Elon Musk Sues Sam Altman and OpenAI in California Court

A federal trial pitting Elon Musk against Sam Altman and OpenAI started on Monday in Oakland, California, focusing on allegations that the AI company abandoned its nonprofit mission for profit-driven pursuits. Musk, a co-founder of OpenAI, sued the company and its CEO Altman in 2024, claiming a breach of an original agreement to keep OpenAI as a nonprofit dedicated to benefiting humanity.

The suit points to OpenAI's decision to make its ChatGPT-4 model available to Microsoft under an exclusive licensing agreement as a key violation.

selection began with nine jurors and no alternates selected for the case. The trial is divided into two phases: an initial liability phase to determine if any illegal acts occurred, followed by a remedies phase to assess potential damages. Each side, including Musk and the OpenAI defendants, has been allotted 22 hours to present their case in the liability phase.

Microsoft, named as a defendant, receives five hours. " — The presiding judge, as reported by The Guardian.

alleges unjust enrichment and breach of charitable trust against OpenAI. He claims the company transformed into a closed-source subsidiary of Microsoft, the world's largest technology company by market value. In the lawsuit, Musk cites written messages from Altman and OpenAI President Greg Brockman reaffirming the nonprofit structure.

For instance, Altman wrote to Musk in 2017 expressing enthusiasm for the nonprofit approach. OpenAI has called the charges baseless, and Microsoft has denied any wrongdoing. The companies have since renegotiated their exclusive licensing agreement, allowing OpenAI to partner with other firms.

The case features a list of potential witnesses including Altman, Musk, and Microsoft CEO Satya Nadella. Court filings have already revealed private communications among OpenAI founders and other figures. Musk seeks $150 billion in damages and a court order to restore OpenAI's nonprofit status and mission of aiding humanity.

He also alleges breach of contract, breach of fiduciary duty, and unfair business practices.

Stakes OpenAI launched in 2015 with Musk's financial support as a nonprofit. It later shifted to a for-profit model, achieving a valuation of $852 billion after a funding round in March. Microsoft's market capitalization stands at about $3.1 trillion. Musk, listed as the world's richest person with $839 billion in wealth, launched a rival AI company in 2023.

The feud has played out publicly on social media and now moves to the courtroom, potentially exposing more details about Silicon Valley dynamics.

The outcome could determine OpenAI's future governance and its relationships with major tech partners. Hundreds of court filings have surfaced communications that highlight tensions among AI industry leaders. During jury selection, some potential jurors expressed negative views of Musk, which could influence the proceedings.

The trial is expected to last several weeks, with opening arguments following jury selection.