OpenAI trial begins, pitting Elon Musk against Sam Altman

A courtroom fight with sweeping implications for the future of artificial intelligence gets underway today, as billionaires Elon Musk and Sam Altman face off over OpenAI’s transformation from a nonprofit venture into a profit-driven powerhouse valued in the hundreds of billions of dollars.

Opening statements in Mr Musk’s civil case against OpenAI and Mr Altman are set for federal court in Oakland, California, after nine jurors were selected yesterday.

Mr Musk alleges that Mr Altman and Greg Brockman, OpenAI’s chief executive and president, betrayed both him and the public by abandoning the company’s founding mission of serving humanity through benevolent AI stewardship and instead turning it into what he calls a “wealth machine” for themselves and investors.

The world’s richest person is seeking $150 billion in damages from OpenAI and Microsoft, one of the startup’s biggest backers, with any proceeds directed to OpenAI’s charitable arm.

Both Mr Musk and Mr Altman arrived at the courthouse early this morning ahead of the opening arguments.

Mr Musk, the founder of Tesla and SpaceX, has said he contributed about $38 million in seed funding to launch OpenAI under its original mission, only to watch it establish a for-profit entity in March 2019, just over a year after he stepped down from its board.

OpenAI has pushed back, saying Mr Musk knew about and supported the shift, and only turned to litigation after failing to become CEO and later launching his own AI company in an effort to slow OpenAI’s rise.

Mr Musk is no longer seeking damages for himself as he advances claims of breach of charitable trust and unjust enrichment.

US District Judge Yvonne Gonzalez Rogers has said she wants jurors to begin deliberating on the defendants’ liability by 12 May.

The panel includes nurses, city workers and retirees.

If jurors find the defendants liable, the judge will then hear arguments from both sides over potential remedies.

Mr Musk, Mr Altman and Microsoft chief Satya Nadella are among the high-profile witnesses expected to testify, with Musk likely to take the stand as soon as this week.

Trial risks complicating OpenAI IPO plans

Mr Musk and Mr Altman co-founded OpenAI in 2015 with the stated aim of building AI that would benefit humanity while keeping pace with rivals such as Google.

The trial is expected to shed light on the ambitions, rivalries and personalities that helped shape OpenAI’s journey from a nonprofit research lab operating out of Mr Brockman’s apartment into a company valued at more than $850 billion.

It could also cloud OpenAI’s path toward a potential initial public offering by raising fresh questions about its leadership, while deepening broader public anxiety in the United States over the rapid advance of AI technology.

OpenAI has argued that Mr Musk is acting out of jealousy, seeking to undermine the company’s expansion while boosting his own venture, xAI, which he founded in 2023 shortly after OpenAI introduced ChatGPT.

The company says Mr Musk took part in discussions over OpenAI’s revised structure and at one point demanded to be CEO.

Microsoft has denied colluding with OpenAI and says its partnership began only after Mr Musk had departed.

OpenAI is facing mounting pressure from competitors including Anthropic, even as it spends billions to secure the computing power needed to stay ahead.

A potential IPO could value the company at $1 trillion, according to reports.

Musk’s xAI remains far behind OpenAI in usage.

He has folded that business into his rocket company SpaceX, whose own potential IPO this year could rank as the largest ever.

Last fall, OpenAI revamped its structure once more, becoming a public benefit corporation in which the nonprofit and other investors, including Microsoft, hold stakes.

The non-profit holds a 26% stake, along with warrants tied to certain valuation targets.

That public benefit corporation structure could make OpenAI more attractive to investors while preserving a link to its charitable roots.