Before Elon Musk left OpenAI in a power struggle in 2018, he wanted to merge the nonprofit artificial intelligence lab with Tesla, his electric car company.
Mr. Musk and other OpenAI co-founders have met several times to discuss the merger. OpenAI’s CEO, Sam Altman, was even offered a seat on Tesla’s board of directors, according to a court document.
But folding OpenAI into Tesla would remove the lab’s nonprofit status, something Mr. Altman said on the witness stand Tuesday he wanted to avoid.
The question of whether OpenAI would be nonprofit is a key point in a federal lawsuit in Oakland, Calif., that pits Mr. Musk against the AI organization he helped create. Another issue at the center of attention in court on Tuesday was the credibility of Mr. Altman, who was briefly forced out of his job three years ago because OpenAI’s board thought he was not always telling the truth.
Mr. Musk sued OpenAI and Mr. Altman in 2024, claiming it abandoned its founding agreement as a nonprofit group dedicated to building safe artificial intelligence for the benefit of humanity. Mr. Musk accused Mr. Altman of “stealing charity” by attaching a for-profit company to the original nonprofit OpenAI and taking billions of dollars in investment from Microsoft.
The debate over who will lead the development of artificial intelligence and whether Mr. Musk’s complaints about changing the nonprofit’s charter are bogus were also the subject of Mr. Altman’s two-hour testimony. Mr Altman said it was clear Mr Musk wanted to take full control of OpenAI and had repeatedly discussed turning it into a profitable company. A merger with Tesla was one of several options offered by Mr. Musk.
“I believed that AI should not be under the control of one person,” Mr. Altman said.
If OpenAI has had one consistent characteristic since its founding in 2015, it’s management drama as its corporate structure has changed over the years. Key executives and researchers left — including the founders of rival AI company Anthropic — amid personal disputes with Mr. Altman and others.
Mr. Altman testified about his dispute with Mr. Musk. He said he became concerned that Mr. Musk, who provided seed investment money for OpenAI, wanted to take control of the lab.
He described what he called a “particularly harrowing moment” when his OpenAI co-founders asked Mr. Musk what would happen to his control over potential profits when he died. Mr Altman said Mr Musk responded that control would pass to his children.
“I didn’t like it,” Mr. Altman said. When Mr. Musk lost a power struggle for control of the lab, he left, forcing Mr. Altman to find another big financial backer in Microsoft.
But Mr. Altman ran into trouble in 2023 when OpenAI’s board fired him because, several of its members testified at trial, they didn’t trust him.
Steven Molo, Mr. Musk’s lead lawyer, took aim at Mr. Altman’s credibility during aggressive cross-examination.
“Are you completely trustworthy?” Mr. Molo asked.
“I believe so,” Mr. Altman replied.
After nearly 20 minutes of questioning Mr. Altman’s credibility, Mr. Molo turned to Mr. Altman’s relationship with Mr. Musk.
Mr. Altman said that after he met Mr. Musk in mid-2010, Mr. Musk occasionally expressed concern about the dangers of AI, but Mr. Musk spent much more time worrying that companies like Google would be ahead of the curve in AI development, Mr. Altman said. (Mr. Musk testified at trial that he wanted to create OpenAI to prevent Google from controlling the technology.)
Mr. Altman, the lawyer said, took advantage of Mr. Musk’s fears and was never honest about his own concerns about AI.
“Are you a person who just tells people the things they want to hear, whether those things are true or not?” Mr. Molo asked.
The lawyer also questioned whether Mr. Altman, who became a billionaire through years of technology investments, was dealing through OpenAI himself. Mr. Molo showed a list of Mr. Altman’s personal investments in a number of companies that benefit from their association with OpenAI. These included Helion Energy, a start-up that has agreements with Microsoft and OpenAI, and Cerebras, a chip maker doing business with OpenAI.
Mr. Molo asked whether Mr. Altman, who is on OpenAI’s board and CEO, would ever fire himself.
“I don’t plan to,” Mr. Altman said.
OpenAI’s strange journey from a nonprofit lab to what it is today — a well-funded, for-profit company that is still linked to a nonprofit called the OpenAI Foundation with an endowment that could be worth more than $130 billion — prompted Mr. Mol’s questions about Mr. Altman’s motivations.
He suggested that Mr. Altman could have continued to build OpenAI as a purely non-profit organization. But the only way to build such a worthy charity was to raise billions through a for-profit venture, Mr. Altman replied. Still, the huge sums being collected seemed to upset Mr Musk.
In late 2022, according to court documents, Mr. Musk sent Mr. Altman a text complaining that Microsoft was about to invest $10 billion in OpenAI. “This is a bait and switch,” Mr. Musk said at the time.
But Mr. Altman, when asked by his own lawyers, said: “Every step of the way, I tried to maximize the value of the nonprofit. I would like to emphasize that there are not many historical examples of a nonprofit on this scale.”
Mr Musk is seeking $150 billion in damages and an injunction that would break up the profitable company OpenAI created last year, which is now valued at $730 billion. He also wants the court to remove Mr. Altman from OpenAI’s board.
Before Mr. Altman took the stand, Bret Taylor, the board’s chairman, continued testimony that had begun Monday. He discussed Mr. Musk’s bid to buy OpenAI’s assets in 2024, which became a contentious issue during the lawsuit.
Mr. Taylor said he was surprised by the offer because it appeared to contradict the goals of Mr. Musk’s lawsuit. He said the board rejected the offer because it was inconsistent with OpenAI’s mission.
“We didn’t feel it was appropriate to have one person directing our mission,” he said.
(The New York Times has sued OpenAI and Microsoft, alleging copyright infringement of news content related to AI systems. Both companies have denied the suit’s claims.)
