Elon Musk is suing OpenAI for billions of dollars over a broken promise, as the trial pitting him against Sam Altman and the artificial intelligence company began in earnest on Tuesday with opening arguments. Lawyers for both sides are now seeking to convince a California jury of their client’s version of OpenAI’s history, in a case that will feature testimony from the two tech billionaires and some of the most powerful executives in the industry.
The Founding Promise and the Alleged Breach
At the heart of Mr Musk’s lawsuit is a claim that Sam Altman, OpenAI and its president, Greg Brockman, reneged on a foundational agreement to develop artificial general intelligence (AGI) for the benefit of all humanity. OpenAI was established in December 2015 as a non-profit research organisation, co-chaired by Mr Musk and Mr Altman, with an initial mission to ensure that AGI would be developed safely and would not be captured for private profit. A billion dollars in capital was pledged at the time, although actual collected funds lagged significantly.
By early 2017, the organisation realised it would need billions of dollars in computing power to build AGI, and Mr Musk and OpenAI leadership agreed that a for-profit structure would be necessary to advance the mission. However, disagreements erupted in the autumn of 2017 when, according to OpenAI, Mr Musk demanded majority equity, absolute control and the chief executive role of that for-profit entity. The company rejected those terms, arguing that giving Mr Musk unilateral control would contradict the founding mission. Mr Musk then proposed merging OpenAI into his electric car company, Tesla, suggesting it could become Tesla’s “cash cow”. He resigned from OpenAI’s board in February 2018, stating that OpenAI needed a competitor to Google and DeepMind — and that he would create one himself.
OpenAI has since published emails that it claims show Mr Musk was fully aware of and supported the move towards a for-profit model. The company maintains that Mr Musk only received less than $45 million of his pledged $1 billion. Nonetheless, Mr Musk argues that the pivot from a non-profit to a “capped-profit” subsidiary in 2019, and then to a Public Benefit Corporation (PBC) in December 2024, broke the original agreement. He alleges that his co-founders unjustly enriched themselves as the company raised billions and grew into an AI behemoth, and that the non-profit’s control over the for-profit arm is now “illusory”. The PBC restructuring, which has been approved by regulators, removes the profit caps and legally allows the company to prioritise shareholder returns over public benefit, according to critics.
The Personal Feud
The trial marks the culmination of a years-long feud between Mr Musk and Mr Altman that has become increasingly vicious. As jury selection began on Monday, Mr Musk posted a stream of insults against Mr Altman on X, the social media platform he owns, including repeatedly calling him “Scam Altman”. He also used his power over the platform to boost a post to his followers that featured an unflattering investigation of Mr Altman by the New Yorker earlier this month.
OpenAI rejects all of Mr Musk’s claims, characterising him as an embittered co-founder seeking revenge after failing to take total control. The company has pointed out that Mr Musk started his own rival AI company, xAI, in March 2023, alleging that “this lawsuit has always been a baseless and jealous bid to derail a competitor”. xAI, which develops the AI chatbot Grok and has attracted significant investment, is valued at approximately $75 billion as of March 2025. In early 2025, Mr Musk reportedly made an unsolicited bid of $97.4 billion to buy OpenAI’s non-profit arm — an offer that Mr Altman publicly declined.
The two tech leaders arrived at the Oakland federal courthouse on Tuesday morning, passing through security around 15 minutes apart. Mr Altman and Mr Brockman were present on Monday, but Mr Musk was nowhere to be seen. In the early hours of Tuesday, long lines snaked outside the courthouse as reporters, legal teams and court watchers waited to get inside.
The Stakes for OpenAI
The outcome of the case carries potentially enormous stakes for OpenAI, which is preparing for a potential initial public offering later this year at about a $1 trillion valuation. The company’s revenue reached $13.1 billion in 2025, with projections to exceed $280 billion by 2030, though it remains significantly loss-making and is not expected to be profitable until around 2030. Mr Musk is seeking to undo the corporate restructuring, force the removal of Mr Altman as chief executive and Mr Brockman as president, and obtain around $134 billion in damages, which he wants redistributed to OpenAI’s non-profit arm.
On Monday, nine jurors were seated after a day-long selection process that included a questionnaire about their feelings towards artificial intelligence and Mr Musk. Many prospective jurors said they held negative views of the Tesla chief executive and had concerns about AI. Judge Yvonne Gonzalez Rogers, who is presiding over the case, assured the court that it would not focus on technical details. “This is just a case about promises and breaches of promises, it won’t get technical at all,” she said. Judge Rogers has a history of handling high-profile technology cases, including Epic Games v. Apple, and has ruled that Mr Musk’s main claim is worthy of trial, calling it a “toss up”.
The trial is expected to last around three weeks. Other tech industry bigwigs who may testify include Microsoft chief executive Satya Nadella, expected to testify for half a day about the company’s partnership with OpenAI and its support during a brief ouster of Mr Altman in November 2023, and Shivon Zilis, a former OpenAI board member and current executive at Neuralink who is also the mother of four of Mr Musk’s children. OpenAI’s legal team has argued that Ms Zilis acted as an “Elon whisperer”, funneling internal information to Mr Musk, and that her romantic relationship with him and their children are “highly relevant to Zilis’ credibility”.
