OpenAI trial over Elon Musk’s lawsuit against Sam Altman begins in California

WASHINGTON: A closely watched trial involving Elon Musk, Sam Altman and OpenAI began on Tuesday in federal court in Oakland, California, in a case that could influence debate over the future direction of artificial intelligence.

Opening statements in Musk’s civil lawsuit against OpenAI and Altman were scheduled after a nine-member jury was selected on Monday. According to the case, Musk alleges that Altman, OpenAI chief executive, and Greg Brockman, the company’s president, departed from OpenAI’s original mission and turned the organisation from a nonprofit focused on benefiting humanity into what he describes as a wealth-generating enterprise for executives and investors.

Musk is seeking $150 billion in damages from OpenAI and Microsoft, one of the company’s biggest backers, with the money to go to OpenAI’s charitable arm. He is also asking the court to require OpenAI to return to nonprofit status, remove Altman and Brockman from their executive roles, and remove Altman from the board.

The Tesla and SpaceX chief has said he contributed about $38 million in seed funding to OpenAI when it was founded around its original mission. OpenAI created a for-profit entity in March 2019, a little more than a year after Musk left its board.

OpenAI has rejected Musk’s claims and argued that he was aware of and supported the shift in structure. The company has also said Musk filed suit only after he failed to become chief executive and later launched his own artificial intelligence company in an effort to slow OpenAI’s expansion. Musk is no longer seeking damages for himself as he pursues breach of charitable trust and unjust enrichment claims.

Witnesses and timeline

US District Judge Yvonne Gonzalez Rogers has said she wants jurors to begin deliberating on liability by May 12. If the jury finds the defendants liable, the question of remedies will then be argued before the judge.

The jurors selected for the case include nurses, city employees and retirees. Musk, Altman and Microsoft chief executive Satya Nadella are among the expected witnesses, and Musk could testify as early as this week.

Dispute over OpenAI’s evolution

Musk and Altman co-founded OpenAI in 2015 with the stated aim of developing artificial intelligence for the benefit of humanity and to compete with rivals such as Google. The trial is expected to revisit the company’s transformation from a nonprofit research lab operating out of Brockman’s apartment into a business valued at more than $850 billion.

The proceedings could complicate OpenAI’s plans for a possible initial public offering by raising questions about its leadership. The case may deepen broader public concerns in the United States about AI technology.

OpenAI has argued that Musk’s actions were driven by jealousy and by an effort to support xAI, the company he founded in 2023 after OpenAI launched ChatGPT. It has also been said that Musk took part in discussions about OpenAI’s revised structure and sought the chief executive role.

Microsoft has denied colluding with OpenAI and has said its partnership with the company began only after Musk had departed.

OpenAI is facing increasing competition from companies including Anthropic and is spending billions of dollars on computing resources. Reuters has reported that a future IPO could value the company at $1 trillion. Musk’s xAI remains well behind OpenAI in usage, and that he has folded the business into SpaceX, whose own possible IPO this year could be the largest on record.

Last fall, OpenAI changed its structure again and became a public benefit corporation, under which the nonprofit and other investors, including Microsoft, hold stakes. The nonprofit holds a 26% stake, along with warrants tied to certain valuation targets. The public benefit corporation model could make OpenAI more attractive to investors while preserving its charitable roots.

Musk claims that Altman and Greg Brockman, respectively OpenAI's chief executive and president, betrayed him and the public by abandoning the company's mission to be a benevolent steward of AI for the benefit of humanity, and turning it into a "wealth machine" for themselves and investors.