted to commercialize OpenAI. AP Yonhap News

On the other hand, OpenAI criticizes Musk’s lawsuit as "a campaign to expand his own power and wealth." They state that adopting a for-profit structure was inevitable to cover the enormous costs required for developing high-performance AI, and claim that Musk himself had previously attempted to commercialize OpenAI. The court has decided to divide the trial into two phases: the first to determine liability, and the second to discuss remedies. Even if OpenAI is found liable, it is reported that the jury’s decision regarding the scale of unjust enrichment to be recovered may only serve as a non-binding recommendation. On the prediction market platform Kalshi, the probability of Musk winning is estimated to be around 40%.

X enters the financial market with 'X Money'... Offering 6% interest and 3% cashback

Meanwhile, Musk is accelerating X’s transition into a financial platform, separate from the legal dispute with OpenAI. According to Bloomberg and other sources, X plans to release "X Money," which integrates banking and payment platform functions, to the general public in the form of early access in the near future. According to users currently testing the service, X Money offers an annual interest rate of 6% on cash savings and 3% cashback on payments. Peer-to-peer remittances between users are possible without additional fees, and it is reported that a Visa debit card bearing the X ID can also be issued.

X Money is considered a core feature of the 'Super App' strategy that Musk has been pushing for a long time. Musk, co-founder of PayPal, has announced his vision to grow X into a comprehensive platform encompassing payment, remittance, content, reservations, and commerce, similar to China's WeChat, leveraging his experience in establishing a position in the payment industry. Reuters Yonhap News

Content creators who receive advertising revenue distribution on X are also expected to be able to use X Money instead of the existing online payment service Stripe. Bloomberg reported that the annual 6% interest rate is about 15 times the average US savings rate, and that the service may include features such as free remittances, a metal Visa debit card, and an AI assistant for analyzing spending patterns.

X Money is considered a core feature of Musk's long-standing "super app" strategy. Drawing on his experience as a co-founder of PayPal and his established position in the payments industry, Musk has expressed a vision to develop X into an all-in-one platform encompassing payments, remittances, content, reservations, and commerce, similar to China's WeChat. However, there are significant challenges ahead. In the US, operating a payment platform requires obtaining licenses on a state-by-state basis, and X Money has not yet secured payment licenses in some major jurisdictions, including New York. Whether aggressive benefits such as the 6% annual interest and 3% cashback can be sustained over the long term also remains a key question.

The major lawsuit with OpenAI over AI’s public interest and X’s attempt to transition into a financial platform are both closely tied to Musk’s strategy to secure leadership in future industries. However, given the remaining uncertainties around legal judgments, regulatory approvals, and market trust, it remains to be seen whether Musk’s bold moves will result in actual success.

This content was produced with the assistance of AI translation services.