Musk Takes Stand in OpenAI Trial Over Nonprofit's Shift to For-Profit
Elon Musk testified Tuesday in federal court in Oakland, California, in a lawsuit against Sam Altman and OpenAI that centers on whether the company abandoned its founding mission as a nonprofit focused on safe AI development. Musk, who co-founded OpenAI in 2015, is seeking damages and Altman's removal from the company's board.
The civil case hinges on a straightforward claim: OpenAI converted from a nonprofit to a for-profit entity in violation of commitments made to Musk and the public. "It's not OK to steal a charity," Musk said during his testimony.
The nine-person jury is expected to hear three weeks of arguments. Musk also named Microsoft as a defendant, citing its $2 billion investment in OpenAI and control over the company's intellectual property through licensing agreements.
The Core Dispute
Musk's legal team argues that OpenAI's 2022 deal with Microsoft violated the company's founding principles. The agreement transformed OpenAI from an open-source project into a closed system where Microsoft held significant control and financial benefit.
Steven Molo, Musk's attorney, told jurors that while nonprofits can have for-profit subsidiaries, those subsidiaries must advance the nonprofit's mission. In OpenAI's case, he said, the for-profit arm became the primary focus, abandoning the original commitment to safe and open AI development.
OpenAI's defense centers on a different narrative. The company's lawyer, William Savitt, told jurors that Musk is pursuing the lawsuit because he failed to gain control of OpenAI. Savitt said Musk wanted to merge OpenAI with Tesla and own more than 50% of the company.
Savitt also challenged the claim that OpenAI promised to remain a nonprofit forever, saying no such commitment was documented.
What Musk Told the Court
During his testimony, Musk described founding OpenAI after a conversation with Google co-founder Larry Page. Musk said he wanted to create a counterbalance to Google's dominance in AI development at a time when the company controlled most of the computational resources and talent in the field.
Musk acknowledged that OpenAI needed funding beyond donations and that he supported the creation of a for-profit subsidiary. The condition, he said, was that profit would be capped and the for-profit would dissolve once artificial general intelligence was achieved.
When asked about his views on AI, Musk said he expects systems to become "smarter than any human" within the next year. He compared the challenge of AI safety to raising a child: instilling values like honesty and integrity matters because "you can't control that child" once it grows up.
What Comes Next
Musk is expected to continue testifying Wednesday. Sam Altman, OpenAI's CEO, and Satya Nadella, Microsoft's CEO, are also scheduled to testify.
The trial outcome could influence how AI companies structure themselves and whether nonprofit organizations can shift to for-profit models without legal consequences. For IT professionals tracking AI development and governance, the case raises questions about corporate structure, mission alignment, and the responsibilities of AI companies as the technology becomes more powerful.
Understanding these issues matters for developers and engineers working on AI systems. Learn more about how generative AI and LLM business models function, or explore ChatGPT courses to understand the technology at the center of this dispute.
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