Musk and Altman Face Trial Over OpenAI's Path
Elon Musk and OpenAI CEO Sam Altman will appear in court this week in Northern California. Their long-running dispute heads to trial. The outcome could reshape OpenAI's structure ahead of its expected initial public offering. A judge might decide if the company can continue as a for-profit business. The ruling could also remove current leaders, including Altman.
Musk charges that Altman and OpenAI president Greg Brockman misled him. They promised to keep OpenAI as a nonprofit focused on AI for humanity's benefit. Instead, the company created a for-profit subsidiary. Musk helped start OpenAI in 2015 with Altman and others. He departed in 2018 following disputes over control.
Musk demands up to $134 billion in damages from OpenAI and Microsoft, a major investor. He wants Altman and Brockman removed from their positions. Musk seeks to return OpenAI to nonprofit status. He requests that any damages go to OpenAI's nonprofit arm, not to himself.
Nine jurors will offer a non-binding advisory verdict to assist the judge on Musk's claims against Altman. Musk, Altman, and Brockman plan to testify. Former OpenAI chief scientist Ilya Sutskever, ex-CTO Mira Murati, and Microsoft CEO Satya Nadella should also appear. Expect revelations from old texts, diary notes, and internal plans from OpenAI's early years.
This trial offers a rare glimpse into secretive AI firms building powerful systems.
Core of the Conflict
OpenAI launched as a nonprofit with Musk's $38 million contribution. It aimed to build open-source AI for public good, free from profit pressures. Later, leaders argued that competition made sharing methods risky. They said nonprofit limits blocked needed funding for AI development.
The court noted that in 2017, Altman and Brockman pushed for a for-profit unit. Musk suggested combining OpenAI with Tesla. When Musk cut funding threats, Altman and Brockman reaffirmed nonprofit commitment. Musk claims they hid for-profit plans. OpenAI counters that Musk supported a for-profit and eyed its CEO role.
Even if Musk shows deception, his right to sue remains in question. Legal experts question the judge's decision to proceed. "The idea that Elon Musk can sue because he was a donor or used to be on the board is pretty puzzling," says Jill Horwitz, a law professor at Northwestern University who studies nonprofit law. "Typically, it's up to the attorneys general to bring such a claim to enforce the charitable purposes. And that's already happened."
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In October 2025, attorneys general from California and Delaware approved OpenAI's structure changes with conditions. A nonprofit safety committee must review for-profit safety choices. Musk, AI safety supporters, and groups opposed the shift.
California's attorney general skipped Musk's suit, stating it does not aid public interest.
Questions linger on enforcement. "Elon Musk should have to show … what the deficiencies are in what's been agreed to by OpenAI with the attorneys general," says Rose Chan Loui, director of UCLA School of Law's philanthropy and nonprofit program. Terms exist, but success relies on oversight and access to OpenAI's operations.
Experts note mismatch in legal approach. Musk claims breach of charitable trust via closed-source for-profit. Courts apply trust law. "But OpenAI is not a trust. OpenAI is a corporation. And so really they should be looking at … the law of charitable nonprofit organizations," says Chan Loui.
Stakes in the Trial
The verdict could disrupt AI competition. Musk's requests might halt OpenAI's year-end public listing. Valued above $850 billion, OpenAI lists the suit as a business risk.
Musk's xAI, creator of Grok chatbot, plans public debut via SpaceX in June. xAI and SpaceX together value at $1.25 trillion. A Musk win could boost xAI ahead.
The case highlights Musk's rift with his former venture. An OpenAI spokesperson pointed to an X post: "This lawsuit has always been a baseless and jealous bid to derail a competitor." Musk posted on X: "Scam Altman lies as easily as he breathes."
OpenAI began in 2015 to counter profit-driven AI risks with open research. Its ChatGPT success drew billions in funding, prompting the for-profit capped arm in 2019. Microsoft invested heavily, gaining board seats. Musk launched xAI in 2023 to rival, emphasizing truth-seeking AI. Tesla integrates AI for self-driving. SpaceX advances rockets with AI aid.