OpenAI trial between Elon Musk and Sam Altman begins in California
Musk seeks $150 billion in damages as OpenAI disputes his claims and central questions loom over its future structure
Oakland, California: A trial that could help shape the future of artificial intelligence begins on Tuesday, as billionaires Elon Musk and Sam Altman face off over the evolution of ChatGPT maker OpenAI from a nonprofit into a profit-seeking giant valued at hundreds of billions of dollars.
Opening statements in Musk’s civil lawsuit against OpenAI and Altman will take place in federal court in Oakland, California, after the selection on Monday of nine jurors.
Musk alleges that Altman and Greg Brockman, 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.
The world’s richest person is seeking $150 billion in damages from OpenAI and Microsoft, one of its largest investors, with proceeds to go to OpenAI’s charitable arm. He also wants OpenAI to revert to a nonprofit, with Altman and Brockman removed as officers and Altman removed from its board.
Musk, the Tesla and SpaceX founder, has said he provided about $38 million in seed funding to OpenAI for its original mission, only to see OpenAI create a for-profit entity in March 2019, a little over a year after he left its board.
OpenAI has countered that Musk knew about and supported the transformation and sued only after failing to become CEO, and after starting his own AI company to stunt OpenAI’s growth.
Musk is no longer seeking damages for himself, as he pursues claims including breach of charitable trust and unjust enrichment.
U.S. District Judge Yvonne Gonzalez Rogers has said she wants jurors to begin deliberations on the defendants’ liability by May 12. The jurors include nurses, city workers and retirees. If they find the defendants liable, both sides will argue possible remedies to the judge.
Musk, Altman and Microsoft chief Satya Nadella are among the witnesses expected to testify, with Musk taking the stand as soon as this week.
Egos and personalities
Musk and Altman co-founded OpenAI in 2015 with a goal of developing AI to benefit humanity and fend off rivals such as Google.
The trial could offer a window into the personalities that shaped OpenAI as it evolved from a nonprofit research lab in Brockman’s apartment into a company worth more than $850 billion.
It could complicate OpenAI’s plans for a potential initial public offering by raising questions about its leadership, and it could also intensify Americans’ fears about AI technology more broadly.
OpenAI has argued that Musk was motivated by jealousy and is trying to undermine OpenAI’s growth and bolster his own xAI, which he founded in 2023, shortly after OpenAI launched ChatGPT. OpenAI has said Musk was involved in discussions to create OpenAI’s new structure and demanded to be CEO.
Microsoft has denied colluding with OpenAI and says it partnered with OpenAI only after Musk left.
OpenAI faces growing competition from rivals including Anthropic and is spending billions on computational resources. A potential IPO could value the company at $1 trillion, Reuters has reported.
Musk’s xAI trails far behind OpenAI in usage. He has folded that business into SpaceX, whose own potential IPO this year could be the largest ever.
Last fall, OpenAI overhauled its structure again to become a public benefit corporation, in which the nonprofit and other investors, including Microsoft, hold stakes. The nonprofit holds a 26% stake, plus warrants if OpenAI hits certain valuation targets.
A public benefit corporation could make OpenAI more investor-friendly while retaining its charitable origins.