Musk Sues OpenAI for $150B Over Nonprofit Betrayal

Elon Musk has filed a $150 billion lawsuit against OpenAI, its CEO Sam Altman, and Microsoft, alleging they betrayed their original nonprofit agreement. The trial began on April 28 at the U.S. District Court for the Northern District of California in Oakland.

Musk co-founded OpenAI with Altman and Greg Brockman in 2015 as a nonprofit research lab aimed at benefiting humanity without being beholden to shareholders. He invested about $38 million from December 2015 through May 2017, according to multiple sources including CBS News and Al Jazeera. Musk left OpenAI in 2018 and now accuses it of betraying its initial nonprofit status by creating a for-profit entity valued at $852 billion, as reported by Reuters.

As the trial entered its second week, focus shifted to Greg Brockman's personal diary, which has become central evidence. Musk's attorneys presented excerpts from Brockman's journal to portray him as self-interested and deceptive. One entry read, 'Financially what will take me to $1B?' Another noted, 'It’d be wrong to steal the non-profit from him... he’s really not an idiot.' Judge Yvonne Gonzalez Rogers cited these entries in her decision to deny OpenAI's motion to prevent the case from going to trial.

During testimony, Brockman disclosed deeper financial ties to Altman than previously known. He revealed a stake in OpenAI worth nearly $30 billion and ownership shares in AI chip startup Cerebras and fusion startup Helion Energy, both backed by Altman. Emails read out in court showed that Altman compensated Brockman with a percentage of his family office, potentially aligning Brockman's interests more closely with Altman's.

Musk took the stand for several days, repeatedly accusing Altman and Brockman of trying to 'steal a charity.' He testified about his concerns over AI safety and his belief that OpenAI's for-profit arm became 'the tail wagging the dog.' According to CNBC and The Guardian, Musk stated, 'Fundamentally, I think they're going to try to make this lawsuit...very complicated, but it's actually very simple. Which is that it's not OK to steal a charity.'

OpenAI has denied all of Musk's claims, arguing that he was always aware of the intent to create a for-profit structure and that OpenAI still seeks to benefit humanity through AI. They published a blog post titled 'The Truth Elon Left Out' attempting to show that Musk's team misused quotes from Brockman's diary.

Traders on Kalshi now say Musk has roughly a 36% chance of winning his case, down from nearly 60% earlier in the trial. A filing revealed that Musk texted Brockman about a settlement just days before the trial began, with Musk warning, 'By the end of this week, you and Sam will be the most hated men in America.'

Shivon Zilis testified in federal court on Wednesday, May 1st, as part of Elon Musk's lawsuit against OpenAI. According to BBC News, Zilis stated that around late 2020, Elon Musk offered to donate sperm after noticing she did not have children and was encouraging those around him to have kids. Shivon Zilis has worked as a venture capitalist for over 15 years and held executive positions at Tesla and Neuralink.

Zilis joined OpenAI as an advisor in 2016 and served as a director from 2020 to 2023, making her an important witness in the trial. According to The Guardian, Zilis testified as a highly anticipated witness in Musk's case against OpenAI on Wednesday. Musk's lawsuit alleges that Sam Altman and Greg Brockman broke a founding agreement by restructuring OpenAI from a non-profit to a for-profit enterprise.

Greg Brockman described a heated 2017 meeting with Elon Musk over Musk's attempt to control OpenAI, stating 'I actually thought he was going to hit me.' According to BBC News, Brockman testified that after rejecting Musk's proposal for more control, Musk announced he would start withholding funding from OpenAI. Lawyers for OpenAI showed text messages from August 2017 between Ilya Sutskever and Brockman discussing a Model 3 car in exchange for accepting unfavourable terms.

Prediction market traders initially gave a 60% likelihood of Musk winning the case, which dropped to just under 34% on May 2nd. According to CNBC, Musk accused OpenAI CEO Sam Altman and president Greg Brockman of trying to 'steal a charity' during his testimony.

Elon Musk contacted OpenAI President Greg Brockman two days before the trial to gauge interest in a settlement. According to Reuters, Brockman suggested both sides drop their claims, and Musk allegedly responded that they would become 'the most hated men in America' if they did not.