The legal battle billed as the "trial of the century" between Tesla and SpaceX CEO Elon Musk and OpenAI CEO Sam Altman entered its second day. Musk, testifying for more than nine hours, expressed his determination to "protect America's culture of philanthropy." Altman left the courtroom before Musk took the stand, asserting that OpenAI had never promised to maintain its nonprofit character.
The second day of the trial between the two CEOs concluded at the U.S. District Court for the Northern District of California, Oakland Division, on Monday, according to CNBC. Taking the stand as the first witness, Musk testified that "OpenAI started as a charitable organization for the benefit of all humanity."
Musk filed suit in 2024 against OpenAI, Altman and OpenAI President Greg Brockman, alleging that they had abandoned their commitment to keep the AI research lab as a nonprofit. OpenAI established a for-profit subsidiary after Musk stepped down from its board in 2018. Musk claims his $38 million donation was used for unauthorized commercial purposes.
Musk said the idea for founding OpenAI came to him after he had an argument with Google co-founder Larry Page over AI safety, adding that he wanted to create an open-source alternative capable of countering Google. OpenAI's 2015 founding charter was also submitted as evidence. The charter states that the organization would "build open-source technology for the public benefit and is not organized for the private gain of any person."
Musk emphasized, however, that he "did not oppose establishing a small for-profit subsidiary as long as the tail was not wagging the dog." Regarding the future of AI, he said it "could either make us more prosperous or kill us all," forecasting that "AI could become as smart as humans as early as next year."
OpenAI's attorney William Savitt countered that "Musk is here because things didn't go his way at OpenAI." Savitt argued that "Musk never expressed the view that OpenAI must remain a nonprofit," adding that "he only supported a for-profit conversion on the condition that he would hold control." Savitt also pointed out that Musk had not paid in full the donation he had pledged.
Russell Cohen, the attorney representing co-defendant Microsoft (MSFT), rebutted that Microsoft neither helped nor could have helped with what Musk alleges was a breach of OpenAI's public-benefit trust. Cohen argued that "Musk's lawsuit is time-barred," citing as evidence a post Musk made on X in September 2020 stating that "OpenAI has effectively been captured by Microsoft." Microsoft has invested more than $13 billion in OpenAI since 2019.
Cohen noted in particular that Musk made no comment on the matter for five years after Microsoft and OpenAI announced their partnership, criticizing that "once ChatGPT became a massive success, he set up xAI, a for-profit competitor, and only then suddenly raised issues with Microsoft."
The case centers on two issues: "breach of charitable trust" and "unjust enrichment." Musk's side argues that his $38 million donation constituted a charitable trust requiring OpenAI to permanently maintain its nonprofit status.
In a court filing in January, Musk's side stated that up to $134 billion in unjust enrichment should be disgorged. He later shifted his position, demanding that the amount be redirected to OpenAI's charitable arm. He is also seeking the removal of Altman and Brockman and the nullification of the capital restructuring carried out last October. Altman, Microsoft CEO Satya Nadella and former OpenAI director Shawn Zilis are also expected to testify during the trial.
Meanwhile, OpenAI carried out a structural overhaul last October, shifting to a framework in which the nonprofit "OpenAI Foundation" holds a controlling stake in the for-profit entity "OpenAI Public Benefit Corporation (PBC)." The foundation holds roughly 26%, while Microsoft holds about 27%. By contrast, xAI, which Musk founded in 2023, launched as a PBC but withdrew its public-benefit commitment in 2024, merging with X last year and with SpaceX this year.
