Elon MuskLawsuits against OpenAI and MicrosoftIn the US, the US is demanding as much as $1340 billion in damages; however, Elon Musk's xAI has faced a cease and desist order from California Attorney General Rob Bonta for its chatbot Grok's alleged generation of unauthorized deepfake pornographic images, requiring it to immediately cease its illegal activities.
Elon Musk Seeks Justice from OpenAI: He Believes He Has a Right to a Share of the Profit
The feud between Elon Musk and OpenAI has escalated once again. According toBloomberg News reportedThe latest lawsuit alleges that OpenAI has deviated from its non-profit mission and claims that Elon Musk should be awarded between $790 billion and $1340 billion in damages, arguing that OpenAI’s collaboration with Microsoft has resulted in “wrongful gains.”
In the document, Elon Musk emphasized that he provided $3800 million in "seed funding" during OpenAI's early stages, accounting for approximately 60% of the seed funding available to non-profit organizations at the time. In addition, he devoted considerable effort to recruiting key personnel, introducing business contacts, and providing entrepreneurial advice.
How was this astronomical compensation calculated? C. Paul Wazzan, a financial economist hired by Elon Musk, estimated that OpenAI's "unjust enrichment" ranged from $655 billion to $1094.3 billion, while Microsoft received between $133 billion and $250.6 billion. Therefore, Elon Musk believes that since OpenAI's current valuation has reached $5000 billion, as its largest early investor, he is entitled to a share.
xAI's backyard is on fire: California Attorney General cracks down on "spicy mode".
While Elon Musk was busy raising funds, his AI company xAI ran into a brick wall in California. A few days after a formal investigation began, California Attorney General Rob Bonta issued a cease and desist order against xAI, demanding that the company immediately cease generating unauthorized sexual content.
The controversy centers on Grok's image generation feature, which has been found to easily "undress" real people (including minors) with a single click, or replace their photos with revealing clothing such as bikinis. Rob Bonta points out that xAI developed a feature called "Spicy Mode" to generate explicit content and even used it as a marketing selling point.
The Attorney General's office has strongly demanded that xAI cease "aiding or abetting" the production and distribution of non-consensual digital sexual content, which violates multiple California civil and criminal codes. Although the platform subsequently adjusted its policies, restricting Grok's raw image feature to paid access and blocking the ability to edit real photos into bikinis in areas where this is illegal, the California Department of Justice still requires xAI to provide specific improvement measures within five days.
xAI has been producing deepfake nonconsensual intimate images used to harass women & girls across the internet.
This is unacceptable. We're demanding immediate answers on their plan to stop the creation & spread of this content.
We'll use all tools at our disposal to keep… pic.twitter.com/2elGTV0wRq
— Rob Bonta (@AGRobBonta) January 16, 2026
Analysis of viewpoints
In the case of OpenAI, Elon Musk stood on the moral high ground, accusing his former partner of being "ungrateful" and even betraying his promises of AI safety and non-profitability; but in the operation of xAI, Grok became a breeding ground for creating deepfake pornographic content due to the lack of security rails, and was even officially certified to exacerbate the chaos with its "spicy mode".
While waging legal battles to demand hundreds of billions of dollars in "unjust enrichment" from his opponents, Elon Musk's own products are threatened with lawsuits due to lax regulation. This perhaps reflects his true attitude towards AI: he wants to be the "AI safety gatekeeper" who saves humanity, yet he doesn't want to give up the opportunity to leverage AI's chaotic energy to boost traffic and user numbers. However, in the current climate of increasingly stringent laws and regulations, this two-faced approach is likely to become increasingly difficult to implement.
