Nine jurors in California have begun deliberating in Elon Musk’s lawsuit against OpenAI, its co-founders, and Microsoft, a case that could affect the future structure of one of the world’s largest artificial intelligence companies.
The trial has covered years of conflict inside OpenAI, including Musk’s departure from the organization in 2018, Sam Altman’s brief removal and reinstatement in 2023, and OpenAI’s growing commercial relationship with Microsoft. Jurors, however, are being asked to decide a narrower set of legal questions tied to Musk’s donations to OpenAI and the company’s transition toward a for-profit structure.
If Musk prevails, the outcome could potentially threaten OpenAI’s current corporate structure, though the exact consequences remain unclear. Additional hearings are scheduled next week to determine what remedies or structural changes might follow if the jury rules in favor of the plaintiffs.
Claims The Jury Must Decide
Jurors are evaluating three primary claims brought by Musk.
The first involves alleged breach of charitable trust. Musk argues that OpenAI and co-founders Sam Altman and Greg Brockman violated an agreement tied to his donations by using funds for purposes outside the nonprofit mission he supported.
The second claim concerns unjust enrichment. Musk alleges that his donations ultimately enriched OpenAI executives and investors through the company’s for-profit affiliate rather than supporting charitable objectives.
The third claim focuses on Microsoft. Musk argues that Microsoft aided and abetted the alleged breach of charitable trust by knowingly participating in activities that conflicted with conditions attached to Musk’s donations.
OpenAI and Microsoft deny the allegations.
OpenAI’s Defense Strategy
OpenAI has presented three major defenses during the trial.
The first centers on statutes of limitations, which establish legal deadlines for filing claims. OpenAI argues that if any alleged harm occurred before specific cutoff dates in 2021 or 2022, Musk’s claims are no longer legally valid.
The company also argues that Musk waited too long to bring the lawsuit. Attorneys for OpenAI say Musk’s 2024 filing created an unreasonable delay that weakens his request for damages.
A third defense invokes the legal doctrine of “unclean hands,” arguing that Musk’s own conduct related to OpenAI makes his claims invalid.
OpenAI attorneys repeatedly asked witnesses to identify any explicit restrictions attached to Musk’s donations. According to the company, none of the witnesses, including Musk adviser Jared Birchall, chief of staff Sam Teller, or adviser Shivon Zilis, identified formal conditions governing the use of the funds.
The company argues that all parties involved understood private fundraising would eventually be necessary to support OpenAI’s development goals.
OpenAI also pointed to evidence showing Musk previously explored launching a for-profit OpenAI affiliate under his own control and later proposed merging OpenAI with Tesla.
Dispute Over Microsoft’s Investment
A central issue in the case involves Microsoft’s investments in OpenAI.
Musk’s legal team argues that a $10 billion Microsoft investment announced in 2023 fundamentally changed OpenAI by enriching investors and executives through commercial AI products rather than advancing the nonprofit mission Musk originally supported.
According to the plaintiffs, OpenAI’s for-profit activities became commercially focused while the nonprofit foundation became increasingly inactive and lacked meaningful operational control.
The plaintiffs highlighted the multibillion-dollar equity stakes held by figures such as Greg Brockman, Ilya Sutskever, and Microsoft as evidence that OpenAI evolved into a profit-generating enterprise.
OpenAI disputes those claims.
The company says Musk’s donations had already been fully spent by 2020, years before the disputed Microsoft investment occurred. A forensic accountant hired by OpenAI testified that the funds were exhausted before the key legal dates cited in the case.
OpenAI also argues that equity compensation for researchers was considered necessary to compete for AI talent and advance artificial general intelligence, commonly referred to as AGI.
According to the company, the for-profit entity continued supporting the nonprofit mission through AI development and safety research.
Sam Altman testified that offering ChatGPT for free aligned with OpenAI’s mission of distributing the benefits of AI broadly.
OpenAI additionally stated that the nonprofit board still maintains ultimate control over the for-profit entity and introduced new governance measures after Altman’s temporary removal in 2023, an episode internally referred to as “the blip.”
Microsoft’s Role During “The Blip”
Musk’s attorneys also focused heavily on Microsoft’s involvement during Altman’s firing and reinstatement in late 2023.
Microsoft CEO Satya Nadella was personally involved in discussions surrounding Altman’s return and the formation of a new OpenAI board structure, according to evidence presented during the trial.
The plaintiffs argue Microsoft’s commercial interests increasingly influenced OpenAI’s direction away from its original nonprofit mission.
Particular attention was placed on contractual provisions granting Microsoft veto rights over major OpenAI corporate decisions.
Microsoft witnesses testified that company executives were unaware of any specific conditions tied to Musk’s donations despite extensive due diligence during investment negotiations.
The company also said it never exercised veto authority over OpenAI decisions.
Microsoft argued that its investments and computing infrastructure played a major role in enabling OpenAI’s AI breakthroughs.
OpenAI Says Musk Waited Too Long To Sue
Musk testified that his concerns about OpenAI developed gradually over time before solidifying in late 2022 after learning about Microsoft’s planned $10 billion investment.
He ultimately filed the lawsuit in 2024.
OpenAI attorneys argued that Musk had access to information about OpenAI’s structure and fundraising plans years earlier.
The defense pointed to a 2018 fundraising term sheet reviewed by Musk and his advisers, public blog posts, social media statements, and earlier tweets where Musk criticized OpenAI before filing suit.
The company also noted that Shivon Zilis voted to approve some of the transactions in question while serving on OpenAI’s board.
According to OpenAI, Musk’s formal involvement with the organization ended in 2018, while his final donations occurred in 2020.
OpenAI attorneys argued that Musk filed the lawsuit only after ChatGPT’s success transformed the AI industry and validated OpenAI’s approach.
“There is evidence that Musk was planning his own competing AI efforts while he was still the chair of OpenAI,” the defense argued during trial proceedings.
The company also accused Musk of recruiting OpenAI employees for Tesla’s AI efforts and withholding donations in 2017 during disagreements over control of a planned for-profit structure.
“Mr. Musk abandoned OpenAI for dead in 2018,” OpenAI lead attorney Bill Savitt told the jury.
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