Why Elon Musk Is Suing the CEO of OpenAI

Sam Altman, the CEO of OpenAI, took the witness stand on May 12 to defend himself in a lawsuit brought by Elon Musk. The trial is taking place in federal court in Oakland and has been running for three weeks. The case centers on a single core question: did OpenAI abandon the mission it was founded with.

Altman spent his time on the stand answering questions from Musk's lawyer, Steven Molo. Musk is accusing Altman, OpenAI co-founder Greg Brockman, and Microsoft of betraying OpenAI's original purpose, which was to develop safe artificial intelligence that would benefit humanity. Musk is asking a court to remove Altman from his leadership role.

What Started the Fight

Musk and Altman co-founded OpenAI together in 2015. The company began as a nonprofit organization—that is, an organization meant to operate for public benefit rather than profit.

Over time, things changed. OpenAI partnered with Microsoft and developed commercial products. Microsoft invested billions of dollars into the company. Altman has said in court that Musk wanted control of the organization and even suggested merging it with Tesla, his electric car company. If that had happened, Altman testified, OpenAI would have lost its nonprofit status.

According to Altman's testimony, Musk eventually left OpenAI and did not remain involved as the company tried to figure out its future, according to CNBC.

What the Lawsuit Claims Musk Is Owed

The financial stakes of this dispute are substantial. An expert hired by Musk's legal team calculated that Musk could be entitled to between 50 and 75 percent of OpenAI's current nonprofit value based on his early contributions when the company was getting started.

OpenAI tried to prevent that expert analysis from being presented in court.

Other Issues the Trial Is Examining

Altman also addressed questions about his own business investments and a brief period in November 2023 when OpenAI's board temporarily removed him as CEO. He was brought back after employees and investors pushed for his return.

The trial is looking at a broader question: can OpenAI still operate as a nonprofit—a tax-advantaged form that assumes the organization serves the public good—when it has a major commercial partnership with Microsoft and generates substantial profit.

Musk testified earlier on April 29, presenting his own account of events.

Why This Matters

This dispute between two prominent technology figures follows a pattern we have seen before in Silicon Valley. When a company grows from a small startup to a large, profitable business, the founders often disagree about what the company should do and who should run it. Similar tensions have appeared at Apple, Facebook, and Twitter.

The bigger picture here is that building cutting-edge artificial intelligence systems requires enormous amounts of money and computing power. OpenAI needs resources on a scale that a nonprofit alone cannot easily provide. That creates a genuine tension: how do you keep a research mission focused on safety when you also need commercial revenue and investor backing to survive.

For the artificial intelligence industry broadly, this case touches on questions that matter right now. How should AI companies organize themselves. How do they stay true to their original purposes when they scale up. And how do they balance the drive to build profitable products with concerns about safety and responsible development. The outcome of this trial could influence how other AI organizations structure themselves going forward.

The trial is expected to continue for three more weeks. The jury will ultimately decide not just whether Musk is owed money or control, but what this case signals about how young technology companies should manage their transition from research-focused missions to commercially viable businesses.