The Real Stakes Behind Elon Musk’s Showdown with Sam Altman
With the trial underway for Elon Musk’s lawsuit against OpenAI CEO Sam Altman and president Greg Brockman, judges and jurors are weighing a central question: Can a company that began as a nonprofit later evolve into a for-profit enterprise without violating its original mission? Musk, an OpenAI co-founder and the owner of its rival, xAI, argues the answer is no. His sweeping demands reflect that view: the world’s richest person is seeking financial damages, a return to OpenAI’s original structure and a legal determination on whether its models are approaching artificial general intelligence (A.G.I.).
Musk said his concern for OpenAI reached a breaking point when OpenAI received a $10 billion investment from Microsoft in 2022. “By late 2022, I’d lost trust in Altman, and I was concerned that they were really trying to steal the charity,” he said on the stand yesterday (April 29). “It turned out to be true.”
Musk’s own ventures, including xAI, SpaceX (which acquired xAI in February for $250 billion) and Tesla, are all for-profit, yet Musk argued in court that his companies are all “socially beneficial.” xAI, founded in 2023, has already secured a $200 million contract with the U.S. Department of Defense for its Grok model. Like OpenAI, it is pursuing AGI.
The outcome of the case now rests with Judge Yvonne Gonzalez Rogers and a nine-person jury, who have been instructed to disregard the public personas and fortunes of the two billionaires. Musk is worth over $775 billion, and Altman is worth roughly $3.4 billion. SpaceX and OpenAI are both expected to go public this year, which could further inflate their net worth.
Musk v. Altman: the gist
OpenAI was founded in 2015 as a nonprofit, with Musk serving as co-chair and early investor. Court filings show he invested more than $44 million over five years, though his testimony has varied. He said in court he “donated” $38 million through 2019, despite previously claiming $100 million in a deposition.
The company shifted to a “capped-profit” model in 2019 and became a public benefit corporation (PBC) in October 2025. Its nonprofit arm, the OpenAI Foundation, now holds a 26 percent minority stake in OpenAI Group PBC.
Musk wants OpenAI to revert to its original nonprofit structure. Altman and OpenAI argue the lawsuit is driven by rivalry and Musk’s failed 2018 attempt to gain control of the company. According to OpenAI, Musk had previously pushed to convert the organization into a for-profit entity and even proposed merging it with Tesla.
In court, Musk has been described as “combative,” particularly during exchanges with OpenAI’s lead counsel, William Savitt. At one point, he said Savitt’s questions were “designed to trick me.”
Musk will conclude his testimony today. His family office manager, Jared Birchall, will testify after him. Additional witnesses may include Brockman and UC Berkeley computer science professor Stuart Russell. Altman is expected to take the stand later. The trial is expected to run through late May.
Musk’s demands
Musk’s claims span financial, structural and technical issues:
- More than $150 billion in damages from OpenAI and Microsoft, based on his contributions, alleged “ill-gotten gains” and punitive damages tied to claims of deception.
- Structural changes requiring OpenAI to return to its founding nonprofit model, which he argues was intended to develop open-source A.I. for the public good. He is also seeking to halt OpenAI’s for-profit operations until those changes are made. Much of the alleged “founding agreement” is based on informal communications, which are being tested in court.
- A legal determination on whether OpenAI’s models, including GPT-4, are approaching AGI. This question intersects with OpenAI’s partnership with Microsoft, whose commercial agreements exclude AGI. Microsoft and OpenAI ended their exclusive partnership at the start of the trial, weakening Musk’s related claim that those agreements should be voided.
Despite the scope of Musk’s demands, experts say a forced return to nonprofit status is unlikely.
“OpenAI has signed contracts with Microsoft, Nvidia and hundreds of vendors,” said Noah Kenney, head of tech advisory firm Digital 520. “It has employees holding equity and billions in committed investor capital. You can’t simply unwind a public benefit corporation that two state attorneys general already approved.”
Even if Musk prevails, Kenney said the most likely outcome is financial damages awarded to the nonprofit, not a restructuring. Still, the case could have lasting implications. Future A.I. startups that begin as nonprofits may face greater scrutiny over governance and mission alignment.
“The trial doesn’t pause the technology,” Kenney said. “It changes how the companies behind it are structured. That’s the real ripple effect.”