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OpenAI’s legal clash with Elon Musk intensifies while the Sora video AI app is discontinued, highlighting strategic and financial pressures on the AI leader.
OpenAI’s courtroom drama took another turn on Thursday as the Musk‑OpenAI trial entered its third week, with the company defending its shift to a for‑profit model against claims that Elon Musk was misled into funding the startup as a nonprofit [1]. At the same time, OpenAI announced the imminent shutdown of its Sora mobile app, the consumer front for its AI video model launched in September 2025 [2].
The lawsuit centers on Musk’s allegation that co‑founders Sam Altman and Greg Brockman persuaded him to donate millions on the promise that OpenAI would remain a nonprofit, only to later convert it to a for‑profit entity. Musk is seeking damages and a reversal of that transition, arguing the change also blocked his proposal to merge OpenAI with Tesla and name him CEO. OpenAI counters that Musk’s anger stems from the rejected merger offer. During testimony, Brockman disclosed that he holds a roughly $30 billion stake in the AI firm, underscoring the high‑stakes nature of the dispute [1]. The trial also revealed personal details, such as board member Shivon Zilis’s IVF pregnancy and her claim that she never acted as a “funnel” for Musk’s information [1].
Parallel to the legal battle, OpenAI confirmed that the Sora app will be retired, though it gave no firm timeline. The decision follows reports that the service may be costing the company up to $15 million per day, a burden that could clash with plans to position OpenAI for a potential IPO [2]. Users reacted with a mix of disappointment and relief, while insiders suggest the underlying Sora video model could be folded into ChatGPT in the future [2].
Both developments signal a pivotal moment for OpenAI. The lawsuit could force a structural rethink that impacts governance, funding, and Musk’s influence, while the Sora shutdown hints at tighter cost controls as the company eyes public markets. How OpenAI balances these legal pressures with its product strategy will shape its trajectory in the rapidly evolving AI landscape.
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 2 outlets · Jun 16, 2026 · How we report
OpenAI was founded in December 2015 as a nonprofit organization.
Microsoft has invested over $13 billion in OpenAI and provides Azure cloud computing resources.
OpenAI developed the GPT series of large language models, the DALL‑E text‑to‑image models, and the Sora text‑to‑video models, with ChatGPT released in November 2022.
OpenAI faced lawsuits over alleged copyright infringement and experienced a brief removal and reinstatement of CEO Sam Altman in 2023, along with criticism over its restructuring to a public benefit corporation.
Roughly half of the AI safety researchers left, citing the company's deprioritization of safety goals.