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Elon Musk is pursuing litigation against OpenAI and Microsoft seeking up to $134 billion in restitution tied to claims that OpenAI abandoned its original nonprofit mission and that OpenAI/Microsoft were unjustly enriched through their partnership. Reporting describes damages calculations attributed to economist C. Paul Wazzan, while OpenAI challenges the methodology as opaque and not tied to specific alleged wrongful conduct, arguing it improperly discounts contributions from other founders, employees, and investors and would be difficult for a jury to adjust across claims.
Separately, California Attorney General Rob Bonta has reportedly served Musk’s AI company xAI with a cease-and-desist order over Grok’s alleged ability to generate non-consensual explicit deepfake imagery, including “undressing” real individuals and potentially involving minors. The juxtaposition highlights escalating legal and regulatory pressure around Musk’s AI-related activities: a high-stakes civil damages push against OpenAI/Microsoft alongside state action targeting alleged misuse of generative image capabilities at xAI.
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Court filings indicated that the litigation between Musk and OpenAI was scheduled to go to trial in April. The disclosure established the expected next major procedural milestone in the case.
OpenAI submitted a court filing attacking expert witness Wazzan's methodology in Musk's case, arguing the damages analysis improperly credited Musk for OpenAI's value, used an unverifiable 'black box' approach, and failed to allocate damages by claim. OpenAI also argued the proposed remedy was legally and practically implausible for a nonprofit.
Following the California action, X reportedly placed Grok image generation behind a paywall and limited some features in certain jurisdictions. The changes were presented as a response to concerns over inadequate safety guardrails.
California Attorney General Rob Bonta issued a cease-and-desist order alleging Grok could generate non-consensual pornographic deepfakes, including content involving minors. The order demanded xAI stop facilitating the creation and dissemination of involuntary digital pornography and provide an account of corrective measures within five days.
Elon Musk expanded his lawsuit against OpenAI and Microsoft, seeking an estimated $79 billion to $134 billion in damages and alleging OpenAI abandoned its original nonprofit mission and was unjustly enriched through its partnership with Microsoft. The damages claim relied in part on an economist's estimate of alleged wrongful gains.
Elon Musk was involved in OpenAI's early formation, including providing about $38 million in seed funding, helping recruit talent, and advising the organization in its initial stages. These early contributions later became central to his claims in litigation against OpenAI and Microsoft.
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A class-action lawsuit against **xAI** has been expanded with two additional anonymous plaintiffs, including a minor, who allege the company’s **Grok** tool was used to generate nonconsensual deepfake child sexual abuse material from their real images. The amended complaint says perpetrators chose Grok because it was less restrictive, and in one case allegedly used it to create more than **7,000** illicit images of an 11-year-old girl that were later distributed online. Plaintiffs say the spread of the generated material caused severe emotional distress, humiliation, and ongoing anxiety. The lawsuit also adds **Stability AI** as a defendant, alleging its **Stable Diffusion** models were trained on explicit web-scraped data, including CSAM, and released without adequate safeguards to prevent downstream abuse. The complaint further alleges that protections could be bypassed through jailbroken or modified versions of the models and that xAI failed to provide law enforcement with generated-image evidence and IP address information after reporting only the original image to **NCMEC**. xAI and Stability AI did not respond to requests for comment, according to the reports.
Jul 9, 2026
Reporting focused on **AI infrastructure scale-up and compute constraints**: OpenAI CFO **Sarah Friar** outlined an infrastructure roadmap that ties revenue growth directly to increased compute capacity, describing available compute rising from ~0.2 GW (2023) to ~0.6 GW (2024) and projecting ~1.9 GW by 2026 alongside projected ARR exceeding **$20B**. Separately, Microsoft job postings indicate continued **datacenter expansion in APAC**, including hiring “Senior Energy Program Managers” to secure power interconnections and energy supply contracts for regional datacenters—underscoring the operational reality that AI datacenters are increasingly **power-limited**. Other items in the set are adjacent but not the same story: one report covers **Elon Musk’s lawsuit against OpenAI/Microsoft** and a California Attorney General **cease-and-desist** aimed at xAI’s *Grok* over alleged generation of non-consensual deepfake sexual imagery, while another describes Musk’s claimed roadmap for **Tesla AI processors** on a nine-month design cadence (AI5/AI6 and beyond) and the automotive safety-certification constraints that can slow deployment. A separate market-research piece describes China’s lead in **humanoid robot deployments** (nearly 13,000 of ~16,000 installed globally in 2025), which is AI-adjacent but not directly tied to the infrastructure/power and compute-roadmap thread.
Jun 29, 2026
X’s Grok chatbot drew international condemnation after users generated nonconsensual sexualized images of real women and girls, including child-like and potentially illegal abuse material, from uploaded photos and public images. Reporting from the BBC, AP, The New York Times, Rest of World, and others said users exploited Grok’s image features to “undress” people, create bikini or explicit edits, and circulate abusive content on and beyond X, while watchdogs including the Internet Watch Foundation identified child sexual imagery that appeared to have been produced by the tool. Governments and regulators in the UK, EU, India, France, Ireland, California, Malaysia, and Indonesia responded with investigations, ultimatums, raids, or access restrictions, arguing that X’s safeguards and moderation were inadequate. X and xAI said they would remove illegal child-related content, suspend offending accounts, cooperate with authorities, and later block Grok from undressing images of real people, but officials said limiting some image-generation features to paying subscribers did not address the underlying harm. The fallout expanded into formal legal action as teenage girls sued xAI in federal court, alleging Grok created child sexual abuse material and caused severe harm, while policymakers in several countries weighed broader bans or tighter rules on AI “nudification” tools. The controversy added to wider scrutiny of Grok’s safety controls and X’s handling of generative AI abuse on a global platform.
Jun 29, 2026