Musk, Altman Head to Trial Over OpenAI’s Nonprofit-to-For-Profit Shift

Elon Musk and OpenAI CEO Sam Altman are heading to trial this week in Northern California in a case that could reshape the future of one of the world’s most valuable artificial intelligence companies, according to MIT Tech Review AI.

Musk is suing OpenAI, alleging that Altman and OpenAI president Greg Brockman deceived him into funding the company in its early days by promising to maintain it as a nonprofit dedicated to developing AI that benefits humanity. Instead, Musk claims, the pair later restructured the company to operate a for-profit subsidiary without his knowledge.

The stakes are enormous. Musk is seeking as much as $134 billion in damages from OpenAI and Microsoft, one of OpenAI’s largest financial backers. He is also asking the court to remove Altman and Brockman from their leadership roles and to restore OpenAI as a nonprofit organization. Musk has asked the court to award any damages to OpenAI’s nonprofit arm rather than to him personally, MIT Tech Review AI reports.

Nine jurors will deliver an advisory verdict — a non-binding recommendation — to guide the judge in deciding Musk’s claims against Altman. Both Musk and Altman will take the stand, along with Brockman. Former OpenAI chief scientist Ilya Sutskever, former OpenAI CTO Mira Murati, and Microsoft CEO Satya Nadella are also expected to testify.

The case traces back to OpenAI’s founding in 2015, when Musk cofounded the company with Altman and others, backed by a $38 million donation from Musk. The organization originally vowed to create open-source technology for the public’s benefit. Musk departed in 2018 after a power struggle.

According to court findings cited by MIT Tech Review AI, Altman and Brockman sought to establish a for-profit arm as early as 2017, while Musk proposed merging OpenAI with Tesla. When Musk threatened to stop funding, Altman and Brockman told him they were committed to keeping the company a nonprofit. Musk alleges they pursued the for-profit pivot without informing him.

OpenAI has countered that Musk agreed the company needed a for-profit entity and even wanted to serve as its CEO. Legal analysts have also noted that even if Musk proves he was misled, he may lack standing to sue over the restructuring.

The trial comes at a critical moment for OpenAI, which has been preparing for a highly anticipated initial public offering. A ruling against the company could force changes to its corporate structure or leadership at a pivotal stage in its growth.