Sam Altman Testifies in Elon Musk Lawsuit Over OpenAI's For-Profit Shift

Elon Musk is seeking to force OpenAI back toward its original nonprofit structure in a civil trial that entered its third week on Monday with testimony from former chief scientist Ilya Sutskever and current board chair Bret Taylor. Musk accuses CEO Sam Altman and president Greg Brockman of shifting the San Francisco company to a profit-driven model behind his back after he helped found it as an altruistic steward of artificial intelligence.

Sutskever testified that he wrote a 2023 memo to the board characterizing Altman as pitting executives against one another and exhibiting a consistent pattern of lying that eroded trust. He described an environment not conducive to the company's goals of safely building artificial general intelligence and said the board's decision to remove Altman stemmed from a pattern of behavior related to honesty, candor and resistance to oversight.

Sutskever later supported Altman's reinstatement, telling the court he feared the company he had worked hard to build would be destroyed without that intervention. He called his role in the ouster attempt a Hail Mary.

Toner said the process began when Sutskever confided concerns, leading to a consensus described internally as a pattern of behavior rather than a single incident. Bret Taylor, OpenAI's current board chair, offered a contrasting view. He testified that Altman has been forthright with board members and has done a great job as CEO.

“I think Sam has done a great job as CEO. He’s been forthright with me and the other board members.”

Microsoft CEO Satya Nadella testified Monday that OpenAI's transition to a for-profit entity was necessary to pursue its mission and deliver returns on the substantial investment his company has made. Nadella also described his intervention to help reinstate Altman after the 2023 firing.

The lawsuit alleges Altman and Brockman double-crossed Musk by abandoning the founding commitment to nonprofit stewardship. Musk has dropped his personal damages claim and instead seeks funds to support OpenAI's charitable arm. In a text shown at trial, Musk warned Brockman and Altman they would become the most hated men in America if the case proceeded.

OpenAI has countered that Musk supported a for-profit structure early on and that his suit amounts to sour grapes after he left the company. Evidence presented includes emails from 2017 showing discussions, involving Musk, about moving away from a pure nonprofit model to raise capital.

Shivon Zilis, a former OpenAI board member and mother of four of Musk's children, testified about early talks on corporate structure. She described how Musk offered to donate sperm in 2020 after noticing she wanted to become a mother, leading to their unconventional arrangement that remained confidential at first.

Republican lawmakers and six state attorneys general are separately scrutinizing Altman's personal investments for potential conflicts with his role at OpenAI. The House Oversight Committee sent a letter Friday seeking details after reports that Altman pushed OpenAI to invest $500 million in Helion, a nuclear fusion company in which he had invested at least $375 million.

Attorneys general from Florida, Montana, Nebraska, Iowa, West Virginia and Louisiana wrote to the Securities and Exchange Commission citing a history of self-dealing. OpenAI board chair Bret Taylor testified that Altman has been proactive and transparent about his holdings.

Altman, whose net worth is estimated at $3.5 billion from investments outside OpenAI, is expected to testify Tuesday and Wednesday. The trial has drawn scrutiny to his leadership at a time when OpenAI, valued at $852 billion, competes with Musk's xAI and Anthropic.

All three companies are preparing initial public offerings expected to rank among the largest ever. Witnesses have included discussions of Altman's text during his 2023 ouster in which he asked an executive if events were moving directionally good or bad and received the reply that it was very bad.

Legal experts following the case have expressed doubt that Altman will remain CEO long term regardless of the verdict, citing damage from the public airing of internal disputes. The proceedings have also featured testimony about Zilis's dual roles bridging Musk's companies and OpenAI before she left the board in March 2023 as Musk launched his competing AI venture.