Elon Musk accused OpenAI CEO Sam Altman of defrauding him and betraying the company’s founding mission: to operate as an open-source nonprofit.
OAKLAND—Tesla CEO Elon Musk took the stand Tuesday as the first witness in a high-stakes federal civil jury trial in Oakland, California, accusing OpenAI CEO Sam Altman of defrauding him and betraying the company’s founding mission: to operate as an open-source nonprofit dedicated to advancing artificial intelligence for the benefit of humanity.
The lawsuit stems from a bitter feud between the two tech titans over the organization they co-founded in 2015, which has since become one of the world’s most valuable and powerful players in the global AI race.
“I think it’s not ok to steal a charity,” Musk told the court. A verdict in favor of the defendants, he ventured, would give license to “looting every charity in America.”
Musk alleges Altman and others duped him into co-founding and funding OpenAI as an open-source nonprofit to counter the dangers of profit-driven AI advancement—then used its corporate conversion to illegally enrich themselves.
Attorneys for OpenAI on Tuesday called the claims a “pageant of hypocrisy” in their opening statement, alleging Musk supported a for-profit venture but abandoned the company when other founders rejected his bid to control it, only filing suit when the competition threatened his own artificial intelligence lab, xAI.
“When he found out OpenAI might be worth a lot of money, that’s when the sour grapes kicked in,” William Savitt, an attorney for the company said.
After a few smaller investments, Musk said he became concerned when Microsoft invested $10 billion in OpenAI in 2022, which he argues allows it to control the company by licensing much of its intellectual property.
The same year, OpenAI introduced its chatbot “Chat-GPT.” The company is now valued at an estimated $852 billion and is gearing up for a public offering later this year.
Musk testified he wasn’t opposed to OpenAI creating a small for-profit subsidiary to fund the charitable trust—“so long as the tail didn’t wag the dog”—but claims the company gutted its nonprofit, transferring most resources to a corporation that is no longer transparent or beholden to the public good.
Steven Molo, an attorney for Musk, likened the suggested model to a museum that opens a gift shop to subsidize its overhead.
“But the museum store can’t loot the museum, sell the Picassos and pocket the profits,” he said. “It’s got to fund the museum’s mission.”
By exclusively licensing its flagship product to Microsoft—which now owns a 27 percent stake in OpenAI—Molo argued, the museum shop had “sold the Picassos and now they’re locked up where no one can see them,” he said.
Musk is accusing Microsoft of aiding and abetting breach of charitable trust—which the company denies, arguing it had nothing to do with the internal dispute over the direction of the OpenAI, and didn’t knowingly violate any conditions set by Musk.
“It was only after the success of ChatGPT,” argued Russell Cohen, an attorney for Microsoft, that “suddenly Microsoft’s role in this board-approved, publicly announced partnership was somehow wrongful.”
