TL;DR
- Elon Musk is suing Sam Altman in a high-stakes trial.
- The case centers on OpenAI’s transition from nonprofit to for-profit.
- Musk claims betrayal over funding and control of OpenAI.
- Witnesses include top tech executives and researchers.
- The trial could reshape the future of AI.
SAN FRANCISCO — It’s a trial so unusual, not even artificial intelligence could make it up. Jury selection begins Monday in a federal courtroom in Oakland, California, in a civil trial that features one tech billionaire, Elon Musk, suing another, Sam Altman. The case is one part business dispute and one part highly personal grudge match — and it could determine the future of red-hot startup OpenAI and its signature app, ChatGPT.
The trial is scheduled to run for four weeks, with a cast of prominent tech executives set to testify. Witnesses are expected to include not only Musk, the CEO of Tesla and SpaceX, and Altman, the CEO of OpenAI, but possibly also Microsoft CEO Satya Nadella and current and former OpenAI board members, as well as top AI researchers.
“Billionaires versus billionaires,” observed Judge Yvonne Gonzalez Rogers, who is presiding over the case, in a hearing last year in Oakland, just across San Francisco Bay from OpenAI’s headquarters. At the heart of the case is OpenAI’s transformation from a nonprofit research center founded in 2015 into a for-profit behemoth, now with billions of dollars in outside investment.
Altman and Musk were the founding co-chairs of OpenAI. OpenAI completed a restructuring in October, with the for-profit organization still reporting to a nonprofit foundation. Musk, who now has a rival AI startup, xAI, says the transformation away from nonprofit status was a betrayal. He alleges that Altman and others accepted his money, advice and time under the pretense of creating a public-spirited enterprise only to later allow people to cash in.
https://x.com/elonmusk/status/2012259593036964054
Musk sued Altman and a long list of other co-defendants in 2024, demanding restitution that he later estimated at $134 billion. Altman’s side counters that Musk is rewriting history. They argue Musk left OpenAI in a huff in 2018 and never gave the full $1 billion he pledged. They also say Musk agreed with them years ago about the need to convert OpenAI into a for-profit company in order to raise capital — only they say Musk wanted OpenAI for himself and argued for folding it into his automaker, Tesla.
Both sides appear to relish the chance to prove themselves correct. “Can’t wait to start the trial. The discovery and testimony will blow your mind,” Musk posted in January on X, which he owns. “Really excited to get Elon under oath in a few months, Christmas in April!” Altman said in February, also on X.
https://x.com/sama/status/2018812624910291186
The two men are similar in a few ways. They’re both tech billionaires with a keen interest in AI who have built massive companies in the Bay Area. They share a love of posting on X and have become household names through their business success and media profiles. But they also have sharp differences. Musk, 54, is nearly a generation older than Altman, 41. Musk is active in far-right Republican politics, while Altman is a conflicted longtime Democratic donor who last year called himself “politically homeless” and gave $1 million to President Donald Trump’s inauguration. Altman is a booster for San Francisco, advising its mayor and expanding OpenAI’s offices here, while Musk shuns the city and now lives in Texas. Musk is also vastly wealthier, with a $645 billion net worth that makes him the richest person in the world, according to Bloomberg. With SpaceX’s expected IPO later this year, Musk could become the world’s first trillionaire.
The souring of their relationship has at times bordered on the petty and personal. Musk has repeatedly posted on X about “Scam Altman,” while Altman publicly demanded back his $45,000 deposit for a Tesla Roadster, Musk’s long-delayed sports car.
The timing only adds to the trial’s drama: OpenAI is locked in a heated battle with Anthropic and Google for leadership in the AI market, trying to get both consumers and business customers hooked on chatbots and other AI tools, while public anger over AI continues to simmer as evidenced by a recent attack on Altman’s home.
The trial has the potential to radically upend OpenAI if the jury and judge agree with Musk. In a court filing in January, Musk said he planned to ask for $134 billion from OpenAI and Microsoft, which is one of OpenAI’s top backers and a co-defendant in the trial. Musk amended that proposal in a second filing this month, saying instead that any funds disgorged from OpenAI and its executives should go to OpenAI’s charitable arm. He also said he’d ask the judge to order the firing of Altman and OpenAI co-founder Greg Brockman, along with a permanent injunction to preserve OpenAI’s original charter.
OpenAI called those proposed outcomes a “legal ambush” on the eve of trial. Musk says he gave OpenAI $38 million during its early years, or what he says was 60% of the nonprofit’s seed funding.
Unlike in some other trials, the jury in the case is advisory, meaning the judge will consider their verdict but ultimately make the decision herself about liability. She also said in an order this month that she alone would decide the remedy, without the advice of a jury, if the trial gets that far.
The tech industry has been salivating over the upcoming trial, not only because of what it might mean for OpenAI but also because of the juicy gossip it has produced. Among the documents that have been unsealed as part of the case are Brockman’s personal notes in which he mused about wanting to become a billionaire. In a 2016 email that surfaced in the case, Musk wrote to Altman saying OpenAI should work with Microsoft as a cloud-computing provider instead of with Amazon because Musk considered Amazon founder Jeff Bezos to be “a bit of a tool.”
Traders on the prediction market site Polymarket were giving Musk 32% odds of success as of Friday, after weeks of volatile price swings. The judge, due to her proximity to Silicon Valley, already has years of experience dealing with wealthy tech companies and their high-priced legal teams. Last year, she ruled that Apple had violated a court order in an antitrust case and referred the iPhone maker to federal prosecutors for possible criminal prosecution. (Prosecutors declined to comment Friday on the status of the referral.) She has already taken a strict approach to the Musk-Altman case. In an order last year, she warned the parties that they had “over-litigated this case” with excessive or irrelevant arguments. “The Court will not waste precious judicial resources on the parties’ gamesmanship,” Rogers wrote.
For the trial, she has ordered everyone — billionaires included — to enter the courthouse through the regular front door and go through security screenings. “That some of the parties and witnesses may have high profiles does not warrant special privileges,” she wrote in an order last month. Musk requested a jury trial, and the judge said she’ll seat nine advisory jurors with no alternates. They’ll be drawn from San Francisco and several surrounding counties, an area that includes many tech workers as well as critics of the industry and AI. In February, a federal judge in San Francisco overseeing a different trial involving Musk had difficulty finding jurors who could set aside their views about the billionaire and keep an open mind. One potential juror in that case said Musk had “no moral compass” and was excused, while a lawyer for Musk complained to the judge that there were “so many people who hate him so much.”
https://x.com/sama/status/1941151234775511328