Elon Musk Testifies in Lawsuit Against OpenAI Cofounders Over Company Restructuring

A jury in Oakland, California, is hearing testimony in a lawsuit filed by Elon Musk against OpenAI cofounders Sam Altman and Greg Brockman. The case centers on whether communications between the parties established a charitable trust during OpenAI's formation and if the subsequent restructuring violated that trust.

The restructuring shifted control from the non-profit board to include a for-profit entity. Musk alleges that Altman and Brockman unjustly enriched themselves as OpenAI transitioned from a research lab to a commercial operation. The jury's verdict will be advisory to the judge.

OpenAI has countersued Musk, alleging harassment.

During the trial, Musk testified that his company xAI trained its Grok model by distilling OpenAI's GPT models, a process that involves training on outputs from another model. This action violates OpenAI's terms of service. Musk stated that such practices are common.

Greg Brockman testified that he did not fulfill an initial pledge to donate $100,000 to OpenAI's non-profit but now holds a $30 billion stake in the for-profit company. Musk's lawyers presented Brockman's 2017 journal entries, in which he wrote about converting the non-profit to a B corp without Musk and noted that they were not honest with Musk about pursuing for-profit activities without him.

Brockman also acknowledged investing in AI chip startup Cerebras while OpenAI discussed a potential acquisition, without disclosing this to Musk. Altman was also an investor in Cerebras. The acquisition did not proceed, but OpenAI later formed a partnership with Cerebras.

Before the trial, Musk emailed Brockman proposing a settlement. In the email, Musk stated that by the end of the week, Brockman and Altman would be the most hated men in America if they did not settle. OpenAI's lawyers made the email public and attempted to admit it as evidence, but the effort was unsuccessful.

Since Musk filed the lawsuit, OpenAI has raised funds, including $122 billion in March at a $852 billion valuation. An initial public offering remains under consideration.

Is scheduled to hear arguments in two weeks on Anthropic's challenge to a supply chain risk designation by the Trump administration. S. military. The Trump administration has shifted its approach to AI regulation, moving to require government review of AI models before public release.

This change follows a prior laissez-faire stance. OpenAI and Anthropic have announced joint ventures targeting private equity-backed companies. Additionally, advancements have been reported in foundation models for robotics.