"‘AI Century Lawsuit’ Begins: Musk Takes the Stage, Claims ‘OpenAI and Altman are Thieves; If They Lose, the U.S. Will Lose All Non-Profit Organizations’"

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The century-defining legal battle between Musk and OpenAI has officially begun, a lawsuit viewed by outsiders as one that could reshape the landscape of the artificial intelligence industry. The verdict could directly threaten OpenAI’s valuation of hundreds of billions of dollars and its IPO plans.

On Tuesday, according to The Wall Street Journal, Musk appeared in person to testify at the federal court in Oakland, California. Upon taking his seat, he stared directly at the jury and succinctly characterized the lawsuit: "They will try to make this case look very complicated, but it’s actually very simple—stealing a nonprofit organization, which is unacceptable."

He further warned that if he loses the case, "the United States could lose every nonprofit institution." Presiding Judge Yvonne Gonzalez Rogers immediately intervened, reminding the jury that Musk’s statement only represents his personal opinion and "is not legally binding."

OpenAI fired back forcefully, accusing Musk of launching this case as a "harassment tactic" after losing out in startup competition, and claiming that the true motive behind the lawsuit is that Musk failed to gain control of OpenAI and has since founded competitor xAI. The four-week trial will decide whether the corporate restructuring completed by OpenAI last year can stand and will directly impact its potential trillion-dollar IPO prospects.

Musk: I’m the founder, Altman is a "thief"

In his testimony, Musk emphasized his key contributions to the founding of OpenAI, stating he came up with the idea, named the company, recruited key talent, shared everything he knew, and provided all the initial funding. He stressed that OpenAI’s original intention was "a charitable cause for the benefit of all humanity, and no individual should profit from it."

Musk’s chief attorney, Steven Molo, compared OpenAI to a nonprofit museum with a gift shop in his opening statement, saying, "The museum’s shop can't sell off a Picasso and pocket the money themselves." Molo also referenced a photo of Musk’s 2015 White House meeting with then-President Obama to show the jury Musk’s long-standing concern with AI safety issues.

Musk explained that part of his reason for participating in the founding of OpenAI was concern over Google’s attitude toward AI safety. He described a conversation with Google co-founder Larry Page—he asked Page about the risk of AI eliminating humanity, to which Page responded that as long as AI could exist, such an outcome "didn't matter," and called Musk "pro-human." Musk said this response was "crazy," concluding the world needed another AI company to balance Google.

OpenAI retaliates: Musk turned after failing to seize control

OpenAI’s narrative stands in stark contrast to Musk’s. Its chief attorney William Savitt opened by showing a 2016 photo taken in Greg Brockman's apartment, depicting Ilya Sutskever and Sam Altman working in a modest living room with Musk absent. Savitt said those who truly put in "sweat equity" were these co-founders, while Musk only "showed up occasionally," offered some advice, and "occasionally yelled at people for not moving fast enough."

The court also displayed an internal email showing Musk once proposed taking 55% of OpenAI's equity, whereas Altman, Brockman, and co-founder Ilya Sutskever would each receive 7.5%. Savitt said the co-founders rejected this plan, "refusing to hand the keys to artificial intelligence to a single person."

Savitt stated directly: "We are here today because Musk didn’t get what he wanted at OpenAI...because he is now competing with OpenAI through xAI...As a competitor, he will stop at nothing to attack OpenAI." OpenAI also pointed out that the case was filed after the statute of limitations had expired and just happened to coincide with the massive success of ChatGPT and Musk's founding of xAI.

Focus of the dispute: Donation promises and control struggle

According to the UK’s Financial Times, Musk alleges in the lawsuit that he was induced to donate about $38 million to OpenAI, believing the organization would remain a nonprofit. However, the figures disclosed at trial show Musk’s actual donations totaled $25 million in cash and $12.5 million worth of rent, far less than his promised $1 billion.

OpenAI cited a bar chart showing that between 2016 and 2020, other donors' contributions far exceeded Musk’s. Savitt emphasized, "There is no record of any commitment to Musk that OpenAI would remain a nonprofit forever," adding, "The only person claiming to have heard such promises is Musk himself."

In his testimony, Musk admitted he did not oppose actually setting up a for-profit entity to raise funds, attract talent, and obtain computing power at the time, but said the premise was that the entity must serve the nonprofit parent. He stated, "A for-profit entity taking the vast majority of value from a nonprofit is unacceptable."

The remedies Musk is seeking in this case are extremely aggressive, including: requiring OpenAI’s for-profit arm to pay over $180 billion in damages to its nonprofit parent, reversing last year’s corporate restructuring, and removing Altman and Brockman from the company’s leadership.

If Musk wins, OpenAI’s corporate restructure completed in October last year may be overturned, threatening its potential trillion-dollar IPO plans and investors’ expectations for huge returns. Microsoft, OpenAI’s largest shareholder, is also listed as a defendant, accused of "aiding and abetting" OpenAI’s actions, which Microsoft denies in full.

Legal experts widely believe Musk is at a disadvantage in this case. During jury selection, Musk’s political stances also caused some controversy—some prospective jurors described him as "trash" and a "world-class jerk" in their questionnaires, to which presiding judge Gonzalez Rogers stated, "A lot of people dislike him, but that doesn’t mean Americans can’t be fair in judicial proceedings."

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