Elon Musk’s Legal Team Challenges OpenAI in High-Stakes Court Battle

Elon Musk’s Lawyer Accuses OpenAI of “Stealing a Charitable Organization” in High-Stakes Trial

OAKLAND, Calif. — On the second day of a closely watched legal battle between Elon Musk and OpenAI, the Tesla and SpaceX CEO’s attorney framed the dispute as a moral betrayal, alleging that OpenAI’s leadership had effectively “stolen a charitable organization” by converting it into a for-profit entity. The trial, unfolding in federal court in Oakland, California, centers on Musk’s 2024 lawsuit against OpenAI, its CEO Sam Altman, and President Greg Brockman, which claims they violated the company’s original nonprofit mission.

Steven Molo, lead trial lawyer for Musk, delivered the opening statement on Tuesday, arguing that OpenAI’s shift to a for-profit model directly contradicted the promises made to Musk and other early backers. “This case is about a promise broken,” Molo told the jury. “OpenAI was founded as a nonprofit to ensure artificial intelligence would benefit humanity, not enrich a select few. That promise was abandoned.”

The Core Dispute: Nonprofit vs. For-Profit

OpenAI was established in late 2015 with a mission statement that explicitly pledged to advance “digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.” Musk, who was a co-founder and early financial backer, left the company’s board in 2018 amid disagreements over its direction. Shortly afterward, OpenAI created a for-profit subsidiary, a move Musk’s legal team now characterizes as a breach of the company’s founding principles.

In court filings, Musk’s lawyers have demanded up to $134 billion in damages, though the exact legal basis for that figure has not been detailed in the trial’s early stages. OpenAI has dismissed the lawsuit as a “baseless harassment campaign,” arguing that Musk’s claims are motivated by sour grapes after his departure. In a post on X (formerly Twitter) on Monday, the company stated, “We can’t wait to make our case in court where both the truth and the law are on our side.”

Key Arguments and Courtroom Drama

Molo’s opening statement painted OpenAI’s transformation as a deliberate betrayal. He cited internal communications and board discussions from OpenAI’s early years, suggesting that Musk and other founders were repeatedly assured the company would remain a nonprofit. “Elon Musk didn’t just walk away from OpenAI—he was pushed out when he refused to go along with a plan to monetize the company’s technology,” Molo said. “This wasn’t a disagreement over strategy. It was a fundamental violation of trust.”

OpenAI’s attorney, William Savitt, countered by framing the lawsuit as an attempt by Musk to rewrite history. “Mr. Musk left OpenAI because he wanted control he wasn’t entitled to,” Savitt told the jury. “When he didn’t get his way, he decided to sue. This case is about one thing: Elon Musk’s ego.” Savitt argued that OpenAI’s for-profit arm was necessary to attract the capital required to compete in the rapidly evolving AI landscape, and that the company’s mission to benefit humanity remained intact.

The trial, presided over by U.S. District Judge Yvonne Gonzalez Rogers, is expected to feature testimony from Musk, Altman, and Brockman, as well as other key figures in OpenAI’s history. Musk’s legal team confirmed that he will be the first witness called to testify, setting the stage for a highly personal and contentious showdown.

Broader Implications for the AI Industry

The outcome of the trial could have far-reaching consequences for the AI sector, particularly as debates over the ethical development and commercialization of artificial intelligence intensify. OpenAI’s shift to a for-profit model has been emulated by other AI startups, many of which have attracted billions in investment from tech giants and venture capital firms. Musk’s lawsuit challenges the legitimacy of that model, arguing that it undermines the public-interest mission that once defined OpenAI.

Legal experts note that the case hinges on whether OpenAI’s original nonprofit structure was legally binding or merely aspirational. “This isn’t just about OpenAI—it’s about whether a company can change its fundamental structure without accountability,” said a corporate governance attorney familiar with the case, who spoke on condition of anonymity. “If Musk prevails, it could force other AI companies to reconsider their own hybrid models.”

For Musk, the trial is also an opportunity to position himself as a defender of AI ethics, a role that aligns with his public criticism of OpenAI’s partnership with Microsoft and his own AI ventures, including xAI, which he founded in 2023. In a 2023 interview with CNBC, Musk accused OpenAI of becoming a “closed-source, maximum-profit company effectively controlled by Microsoft,” a claim OpenAI has vehemently denied.

What Comes Next

The trial is expected to last several weeks, with testimony from Musk likely to dominate the early proceedings. His legal team has indicated that they will present evidence, including emails and internal documents, to support their claim that OpenAI’s leadership misled early supporters about the company’s long-term structure. OpenAI, meanwhile, is expected to argue that Musk’s departure in 2018 severed his legal standing to challenge the company’s decisions.

Regardless of the outcome, the trial has already laid bare the deep personal and professional rifts between Musk and Altman, two of the most influential figures in Silicon Valley. Court filings and pre-trial motions have revealed a history of acrimony, with Musk accusing Altman of prioritizing profit over principle and Altman dismissing Musk’s claims as a “distraction” from OpenAI’s work.

As the trial progresses, observers will be watching closely to see how the jury interprets the complex legal and ethical questions at the heart of the case. For now, the courtroom in Oakland remains the epicenter of a battle that could reshape the future of AI governance—and the legacy of its most prominent players.