ELON MUSK AND SAM ALTMAN appeared in federal court in Oakland on Tuesday to hear their lawyers begin what is expected to be a month-long trial to decide the future of OpenAI, the frontier artificial intelligence developer. And after the lawyers set the stage with their opening statements, Musk stepped to the witness stand to kick off his case.
The trial will address Musk’s allegations that OpenAI was chartered as a nonprofit corporation to develop artificial general intelligence for the benefit of humanity, but that under Altman’s leadership, the company has abandoned its charitable mission — with the help of partner and investor Microsoft, also named in Musk’s suit.
Musk seeks far-ranging relief, including the return of more than $100 billion in allegedly ill-gotten gains and the restructuring of OpenAI to restore its charitable mission.
U.S. District Judge Yvonne Gonzalez Rogers presided over a courtroom packed with lawyers, press and curious members of the public.
Scores of news organizations from around the country and world were represented.
Musk and Altman wore business suits and ties and sat with their legal teams; Musk at the counsel table next to his lead counsel directly facing the jury; Altman on a bench behind his counsel table facing the judge, not the jury.
The jury — selected Monday — is composed of nine jurors: six women and three men. They listened without expression as the judge gave them instructions about their role as the trial goes forward. She told the jury that the evidence in a trial is like hundreds of unconnected pieces in a jigsaw puzzle. At the close of the case, the jury will put the pieces together. She said that opening statements are the lawyers’ description of what the picture on the puzzle box looks like.
Musk’s opening
Steven Molo, Musk’s lead trial lawyer, began by quoting from OpenAI’s charter: “For the benefit of mankind as a whole.” Musk, he said, wanted artificial intelligence to be developed in a safe and responsible manner for the benefit of all humanity.
He then had Musk stand and introduce himself to the jury. Musk bobbed his head in greeting.
Molo said that Musk has had a longtime concern about the dark side of advanced artificial intelligence — especially artificial general intelligence (AGI). In 2015, Musk met with then-President Barack Obama to warn him of the risks and urge government regulation of AI and particularly AGI.
When, at age 44, Musk, together with Altman and Gregory Brockman, founded OpenAI as a nonprofit, Musk tutored Altman and Brockman on how to build a business and recruited scientists to OpenAI, including chief scientist Ilya Sutskever. According to Molo, Musk “used his relationships in the tech community” to seek support and favors for the OpenAI project. Musk also put in his own money — $38 million — as donations.
As the development work went forward, the company needed to raise more capital for OpenAI, and the founders discussed creating a for-profit subsidiary to support the nonprofit’s mission.
Molo said that a for-profit subsidiary needed to support its charitable parent. He used the analogy of a museum gift shop: the gift shop can operate to make a profit but only if the profits go to support the museum’s mission. The gift shop cannot “loot the museum and sell the Picassos.”
Molo said Musk became frustrated with the other founders’ focus on creating a for-profit company. In late 2017, he gave them an ultimatum — either commit to the nonprofit structure or go their own way. Altman and Brockman were quick to say they supported the nonprofit structure.
In February 2018, Musk resigned from the board to focus on his other endeavors. In 2019, Altman created a for-profit subsidiary and made a deal with Microsoft for a $1 billion investment with a “capped return.” Molo said that nothing signaled to Musk that the subsidiary was anything other than the museum shop.
According to Molo, it wasn’t until late 2022, when word began to circulate that Microsoft would invest an additional $10 billion, that Musk realized this was something wholly different. “The museum store sold the Picassos,” he said.
He ended his presentation saying, “No one should be allowed to steal a charity.”
Altman’s opening
William Savitt, counsel for Altman and OpenAI, presented their opening statement Tuesday.
Speaking quickly and determinedly, Savitt told the jury that, when they put together the jigsaw puzzle of evidence, the picture would look very different from what Molo described.
Savitt spoke more about Musk than Altman. He went hard at Musk’s credibility, accusing him of making up statements about how OpenAI would be operated over the course of its growth and development.
He leaned into negative public opinions of Musk, portraying Musk as a bully and telling the jury that Musk “yelled at [OpenAI staff] for not moving fast enough.” He said Musk reneged on a pledge of further financial support when he couldn’t negotiate “absolute control” of OpenAI. He painted Musk as petulant, asserting that Musk was “furious” when “OpenAI had the nerve to succeed without him.”
“He never cared about AI safety,” Savitt said. “He only cares about being on top.”
Addressing the claim that OpenAI leadership had broken their charitable trust, Savitt told the jury that the “OpenAI nonprofit remains in control” of their AI technology, just as it had since it was formed. He said a for-profit subsidiary was essential to raising the capital needed to fund OpenAI’s mission, that Musk’s early contributions were only “enough to keep the lights on” and that Microsoft was brought in as an “anchor investor” in a new structure, approved by OpenAI’s nonprofit board, which left the nonprofit in control. Those investments, he said, were “essential to OpenAI’s mission.”
He said Musk had “waited too long to sue” — beyond what the statute of limitations allows — asserting that Musk had only brought the suit after the launch of his own company, xAI, an OpenAI competitor.
Savitt assured the jury that when they reviewed the evidence, they would be satisfied that Musk is not pursuing the suit for the benefit of humanity but for the benefit of Musk.
Microsoft’s opening statement
Russell Cohen presented Microsoft’s opening statement. He stressed that much of the lawsuit — the dispute between Musk and Altman — doesn’t have much to do with Microsoft. Musk included Microsoft in the lawsuit because he claimed it played a key role in OpenAI’s move to a for-profit structure. According to Cohen, Microsoft came on board after most of the events Musk complains about had already occurred.
He said Microsoft was sued for aiding and abetting a breach of charitable trust by Altman and Brockman. He said Microsoft could only be liable if there was a charitable trust, if it was breached, if Microsoft knew that and if it substantially participated.
He emphasized that Microsoft did extensive due diligence before investing. He said Microsoft had no idea that Musk claimed his charitable gifts carried with them what he called Musk’s “Forever Nonprofit” concept.
He said Microsoft was a for-profit company, conducted itself appropriately and created a win-win scenario for itself and its client OpenAI. He described Microsoft’s increasing investment in OpenAI and OpenAI’s expansion as a “virtuous cycle.”
After the completion of open statements, Musk took the stand and testified for about an hour and a half. He largely followed the narrative laid by Molo in his opening and will expand more on Wednesday. Musk did not complete his direct testimony and has not faced cross examination from the lawyers for OpenAI and Microsoft.