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Microsoft CEO Satya Nadella Testifies in Elon Musk Lawsuit Over OpenAI For-Profit Shift
Microsoft's CEO testified in federal court that OpenAI's transition to a for-profit structure was necessary to pursue its mission and that the company has delivered strong returns on its investment. The testimony came during the third week of Elon Musk's trial accusing OpenAI of breaching its founding agreement.
May 11, 8:25 PM·2m read2 sources
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, as part of Elon Musk's lawsuit against the artificial intelligence company. The executive stated that without a for-profit entity it would be hard for OpenAI to pursue its mission. He also discussed the company's substantial returns on its investment in OpenAI.
Court documents from 2023 showed the company anticipated a $92 billion return on its initial $13 billion investment. OpenAI's valuation reached $852 billion in March, placing the stake at around $135 billion. Musk's attorney asked whether the investment had worked out very well, and the executive responded affirmatively.
The testimony touched on the November 2023 ouster of OpenAI's CEO, who was reinstated days later. The executive said he was concerned by the initial firing and wanted to retain the team that created the technology amid competition. He added that he promised support for possible new leadership but sought to prevent the CEO from joining a rival.
The Microsoft-OpenAI partnership has included a 27 percent ownership stake for the software company following OpenAI's restructuring last year. The executive said he was very proud that Microsoft invested when no one else was willing to bet on the startup.
Earlier emails shown in court revealed skepticism among several executives as far back as 2018 after visits to OpenAI yielded no immediate signs of breakthroughs toward artificial general intelligence. Musk's suit accuses OpenAI and Microsoft of aiding a breach of the company's original charitable trust by prioritizing commercial gain over developing AI for humanity's benefit.
He is seeking up to $180 billion in damages and a court order to unwind the for-profit status. OpenAI co-founder Ilya Sutskever testified that he never promised Musk the company would remain a nonprofit. Sutskever stated the mission of OpenAI is larger than a nonprofit or for-profit structure.
