Elon Musk Takes Aim at OpenAI as Trial Begins: ‘It’s Not OK to Steal a Charity’

In a federal courtroom in Oakland on Tuesday, attorneys for tech elites Sam Altman and Elon Musk set the stage for a landmark case to determine whether OpenAI, one of the most powerful artificial intelligence companies in the world, was founded on a lie.

At issue is whether the company’s stated mission — to lead AI development to benefit the common good — was authentic or a deceptive pitch designed to attract talent and investment. Musk alleges that co-founders Altman and Greg Brockman, who remains Altman’s second-in-command, participated in a “long con” to enrich themselves at his expense, after the three co-founded OpenAI as a nonprofit in 2015.

“They’re going to make this lawsuit very complicated, but it’s very simple,” Musk said of OpenAI on the stand on Tuesday afternoon. “It’s not OK to steal a charity.”

He departed the company after a falling out and sued the company in 2024, alleging that OpenAI had breached charitable trust by restructuring as a for-profit company, now valued at more than $800 billion.

But Altman’s attorneys called the Tesla CEO’s behavior “a tale of two Musks,” shifting from pushing for OpenAI to become a for-profit company under his control, to caring about its nonprofit status only after launching competitor xAI in 2023. They argue OpenAI’s decision to adopt a for-profit structure was integral to its survival.

“We’re here because Mr. Musk didn’t get his way,” William Savitt, Altman’s lead attorney, said Tuesday. “And because he’s a competitor, he’ll do anything he can to attack OpenAI.”

Steven Molo, Musk’s counsel, told the jury that when Musk, Altman and Brockman set out to found an AI nonprofit, their goals were to develop the technology safely and for the benefit of humanity.

“It wasn’t a technology to get rich,” he said.

After operating as a strict nonprofit for years, OpenAI added a for-profit arm in 2019, which executives said was necessary to obtain the funding needed to develop artificial general intelligence — a more advanced AI technology that surpasses human intelligence, according to court filings.

In early conversations about how the for-profit entity would work, Molo said, the structure was likened to a museum gift shop whose revenue funds the institution’s galleries and operations. Brockman and Altman reassured Musk that they were still committed to the nonprofit structure, he said.

But behind the scenes, Molo alleges that the other co-founders had more lucrative desires.

In court filings, he cited a journal in which Brockman wrote that “it would be nice to be making the billions … we’ve been thinking that maybe we should just flip to a for-profit. making the money for us sounds great and all.”

Brockman also wrote that he and another top OpenAI executive, Ilya Sutskever, “cannot say that we are committed to the non-profit. don’t wanna say that we’re committed. If three months later we’re doing B-Corp [a certification for for-profit corporations with social and environmental missions], then it was a lie.”

Years later, after Musk had departed OpenAI, the company was “no longer operating for the good of humanity,” Molo said.

“The museum store sold the Picassos,” he said.

Musk’s lawsuit claims OpenAI breached charitable trust and alleges unjust enrichment, which means that one party unfairly benefits at the expense of another. He also accuses Microsoft, which is the company’s largest financial backer and until this week held the exclusive rights to license and sell its technology, of aiding and abetting OpenAI’s breach of charitable trust.

OpenAI’s defense, meanwhile, alleges that Musk’s suit is less motivated by a desire to do good than it is by vengeance for his former colleagues, whose company is now eyeing an initial public offering valued at up to $1 trillion.

“Musk sat on his claims for years,” Savitt said. “He knew everything that was happening when it was happening. My clients had the nerve to go out and succeed without him.”

He also pointed out that Musk launched xAI a year before bringing the lawsuit, which would make OpenAI his competitor.

Savitt pointed to moments early in OpenAI’s development, when Musk suggested that it would be “probably better” for the company to operate as a “standard C corp[oration] with a parallel nonprofit.” He initially promised to cover the balance of the funding it needed, but reneged when he didn’t get to control the company, Savitt told the jury.

Musk was in the middle of the conversations about pivoting from a nonprofit, Savitt said. As early as the summer of 2017, he insisted on holding a majority equity stake in any for-profit entity, as well as controlling its board of directors and serving as CEO, according to OpenAI’s court filings.

In the fall of that year, after Brockman and Sutskever emailed Musk with concerns about the for-profit structure he proposed, the discussions collapsed, OpenAI alleges. After that, Musk stopped making significant quarterly funding contributions, and he left the company less than six months later.

Around that time, Brockman and Altman moved to pursue a for-profit arm — a decision their attorneys say they told Musk about prior to his departure from the board.

Savitt said in court that Musk had given the company less than 4% of the funding he’d promised. While OpenAI had gotten contributions from other donors, he said, those “kept the lights on, but it wasn’t nearly enough to stay on the cutting edge.”

“They needed to get the money from somewhere, or else the project collapsed,” he said, alleging that donors weren’t willing to make the billion-dollar contributions that OpenAI needed without an expectation of return.

Since OpenAI established its first for-profit subsidiary, which capped investor returns at 100 times their investment, its business has exploded. It’s now a public benefit corporation, required to consider its mission statement but not necessarily to prioritize it.

Over the years, its mission statement has been changed several times. In 2023, according to the nonprofit parent organization’s IRS disclosure form, it sought to build AI that “safely benefits humanity, unconstrained by a need to generate financial return.” But last year, that same form included a shorter mission statement — one that removed the word “safely” and any mention of finances, Tufts University business professor Alnoor Ebrahim wrote in The Conversation, an academic news outlet.

Former OpenAI employees have left and started a competitor, Anthropic, citing concerns over safety and the company’s direction. In 2023, OpenAI executives and board members, including Sutskever, staged a coup to briefly oust Altman as CEO. They said there’d been a breakdown in trust between him and the board, and that Altman engaged in a pattern of deception and wasn’t “consistently candid in his communications.”

Whether Altman’s and OpenAI’s pitch to develop their technology for the benefit of the world is an example of that deception is part of what jurors will aim to root out in the current trial.

“I didn’t want to pave the road to hell with good intentions,” Musk said on the stand on Tuesday afternoon. “If you have somebody who’s not trustworthy in charge of AI, I think that’s very dangerous for the whole world.”