Key Points
- The courtroom battle between Elon Musk and OpenAI commences Monday with jury selection in California federal court
- Musk alleges OpenAI abandoned its original nonprofit mission during its 2019 transformation into a for-profit entity
- The Tesla CEO demands $150 billion in compensation and wants Sam Altman and Greg Brockman ousted from their positions
- Previously sealed documents reveal behind-the-scenes discord among OpenAI’s founding members regarding authority and financial direction
- OpenAI’s anticipated public offering, potentially reaching a $1 trillion market cap, hangs in the balance
The long-awaited legal confrontation between Elon Musk and OpenAI reaches the courtroom this week. The proceedings kicked off Monday in California’s Northern District federal courthouse, with jury selection underway and opening statements scheduled for Tuesday.
Musk helped establish OpenAI in 2015 along with Sam Altman and Greg Brockman as co-founders. According to his legal filings, he contributed more than $44 million to the organization based on assurances it would maintain its nonprofit status. However, official court documentation places his actual contributions at approximately $38 million spanning 2016 through 2020.
The billionaire entrepreneur contends that OpenAI’s 2019 transformation into a for-profit structure occurred without his knowledge or consent. His lawsuit targets both OpenAI and Microsoft for $150 billion in damages, stipulating that any recovered funds be directed to OpenAI’s charitable division.
Beyond monetary compensation, Musk’s demands include reversing OpenAI’s for-profit status entirely. His petition calls for the removal of both Altman and Brockman from their executive roles, along with stripping Altman of his board position.
The roster of witnesses resembles Silicon Valley’s elite directory. Testimony will feature in-person appearances from Elon Musk, Sam Altman, and Microsoft’s CEO Satya Nadella. Shivon Zilis, who previously served on OpenAI’s board and is the mother of four of Musk’s children, will play a significant role as a witness.
Previously confidential materials unveiled during discovery paint a picture of internal friction among OpenAI’s founding members. A 2017 diary entry from Brockman questioned: “This is the only chance we have to get out from Elon. Is he the ‘glorious leader’ that I would pick?”
In a January 2018 email to associates, Musk declared that “OpenAI is on a path of certain failure relative to Google.” His departure from the board followed soon thereafter.
The Controversy Over Profit Status
OpenAI underwent restructuring in 2019, establishing a for-profit subsidiary under nonprofit oversight. By October 2025, it had transitioned to public benefit corporation status. Microsoft now controls a 27% ownership position. The nonprofit component received equity valued at $130 billion.
OpenAI’s latest financing round established an $852 billion company valuation.
OpenAI maintains that Musk was fully informed about the for-profit restructuring plans and even proposed merging OpenAI with Tesla under his leadership. According to OpenAI’s account, when Altman and Brockman rejected this proposal, Musk departed and launched his competing artificial intelligence venture, xAI.
Microsoft rejects allegations of conspiracy with OpenAI, asserting its partnership commenced only following Musk’s exit from the organization.
The Stakes
The litigation threatens to complicate OpenAI’s public offering strategy, which projects a potential $1 trillion company valuation. A series of unflattering revelations during trial proceedings could create significant obstacles to that objective.
The jury will deliver an advisory verdict only. US District Judge Yvonne Gonzalez Rogers maintains ultimate decision-making authority. Should defendants be found liable, she possesses the power to mandate that OpenAI unwind its for-profit restructuring.
Proceedings are anticipated to continue through mid-May.
