Musk v. Altman week 1: Elon Musk says he was duped, warns AI could kill us all, and admits that xAI distills OpenAI’s models

In the first week of the landmark trial between Elon Musk and OpenAI, Musk took the stand in a crisp black suit and tie and argued that OpenAI CEO Sam Altman and president Greg Brockman had deceived him into bankrolling the company. Along the way, he warned that AI could destroy us all and sat through revelations that he had poached OpenAI employees for his own companies. He even confessed, to some audible gasps in the courtroom, that his own AI company, xAI, which makes the chatbot Grok, uses OpenAI’s models to train its own. 

The federal courthouse in Oakland, California, was packed with armies of lawyers carrying boxes of exhibits, journalists typing away at their laptops, and a handful of concerned OpenAI employees. Outside, protesters lined the streets, carrying signs urging people to quit ChatGPT, boycott Tesla, or both. Musk looked calm and comfortable, slipping in the occasional quip in his distinct South African accent. But he also was full of remorse. 

“I was a fool who provided them free funding to create a startup,” Musk told the jury. He said when he cofounded OpenAI in 2015 with Altman and Brockman, he was donating to a nonprofit developing AI for the benefit of humanity, not to make the executives rich. “I gave them $38 million of essentially free funding, which they then used to create what would become an $800 billion company,” he said.

Musk is asking the court to remove Altman and Brockman from their roles and to unwind the restructuring that allowed OpenAI to operate a for-profit subsidiary. The outcome of the trial could upend OpenAI’s race toward an IPO at a valuation approaching $1 trillion. Meanwhile, xAI is expected to go public as a part of Musk’s rocket company SpaceX as early as June, at a target valuation of $1.75 trillion.

This week’s testimony revolved around a central question of the trial: why Musk is suing OpenAI. Musk argued he was trying to save OpenAI’s mission to develop AI safely by restoring the company to its original nonprofit structure. OpenAI’s lawyer, William Savitt, who once represented Musk and his electric-car company Tesla, countered that Musk was “never committed to OpenAI being a nonprofit” and instead was suing to undermine his competitor. 

Who is the steward of AI safety?

During his direct examination early in the week, Musk painted himself as a longtime advocate of AI safety. He said he cofounded OpenAI to create a “counterbalance to Google,” which was leading the AI race at the time. He said that when he asked Google cofounder Larry Page what happens if AI tries to wipe out humanity, Page told him, “That will be fine as long as artificial intelligence survives.” 

“The worst-case scenario is a Terminator situation where AI kills us all,” Musk later told the jury.

Savitt stood at the lectern and argued that Musk was not a “paladin of safety and regulation.” As he cross-examined Musk in his sharp, surgical cadence, Savitt pointed out that xAI sued the state of Colorado in April over an AI law designed to prevent algorithmic discrimination. 

Musk’s lawyer, Steven Molo, sprang to his feet to object. He asked the judge if he, too, could weigh in on ChatGPT’s safety record. 

The lawyers then entered a heated debate about who was the true guardian of AI safety. 

The sparring continued the next morning. “We all could die as a result of artificial intelligence!” said Molo, suggesting that OpenAI could not be trusted to build AI safely.

“Despite these risks, your client is creating a company that’s in the exact space,” Judge Yvonne Gonzalez Rogers said sternly, referring to xAI. “I suspect there’s plenty of people who don’t want to put the future of humanity in Mr. Musk’s hands.”

When the lawyers began talking over each other, the judge snapped. “This is not a trial on whether or not artificial intelligence has damaged humanity,” she said. 

When did Musk think he was being duped?

As Savitt continued to cross-examine Musk, he pressed on the idea that Musk had never been committed to keeping OpenAI a nonprofit. He also claimed that Musk waited too long to sue OpenAI, filing after the statute of limitations ran out. 

Musk explained why he sued in 2024 rather than earlier, describing “three phases” in his views of OpenAI. In phase one, he was “enthusiastically supportive” of the company.” In phase two, “I started to lose confidence that they were telling me the truth,” he said. In phase three, “I’m sure they’re looting the nonprofit.” 

In 2017, Musk and other OpenAI cofounders discussed creating a for-profit subsidiary to raise enough capital to build artificial general intelligence—powerful AI that can compete with humans on most cognitive tasks. Musk wanted a majority interest in the subsidiary and the right to choose a majority of the board members. He also pitched having Tesla acquire OpenAI. (He left OpenAI in 2018.)

“I was not opposed to there being a small for-profit that provides funding to the nonprofit,” he told the jury, “as long as the tail didn’t wag the dog.” 

But it was only in late 2022, Musk testified, that he “lost trust in Altman” and his commitment to keeping the company a nonprofit. The key moment came, he said, when he learned that Microsoft would invest $10 billion in OpenAI. 

“I texted Sam Altman, ‘What the hell is going on? This is a bait and switch,’” he told the jury. Microsoft would give $10 billion only if it expected “a very big financial return,” he said.

Is Musk just trying to kill competition?

But Savitt argued that Musk was really suing to undermine OpenAI as a competitor to his empire of tech companies. While he was on the board of OpenAI, Musk was also running Tesla and his brain-implant company, Neuralink. He founded xAI in 2023.

Savitt pulled up an email that Musk had sent to a Tesla vice president in 2017 after hiring Andrej Karpathy, a founding member of OpenAI, to work at Tesla.“The OpenAI guys are gonna want to kill me. But it had to be done,” he wrote.

When asked about it, Musk was flustered. He claimed Karpathy had already decided to leave OpenAI when he recruited him to work at Tesla. “I believe it’s a free world,” he said.

Savitt pulled up another email that Musk sent to a cofounder at Neuralink in 2017. He wrote that they could “hire independently or directly from OpenAI.” When pressed about it, he sounded frazzled. “It’s a free country,” he said. “I can’t restrict their ability to hire people from other companies.” 

Savitt also pointed out that Tesla, SpaceX, Neuralink, and X were socially beneficial for-profit companies, like OpenAI. He stressed that xAI was also a closed-source, for-profit company.

But Musk claimed that xAI was not a real competitor to OpenAI. “We’re not currently tracking to reach AGI first,” he told the jury. 

In fact, Musk admitted that xAI uses OpenAI’s technology. In response to Savitt’s relentless questioning, he said xAI “partly” distills OpenAI’s models. Some people in the courtroom gasped. 

Distillation is a technique where a smaller AI model is trained to mimic the behavior of larger, more capable models, so it can run faster and more cheaply while performing nearly as well. But OpenAI and other AI companies have pushed back against the practice. In February, OpenAI accused the Chinese AI company DeepSeek of distilling its AI models. In August 2025, Wired reported that Anthropic had blocked OpenAI’s access to Claude for violating the company’s terms of service, which prohibit, among other things, reverse-engineering its services and building competing products. 

“It is standard practice to use other AIs to validate your AI,” argued Musk.

Next week, Stuart Russell, a computer scientist at UC Berkeley, will testify about AI safety. Brockman, who has been taking notes during Musk’s testimony, will also testify.

This story is part of MIT Technology Review’s ongoing coverage of the Musk v. Altman trial. Follow @techreview or @michelletomkim on X for up-to-the-minute reporting.