Inside the Musk vs. OpenAI Trial: Key Revelations from Week One

The first week of the landmark trial between Elon Musk and OpenAI unfolded in a packed federal courtroom in Oakland, California, with lawyers, journalists, and concerned employees looking on. Outside, protesters chanted against ChatGPT and Tesla. Musk, dressed in a crisp black suit, offered a mix of quips and remorse as he testified, warning that artificial intelligence could destroy humanity. He also made surprising admissions about his own AI company, xAI. The trial centers on Musk's claim that he was tricked into funding a nonprofit that later became a massive for-profit venture. Below are the most important moments from the week, broken down into key questions and answers.

1. Why does Elon Musk say he was duped by Sam Altman and Greg Brockman?

Musk testified that when he co-founded OpenAI in 2015, he did so with the understanding that it would be a nonprofit dedicated to developing artificial intelligence for the benefit of humanity—not to enrich its executives. He told the jury, “I was a fool who provided them free funding to create a startup.” According to Musk, he donated roughly $38 million in what he considered “essentially free funding,” which OpenAI then used to build a company now valued at around $800 billion. He claims Altman and Brockman misled him about their intentions, and that the subsequent restructuring to allow a for-profit subsidiary betrayed the original mission. Musk is now asking the court to remove Altman and Brockman from their roles and to unwind that restructuring.

2. What did Musk warn about the dangers of artificial intelligence?

During his testimony, Musk painted himself as a long-time advocate for AI safety. He recounted a conversation with Google co-founder Larry Page, in which Musk asked what would happen if AI tried to wipe out humanity. According to Musk, Page replied, “That will be fine as long as artificial intelligence survives.” Musk told the jury bluntly: “The worst-case scenario is a Terminator situation where AI kills us all.” He emphasized that he co-founded OpenAI as a counterbalance to Google, which was leading the AI race at the time. The warning served to underscore his argument that OpenAI must return to its original nonprofit structure to ensure safe development of AI, free from profit motives that could prioritize speed over safety.

3. Did Musk admit to using OpenAI’s technology at his own company, xAI?

Yes, in a moment that drew audible gasps in the courtroom, Musk confessed that his AI company, xAI—which creates the chatbot Grok—uses OpenAI’s models to train its own. This admission was particularly striking because Musk is suing OpenAI for allegedly abandoning its nonprofit mission. The revelation suggests that even as Musk accuses OpenAI of straying from its original goals, his own company benefits from the very technology OpenAI developed. This point was highlighted by OpenAI’s lawyer during cross-examination, who argued that Musk’s lawsuit is not about altruism but about undermining a competitor. The disclosure also raises questions about intellectual property and fair use in the rapidly advancing field of generative AI.

4. What is the central legal argument in Musk’s lawsuit against OpenAI?

Musk is asking the court to force OpenAI to return to its original nonprofit structure. He argues that the company’s 2019 reorganization—which created a for-profit subsidiary—violated the founding agreement and the mission to develop AI safely for all humanity. Specifically, Musk wants Altman and Brockman removed from their leadership positions and the for-profit arm unwound. He claims that without these changes, OpenAI’s pursuit of profit will inevitably lead to reckless development of artificial general intelligence (AGI), posing a threat to society. The outcome of this case could have enormous consequences, potentially upending OpenAI’s race toward an initial public offering (IPO) at a valuation approaching $1 trillion.

5. How did OpenAI’s lawyer, William Savitt, counter Musk’s claims in court?

OpenAI’s attorney, William Savitt, who once represented Musk and Tesla, delivered a sharp cross-examination aimed at undermining Musk’s credibility. Savitt argued that Musk was “never committed to OpenAI being a nonprofit” and that his lawsuit was a strategic move to weaken a competitor. Savitt pointed out that Musk had poached OpenAI employees for his own companies and had even admitted to using OpenAI’s models at xAI. The lawyer also suggested that Musk’s portrayal of himself as a “paladin of safety and regulation” was inconsistent with his track record. Savitt attempted to show the jury that Musk’s real motive was business competition, not altruistic concern for AI safety, which could sway the outcome of the trial.

6. What financial stakes are involved for both OpenAI and xAI in this trial?

The financial implications of the lawsuit are enormous. OpenAI is reportedly working toward an IPO at a valuation that could approach $1 trillion. If Musk succeeds in unwinding the for-profit subsidiary, that IPO could be delayed or even cancelled. Meanwhile, Musk’s own AI company, xAI, is expected to go public as part of his rocket company SpaceX as early as June, with a target valuation of $1.75 trillion. The trial’s outcome could reshape the competitive landscape of the AI industry, affecting investors, employees, and the broader tech ecosystem. Both companies have armies of lawyers and considerable resources at stake, making this one of the most closely watched business trials in recent history.

7. What did Musk say was the original purpose of OpenAI?

Musk testified that he co-founded OpenAI to create a “counterbalance to Google,” which was dominating AI research at the time. He believed that a nonprofit organization, free from profit pressures, could develop safe, beneficial AI for all of humanity. Musk said he was particularly concerned that Google, under Larry Page, would prioritize advancing AI capabilities without adequate safety precautions. By establishing OpenAI as a nonprofit, Musk hoped to ensure that the development of artificial general intelligence would be transparent, ethical, and aligned with human well-being. He argued that the subsequent shift to a for-profit model betrayed that original vision and put humanity at greater risk.