The legal proceedings began on April 28, with Elon Musk filing a lawsuit against OpenAI and its two co-founders, Sam Altman and Greg Brockman. This was reported by Bloomberg.
The case marks the culmination of years of conflict among the trio: all three founded the company in 2015, but their paths diverged over time.
Musk argues that OpenAI’s transition from a non-profit to a commercial entity was a mistake and sets a dangerous precedent for similar projects.
“You can’t steal from a charity, that’s my opinion,” the billionaire told the jury at the start of the trial in federal court in Oakland, California.
Musk believes the implications of the lawsuit extend far beyond the parties involved. If Altman and Brockman’s actions are not deemed wrongful, “it will set a precedent for the plundering of all charitable organizations in America.”
OpenAI’s attorney, William Savitt, stated that Musk’s lawsuit is an attempt to undermine the position of his own company, xAI’s main competitor. According to him, the billionaire himself advocated for a commercial transformation in the early years of the startup.
The outcome of the three-week trial could determine OpenAI’s future, as the company prepares for one of the largest IPOs in history.
Musk demands the reversal of the restructuring.
Musk’s Accusation
Musk devoted much of his initial testimony to discussing his business ventures—Zip2, PayPal, SpaceX, Neuralink, and Tesla. He emphasized his long-standing interest in artificial intelligence, while always fearing the technology’s potential.
According to him, AI can significantly contribute to societal development—and simultaneously lead to its downfall.
Around 2015, Musk discussed the technology’s possibilities “with everyone and anyone,” sharing his concerns. Among his interlocutors was Google co-founder Larry Page, who “did not pay enough attention to AI safety.”
The entrepreneur concluded that a counterbalance to Google’s technologies was necessary—at that time, the corporation was leading in AI development and had “all the money, computers, and talent.”
“I thought: what could be the opposite of Google? Open source, non-profit,” Musk said.
Musk’s lawyer, Steven Molo, told the jury that the trial would prove Altman and Brockman used Tesla’s head’s money, reputation, and advice to launch OpenAI, then abandoned the principles of public benefit and used the project for personal gain.
According to Molo, Microsoft became a knowing accomplice in this betrayal. The corporation invested $13 billion in OpenAI since 2019—a year after Musk left the startup’s board.
Defense Arguments
Savitt recounted that in OpenAI’s first year as a non-profit research lab, Musk wrote:
“It might be better to create a standard C-type corporation with a parallel non-profit.”
The following year, he stated:
“Given the progress made by DeepMind, creating OpenAI as a non-profit might have been a mistake.”
In 2017, Musk and other startup employees realized the company needed significantly more funds for computing resources. After “dozens of meetings,” they agreed on the necessity of creating a commercial division.
“During these lively discussions in 2017, Mr. Musk never expressed the opinion that OpenAI should remain exclusively a non-profit. On the contrary, the situation was quite the opposite,” Savitt stated.
The lawyer claimed that the billionaire “wanted to turn the startup into a full-fledged commercial company and establish absolute control over it, but the other co-founders “refused to hand over AI development management to one person.”
Musk’s Response
Speaking in court, Musk stated that he was always open to creating a commercial “subsidiary”—provided profits were capped and funds directed to the non-profit organization.
One proposal involved equal distribution of shares in the commercial entity among four key executives: Musk, Altman, Brockman, and Ilya Sutskever. The entrepreneur deemed this unfair, as the funding came from him. Musk expected to receive a controlling stake.
What’s Next
The jury will hear from several high-ranking witnesses and examine years of correspondence and corporate documents. Following the testimonies, they will issue a recommended verdict—the final decision will rest with Judge Gonzalez Rogers.
In October, OpenAI completed a restructuring, dividing the company into a commercial corporation and a non-profit foundation.