Elon Musk testified this week that OpenAI founders Sam Altman and Greg Brockman deceived him into funding the company, which he claims was intended as a charity for humanity's benefit. During his testimony, Musk also acknowledged that his own artificial intelligence company, xAI, has utilized models from OpenAI to train its systems.
The first week of the landmark trial between Elon Musk and OpenAI saw the Tesla CEO take the stand in Oakland, California, asserting that OpenAI's leadership betrayed its founding mission. Musk, who invested approximately $38 million in OpenAI between December 2015 and May 2017, claims he was misled into bankrolling a nonprofit entity that has since transformed into a for-profit giant valued at $852 billion. He stated that OpenAI's founders promised a nonprofit structure dedicated to benefiting all of humanity, but instead pursued personal enrichment. Musk's lawsuit seeks the removal of Altman and Brockman from their leadership roles and the restoration of OpenAI to its original nonprofit status.
During cross-examination, Musk admitted that his company, xAI, has employed a technique known as model distillation, where one AI model is used to train another. He stated that "generally all the AI companies" engage in this practice and that xAI "partly" used OpenAI's technology. Musk justified this by saying, "It is standard practice to use other AIs to validate your AI." Model distillation involves using the outputs from a larger, more capable AI model to train a smaller, more efficient one. While common in the industry, this practice has become increasingly contentious, with concerns raised about potential intellectual property theft and the circumvention of research and development costs. OpenAI's terms of service reportedly prohibit the use of its model outputs for training competing AI systems.
Musk's testimony focused heavily on OpenAI's origins as a nonprofit. He stated that he specifically chose not to start OpenAI as a for-profit entity, emphasizing its intended role as a "charity that does not benefit any individual person." He described OpenAI's evolution into a for-profit venture, particularly after Microsoft's substantial investment in late 2022, as a "bait and switch." Musk also voiced concerns about the broader implications of OpenAI's shift, suggesting that if the company wins, it could set a precedent for "looting every charity."
OpenAI's legal team has countered that Musk's lawsuit is an attempt to undermine a competitor to his own AI company, xAI, which he launched in 2023. They argue that there were no promises that OpenAI would remain a nonprofit indefinitely and that Musk's complaints arose after ChatGPT's significant success. The company's lawyers have also pointed out that Musk himself launched a for-profit AI company, xAI, a year after OpenAI's ChatGPT gained widespread attention.
The trial, which began in late April 2026, is expected to last approximately four weeks. Judge Yvonne Gonzalez Rogers is presiding over the case. The outcome could have significant implications for OpenAI's planned initial public offering (IPO) and its overall valuation.
Musk's account of OpenAI's founding highlighted his role in recruiting key talent, such as AI researcher Ilya Sutskever, and in securing crucial computing resources through his connections with Microsoft CEO Satya Nadella and Nvidia CEO Jensen Huang. He also referenced conversations with Google founder Larry Page, suggesting that Page's lack of concern for AI safety influenced his decision to help establish OpenAI as a nonprofit alternative to Google's AI development.
During his testimony, Musk also touched upon the existential risks posed by artificial intelligence, drawing parallels to the film "The Terminator." While the judge ruled that testimony on AI safety risks would not be admissible, Musk's concerns reflect a broader debate within the AI community regarding the responsible development and deployment of advanced AI systems.
The trial has already revealed numerous internal documents and communications between key figures at OpenAI and Musk, offering a detailed look into the company's early days and the subsequent fallout between its co-founders. The case centers on Musk's contention that OpenAI breached its charitable trust and unjustly enriched its leaders by deviating from its original nonprofit mission.