Musk v. Altman: OpenAI For-Profit Conversion Trial Underway in California

Elon Musk's court case against Sam Altman continued on Thursday, after a day of contentious exchanges during OpenAI's cross-examination of the Tesla CEO. Musk faced more combative questioning throughout the morning, in a glimpse of what may await other prominent witnesses set to take the stand. Witness testimony and evidence has revealed formerly private emails, text messages and diary entries surrounding the formation of OpenAI, giving a behind-the-scenes look at how the tech behemoth was created. Many of the tech industry's most powerful players are named as witnesses and will give their accounts on the origins of Musk and Altman's bitter feud. Altman will testify later in the trial, which will last three weeks. Musk, who co-founded OpenAI in 2015, is arguing that Altman, OpenAI and its president Greg Brockman broke a foundational agreement when they shifted the company from a non-profit intent on bettering humanity into a for-profit structure. Musk claims that Altman and Brockman unjustly enriched themselves and should be removed from the company. He is also seeking the undoing of the for-profit conversion and $134bn in damages to be redirected to OpenAI's non-profit arm. OpenAI rejects Musk's allegations and is attempting to show that Musk was always aware of plans for creating a for-profit entity. The AI firm's attorneys have stated Musk is "motivated by jealousy" of OpenAI's success after he left the company in 2018 after a failed attempt to take control. OpenAI has emphasized that it is still overseen by a non-profit. OpenAI's lead attorney, William Savitt, grilled Musk again on Wednesday as the Tesla CEO bristled at his questions. As with the previous round of cross-examination, Savitt engaged in rapid-fire questioning about what Musk knew about OpenAI's structure and forming a for-profit branch. In response to many of the questions, Musk took a defensive tone and repeated his go-to phrase in the trial that "you can't just steal a charity". At one point, Judge Yvonne Gonzalez Rogers moved to strike Musk's charity statement from the record, saying: "That portion is stricken, we've heard it many times." On Thursday, Savitt asked Musk several questions about the AI company he founded in 2023, xAI, and why he didn't set it up as a non-profit. Musk, visibly rattled after Savitt kept cutting him off if he responded at length, loudly said in a stern voice: "I started OpenAI as a non-profit." He went on to explain that OpenAI converted into a for-profit only in the last few years. "That is the entire basis for this whole lawsuit," Musk said. "Why would I start another non-profit when I already started a non-profit?" Musk's lawyer, Steven Molo, redirected questions to his client after Savitt was done. Molo asked Musk to reaffirm a point the billionaire had made earlier: that he was fine with OpenAI operating a for-profit entity, as long as it was in support of the non-profit. Molo then turned his questioning to Musk's desire to create an AI army of robots and why he thinks this is necessary, something that came up in testimony the day before. "The worst-case situation is where it is a terminator situation," Musk said, "where AI will kill us all." Gonzalez Rogers cut in, saying it was time for the court to take a break. After the jury left the room, she spoke directly to Musk and his lawyers, telling them: "We are not going to talk much about extinction in this case. They got it, that's enough." After Musk's testimony wrapped, his longtime top lieutenant, Jared Birchall, took the stand. Birchall, who is CEO of Neuralink and runs Musk's family office, said he started working for the billionaire in 2016 and got the job through a mutual acquaintance. He stated that he oversees Musk's assets and resources. Birchall testified that he was in charge of sending Musk's donations to OpenAI, but that all decision-making regarding those donations was done by Musk. He said he sent approximately 60 contributions, amounting to roughly $38m, to OpenAI from Musk from 2016 to 2020. The trial, which began on Monday with jury selection at a federal courthouse in Oakland, California, has already produced dramatic moments and bold accusations. Musk and Savitt spent most of Wednesday in a heated back-and-forth, with the world's richest person becoming noticeably frustrated and saying that Savitt's questions "are designed to trick me". After court wrapped on Wednesday and the lawyers conferenced with the judge, Savitt groused about Musk being a difficult witness since he repeatedly refused to answer questions in a yes-and-no manner. Gonzalez Rogers essentially told him to deal with it, saying that comes with litigation. Silicon Valley is intently watching the trial for both its blockbuster testimony and the potential effects it will have on the AI industry. OpenAI is intending to go public later this year at around a $1tn valuation, but if Musk succeeds in this case, it could greatly complicate that effort – an outcome that would also benefit Musk's own xAI artificial intelligence firm. The nine-person jury will decide whether OpenAI is liable, but Judge Gonzalez Rogers will determine what, if any, remedies are necessary in the case.