Trial Underway in Oakland Federal Court
The high-profile legal battle between Elon Musk and OpenAI CEO Sam Altman opened in federal court in Oakland. Lawyers from both parties offered sharply contrasting accounts of OpenAI's founding years. Musk described the lab's transition to a for-profit entity as one of history's largest thefts, according to the New York Times. On the witness stand, Musk stated, "This lawsuit is very simple: It is not OK to steal a charity." He warned that without intervention against Altman, it would encourage plundering every charity across America.
OpenAI's top lawyer, William Savitt, presented a counter-narrative during his opening remarks. Savitt portrayed Musk as the true capitalist aggressor who sought total dominance over OpenAI and quit when founders resisted. "We are here because Musk didn't get his way at OpenAI," Savitt declared. He added that OpenAI's team succeeded independently after Musk departed.
A nine-person jury listens under Federal Judge Yvonne Gonzalez Rogers. Witnesses will include past board members, staff, and technology leaders. The case, set to last about one month, involves Musk's demand for $150 billion in damages plus a court mandate to undo OpenAI's restructuring, completed in October.
Disputes Over OpenAI's Early Structure
Musk traced OpenAI's creation to a discussion with Google co-founder Larry Page. Page labeled Musk a "speciesist" for prioritizing humans over potential digital beings. Musk said he aimed to build a counterbalance to Google. He testified that he invented the name, gathered core talent, and supplied initial funds.
Savitt countered using early emails. In 2015, Musk suggested a standard C corporation alongside a nonprofit might work best. In 2016, he noted it could have been an error to form OpenAI as a nonprofit, citing DeepMind's advances. By 2017, with massive computing needs emerging, Musk pushed to convert OpenAI fully to for-profit and seize complete control, Savitt claimed. Other founders rejected handing artificial intelligence control to one individual.
Musk acknowledged considering a for-profit arm but insisted profits stay limited and return to the nonprofit. One idea divided equity evenly among Musk, Altman, Greg Brockman, and chief scientist Ilya Sutskever. Musk deemed that proposal unfair, given his sole funding role then. He left because founders demanded excessive shares, he explained.
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Microsoft's Involvement Draws Scrutiny
Musk's counsel, Steven Molo, blamed Microsoft as a partner in subverting OpenAI's mission. Microsoft invested $13 billion starting in 2019, Molo told jurors, while Altman and Brockman undermined the charitable goals. Microsoft lawyer Russell Cohen responded that unlike Musk, Microsoft never sought OpenAI control.
Savitt framed the suit as Musk's effort to hinder a competitor to xAI. Musk ignored OpenAI after his 2018 exit, even during Microsoft's initial 2019 billion-dollar infusion. Only after ChatGPT's 2022 success did Musk react with resentment, Savitt argued.
The nonprofit, now the OpenAI Foundation, retains company control with a 26 percent stake. Microsoft owns 27 percent. The jury issues an advisory verdict; Judge Gonzalez Rogers decides the outcome and remedies.
Judge Issues Social Media Warning, Security Tightens
Courthouse security increased after a man, said to oppose AI, faced arrest for supposedly firebombing Altman's San Francisco residence. Musk and Altman entered via a secure door as lawyers and journalists queued outside.
OpenAI began in 2015 as a nonprofit counter to companies like Google in AI development. Musk co-founded it with Altman, Brockman, Sutskever, and others but exited in 2018 amid disputes. Microsoft became a key backer, fueling growth toward tools like ChatGPT. Musk launched xAI in 2023 to pursue safe AI. This trial revisits those tensions amid OpenAI's capped-profit model shift.
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