Results out this week! Musk vs Altman—a lawsuit that's "life-or-death" for OpenAI
The most intense business feud between America’s two AI giants will be officially decided by the courts this week.
This week, Musk and Altman’s lawsuit will open at the United States District Court for the Northern District of California, with jury selection scheduled to begin on Monday, and opening statements and witness testimonies expected from Tuesday.
Musk is demanding the court restore OpenAI as a purely non-profit research organization and is seeking up to $134 billion in damages from OpenAI and Microsoft, while also demanding the removal of Altman and OpenAI President Greg Brockman.
If Musk wins, it could force OpenAI to reverse its lucrative restructuring completed in October last year—a restructuring Altman views as crucial to OpenAI's pursuit of Artificial General Intelligence (AGI) and securing large-scale funding.
Columbia Law Professor Dorothy Lund says:
This is extremely risky for OpenAI and almost a matter of life and death. Any one of Musk’s demands could become the end of OpenAI.
OpenAI is now valued at $852 billion and is preparing for what could be one of the largest IPOs in history. According to Bloomberg Intelligence, Musk has a 60% probability of winning at trial.
A Decade-Long Feud, Now in Court
Musk and Altman co-founded OpenAI more than a decade ago, but their relationship completely broke down after Musk left in 2018 and gradually evolved into open hostility.
In this lawsuit, Musk claims that Altman and other OpenAI executives abandoned the company's altruistic founding principles, using Microsoft’s approximately $13 billion investment to drive profit-oriented transformation for their own gain.
OpenAI and Altman counter that Musk is trying to stifle competition and clear the way for xAI, the AI company he co-founded in 2023, and have filed a countersuit regarding Musk’s years of “harassment”—though that countersuit is outside the scope of this trial.
Musk initially brought 26 claims in November 2024, but many have been dismissed, withdrawn, or delayed. Just a week before trial, Musk voluntarily withdrew two fraud claims.
The final claims submitted to the jury focus on two points: breach of charitable trust and unjust enrichment.
OpenAI is now at a critical juncture. In 2023, Altman was briefly ousted, nearly causing the ChatGPT parent company to collapse.
At that time, investors and employees pressured the board to reinstate him. If the current lawsuit sparks similar turmoil, competitors—including Musk’s xAI, which develops the Grok chatbot—could seize the opportunity.
If Musk wins, Microsoft also stands to lose greatly. Microsoft obtained a 27% stake in OpenAI after the restructuring.
Arguments: Who Upholds the Mission?
OpenAI argues that Musk’s accusations are unfair: he actually supported profit-oriented transformation early on and even proposed that Tesla acquire OpenAI.
Microsoft maintains that its investment in OpenAI is a crucial source of funding for cutting-edge technology development and denies it “aided and abetted” any deviation from OpenAI’s founding mission.
Hundreds of pages of trial evidence have been made public, including text messages between Musk and Zilis regarding Musk’s relationship with OpenAI, and early emails among Musk, Altman, Brockman, and Sutskever.
According to Bloomberg, the trial will be conducted in two stages:
In the first stage, the jury will decide whether Musk’s accusations against OpenAI, Altman, Brockman, and Microsoft are valid;The second stage will determine the remedies based on those findings.
After testimonies, the jury will issue an “advisory verdict,” with the final judgment and relief determined by Judge Gonzalez Rogers, who will consider the jury’s findings.
Win or Lose, Both Stand to Gain?
Musk and Altman are both expected to testify in the first stage.
Other possible witnesses include: Microsoft CEO Satya Nadella, Musk’s longtime business aide Jared Birchall, OpenAI’s former chief scientist Ilya Sutskever, and several current and former OpenAI employees and board members, including Shivon Zilis, who has four children with Musk.
Bloomberg Intelligence analysts Matthew Schettenhelm and Tamlin Bason estimate Musk’s probability of winning this trial at 60%, but also note that the case is vulnerable to subsequent appeals.
Even if Musk loses, the case may not be fruitless for him.
Dorothy Lund points out that the trial will force OpenAI’s internal operations information into the public domain. Lund said:
Some of this will be very valuable for his private efforts in the AI race. In a certain sense, just getting the case to trial is already a major win for Musk from an information-gathering perspective.
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