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Technology
12 September 2025

Sam Altman And Elon Musk Rivalry Reshapes AI Industry

OpenAI and xAI's founders clash over lawsuits, ethics, and the future of artificial intelligence as government contracts and massive investments raise the stakes.

In the ever-evolving world of artificial intelligence, few rivalries have captured the public’s imagination quite like that between Sam Altman, CEO of OpenAI, and Elon Musk, the tech billionaire behind Tesla, SpaceX, and now xAI. Their story, a blend of collaboration, admiration, and fierce competition, has shaped not only the direction of their respective companies but also the broader trajectory of AI development worldwide.

According to a recent interview with Tucker Carlson, published on September 11, 2025, Sam Altman opened up about his complicated relationship with Musk, offering rare insight into both the beginnings of OpenAI and the personal dynamics that continue to fuel headlines. Altman, reflecting on the origins of OpenAI in 2015, described Musk as “an incredible hero, a great jewel for humanity.” Musk, after all, was instrumental in OpenAI’s founding, providing strategic guidance and significant financial support—though the exact amount has been a matter of some debate, with OpenAI later clarifying that Musk’s contribution was below $45 million, despite earlier reports suggesting it could have reached $100 million (as reported by Benzinga and BBC).

For a time, Altman looked up to Musk as a visionary and a role model. “I really, for a long time, looked up to him as just an incredible hero and great jewel of humanity,” Altman told Carlson. But as OpenAI’s ambitions grew and the company began to chart its own course—partnering with Microsoft and transforming from a non-profit to a capped-profit model—the relationship soured. Musk, expressing doubts about OpenAI’s direction, reportedly told the team they had a “0% chance of success.” Altman recounted, “He kind of told us we had a 0% chance of success. Then we did okay and I think he got understandably upset.”

Musk’s departure from OpenAI’s board in 2018 marked a turning point. What began as a partnership based on mutual respect and a shared vision for safe, beneficial AI soon spiraled into public criticism, lawsuits, and direct competition. Musk accused OpenAI of straying from its original nonprofit mission, especially after the company’s high-profile partnership with Microsoft. He didn’t stop at words—he filed multiple lawsuits against OpenAI and Altman, some of which were withdrawn and later refiled, underscoring the depth of the rift (BBC, Benzinga).

In 2023, Musk launched xAI, a company that many (including Altman) see as a direct competitor to OpenAI. Altman described Musk’s efforts as running “a kind of clone” of OpenAI, a sentiment he echoed in his interview with Carlson: “He now runs his kind of competitive clone with xAI and has tried to slow us [OpenAI] down and sue us.” xAI quickly made waves, raising over $12 billion to develop cutting-edge AI tools and models. The rivalry was further stoked by Musk’s provocative social media posts—at one point, he suggested OpenAI should rename itself “ClosedAI”—and by legal action, including a recent lawsuit against Apple and OpenAI, alleging that Apple’s App Store unfairly favored ChatGPT over xAI’s Grok and other models. xAI is seeking billions in damages (Benzinga).

While the personal rivalry between Altman and Musk often grabs headlines, the business stakes are just as high. OpenAI has secured major partnerships with U.S. federal agencies, including a $200 million defense contract to develop AI capabilities for national security purposes. The Department of War praised the deal, stating it would “address critical national security challenges in both warfighting and enterprise domains.” OpenAI’s AI model, ChatGPT, is now being used across federal agencies, with a special offer granting access for just $1 over the next year. The company also collaborates with agencies like the Air Force Research Lab and NASA, cementing its role at the heart of America’s AI ecosystem (Benzinga).

Yet, the military applications of ChatGPT raise their own ethical questions. When asked by Carlson about how he felt regarding the use of OpenAI’s technology by the military, Altman admitted, “I am totally aware of the fact that there’s probably people in our military using it for advice about how to do their jobs and I don’t exactly know how to feel about that.” It’s a candid admission that underscores the complex responsibilities facing today’s AI leaders.

Meanwhile, xAI has been making headlines for its massive $40 billion investment in a Memphis data center, home to the Colossus 1 supercomputer and the Grok AI model. This ambitious expansion, however, hasn’t come without controversy. Rights groups have criticized the environmental impact of the facility, alleging that it disproportionately affects the African American community in Memphis. The debate highlights the broader societal challenges that accompany rapid technological advancement, from environmental justice to equitable access (Benzinga).

For Musk, the push into AI and robotics extends far beyond xAI. Tesla’s newly unveiled Master Plan IV places AI at the center of the company’s future, with Musk predicting that the forthcoming Optimus version 3 robot could become “the biggest product ever.” He’s gone so far as to suggest that Optimus will represent over 80% of Tesla’s future value. It’s a bold vision, one that underscores Musk’s belief in the transformative power of artificial intelligence—and his determination to stay at the forefront of the field (Benzinga).

Despite the rivalry, Altman maintains a nuanced perspective on Musk. He remains “very grateful” for Musk’s early help with OpenAI and continues to recognize the “incredible things Musk has achieved.” At the same time, Altman is candid about the traits he doesn’t admire, reflecting a relationship marked by both respect and frustration. “I have different feelings about him now and he has traits that I don’t admire,” Altman said, capturing the complexity of their ongoing saga.

As the competition between OpenAI and xAI heats up, the stakes are higher than ever. Their evolving dynamic is not just a personal drama but a reflection of the broader competitive and ethical challenges facing the AI industry. With billions of dollars, national security, and the future of technology on the line, the story of Altman and Musk is far from over. In fact, it may be just getting started.

Their rivalry, with all its twists and turns, continues to shape the landscape of artificial intelligence—reminding us that even the brightest minds can disagree on the best path forward, and that the future of AI will be written not just in code, but in the complex, very human relationships at its core.