Musk and Altman face off in court over OpenAI's for-profit pivot

The closely watched trial between Elon Musk and OpenAI CEO Sam Altman kicked off in federal court in Oakland. Both sides laid out wildly different versions of the AI lab's early days.

Musk compared OpenAI's shift to a for-profit company to one of the biggest heists in history, the New York Times reports. "This lawsuit is very simple: It is not OK to steal a charity," Musk said on the witness stand. If Altman wasn't stopped, he added, "It will give license to looting every charity in America."

OpenAI's lead counsel William Savitt told a different story in his opening statement. According to Savitt, Musk was the real greedy capitalist - someone who tried to take full control of OpenAI and stormed off when the other founders pushed back. "We are here because Musk didn't get his way at OpenAI," Savitt said. "My clients had the nerve to go on and succeed without him."

The nine-person jury, with federal Judge Yvonne Gonzalez Rogers presiding, will hear from former board members, employees, and tech executives over the course of a trial expected to run about a month. Musk is seeking $150 billion in damages and a court order to unwind OpenAI's restructuring, which wrapped up in October.

Dueling emails over the profit question

Musk pointed to a conversation with Google co-founder Larry Page as the spark that led him to start OpenAI. Page had called him a "speciesist" for putting humans ahead of future digital life-forms. "I wanted a company to be a counterweight to Google - to be the opposite of Google," Musk said. He claimed he came up with the name, recruited the key people, and put up the funding.

Savitt fired back with emails from the early days. In 2015, Musk wrote that it was "probably better to have a standard C corp with a parallel nonprofit." A year later, he said "it might have been a mistake for OpenAI to be set up as a nonprofit, given progress Deepmind was making." By 2017, as the founders realized just how much computing power they'd need, Musk allegedly tried to "turn OpenAI into a full-on for-profit company and take absolute control of it," according to Savitt. The other founders, he said, "refused to turn the keys of artificial intelligence over to one person."

Musk admitted he had been open to a for-profit subsidiary, but only if profits were capped and any money flowed back to the nonprofit. One proposal would have split equity equally between Musk, Altman, Greg Brockman, and chief scientist Ilya Sutskever. Musk called that "unfair and inappropriate," saying he had been "providing all of the funding" up to that point. He ultimately walked away, he said, because the other founders wanted too much equity.

Microsoft's role and the timing of Musk's outrage

Musk's attorney Steven Molo accused Microsoft of being a willing accomplice when the company started pouring $13 billion into OpenAI in 2019. Microsoft, Molo told the jury, stood by while Altman and Brockman made "an absolute mockery of OpenAI's charitable mission." Microsoft attorney Russell Cohen pushed back, saying that "unlike Mr. Musk, Microsoft never tried to control OpenAI."

Savitt argued the lawsuit is really about Musk trying to kneecap a rival to his own AI company, xAI. After leaving in 2018, Musk showed no interest in OpenAI for years - not even when Microsoft made its first billion-dollar investment in 2019. It was only after ChatGPT took off in 2022, Savitt said, that "the sour grapes kick in."

The nonprofit, now called the OpenAI Foundation, still controls the company and holds a 26 percent equity stake. Microsoft holds 27 percent. The jury will deliver an "advisory verdict," but the final ruling and any remedies are up to Judge Gonzalez Rogers.

Judge tells both sides to cool it on social media

Before opening statements, Musk got a dressing-down from the judge, who told him to "control your propensity to use social media to make things worse outside this courtroom," Bloomberg reports. Musk had been mocking Altman on X as "Scam Altman" and amplifying a critical New Yorker investigation by Ronan Farrow about the OpenAI CEO. In court, Musk, Altman, and Brockman agreed to a "clean slate beginning today" and promised to keep social media activity around the trial to a minimum.

Security at the courthouse has been ramped up after a man, reportedly hostile toward AI, was arrested for allegedly throwing a firebomb at Altman's home in San Francisco. Both Musk and Altman were ushered in through a private entrance while attorneys and reporters lined up outside.