In May 2015, Sam Altman sent an email to Elon Musk proposing a “Manhattan Project for AI.” He envisioned a research lab in Silicon Valley that would create immensely powerful artificial intelligence and share it with the rest of the world “through some non-profit organization.”
Mr Musk responded that evening, saying the idea was “probably worth talking about”. Before the end of the year, two tech entrepreneurs founded a non-profit organization called OpenAI, which would launch a global artificial intelligence boom with the launch of ChatGPT.
But by the time the OpenAI chatbot was created, Mr. Musk had left the organization after a power struggle with Mr. Altman and others at the lab. In 2024, he sued OpenAI, alleging that Mr. Altman had taken advantage of its financial resources and breached the agreement establishing the lab by prioritizing commercial interests over the public good.
On Monday, jury selection is expected to begin at a federal courthouse in Oakland, California, to decide whether Mr. Musk was really Sam Altman’s deep-pocketed con artist. The case highlights many of the personal squabbles and esoteric arguments that have guided the development of AI. Mr. Musk, Mr. Altman and several other key industry figures are scheduled to testify in the trial, which is expected to last several weeks, including Microsoft CEO Satya Nadella and Mira Murati, OpenAI’s former chief technology officer.
Mr. Musk is seeking more than $150 billion in damages from OpenAI and Microsoft, OpenAI’s main partner. It also asks the court to remove Mr. Altman from OpenAI’s board and reveal the shift the company has recently made to operate as a for-profit company.
The result of the trial could turn the AI race in the tech industry. OpenAI, which has become one of the most important technology companies in the world, could be crippled as it appears headed for one of the biggest initial public offerings in history. A win for Mr. Musk would also be a win for OpenAI’s competitors, from industry giants like Google to young companies like Anthropic, as well as international competitors like China’s DeepSeek.
But if Mr. Musk loses, Mr. Altman will continue to consolidate control over a company that has become synonymous with corporate dysfunction. And OpenAI, which has expanded to more than 4,000 employees working in offices around the world, will be able to execute a data center expansion plan that could cost hundreds of billions of dollars.
“This is just one front in the endless billionaire battle for funding, government support and ultimately AI supremacy,” said Oren Etzioni, a veteran AI researcher who co-founded the Allen Institute for AI and startup Vercept.
In his lawsuit, Mr. Musk alleges that OpenAI — now worth an estimated $730 billion as a for-profit company overseen by the original nonprofit — has abandoned its humanitarian mission in favor of monetary gain. OpenAI says this is nonsense.
Mr. Musk also tried to reshape OpenAI into a commercial venture before he left in 2018, according to emails filed as evidence in court. And once the AI boom came, he created his own profitable xAI lab. That’s now part of rocket company Space X, which is expected to go public as early as this summer, in an offering worth up to $1.75 trillion.
The dispute between Mr. Musk, 54, and Mr. Altman, 41, is typical of splits at AI companies over the years. Top researchers have met several times with plans to build powerful artificial intelligence before arguing over the best way to do it, breaking up and starting new companies.
“We don’t usually see Silicon Valley companies engaging in scorched-earth tactics in the courts, but Elon is unique,” said Anupam Chander, a professor of law and technology at Georgetown Law School. “When you get sued by the richest man in the world, you’re going to worry about the suit, even if you feel like you’re in the right.”
A nine-person jury will decide Mr. Musk’s claims against OpenAI. If the jury finds in his favor, Judge Yvonne Gonzalez Rogers — who oversaw Epic Games’ lawsuit against Apple over its control of the iPhone App Store — will decide on damages and other remedies.
Silicon Valley insiders expect high drama in an Oakland courtroom.
Shivon Zilis, a former OpenAI board member and the mother of Mr. Musk’s four children, is on the witness list. So did Helen Toner, Tasha McCauley and Ilya Sutskever, the three OpenAI board members who unexpectedly fired Mr. Altman in late 2023 before he fought his way back into the organization five days later. They ousted Mr. Altman because they also didn’t trust him to build AI for the benefit of humanity.
Ms Murati, who helped Mr Altman regain his position at OpenAI but was later revealed to have been a key part of his dismissal, is also expected to testify. Shortly before Mr. Altman’s ouster, she asked the board questions about his leadership, people familiar with the board’s proceedings 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.)
When Mr. Musk founded OpenAI with Mr. Altman and several young AI researchers, he saw the research lab as a necessary counterweight to the AI work going on at Google. He believed that Google and Larry Page, one of its founders, did not understand the dangers of AI
When OpenAI’s founders created it as a nonprofit — largely supported by donations from Mr. Musk — they promised to share its technology freely with the public as open-source software. They argued that artificial intelligence would be too powerful and too dangerous for a single company to control.
However, in late 2017, many inside OpenAI argued that open source could be more dangerous than keeping the technology closed. And they worried that if the lab remained nonprofit, it wouldn’t be able to raise the money it would need to achieve its lofty goal of building artificial general intelligence, or AGI, a machine that can do everything a human brain can do.
That included Mr. Musk. In February 2018, he forwarded an email to the lab’s other founders proposing that OpenAI join Tesla, his electric car company, and build its AI using the supercomputers Tesla was developing.
“Tesla is the only way that could even hope to hold a candle to Google,” he wrote. “Even so, the odds of you being a counterweight to Google are slim. It’s just not zero.”
After Mr. Altman and others refused to give Mr. Musk control, he quit. Later that month, he announced his departure to OpenAI staff on the top floor of the lab’s San Francisco office. He withdrew his financial support for the lab.
Forced to seek other sources of funding, Mr. Altman bolted the original non-profit into a for-profit company and eventually raised $13 billion from Microsoft. The lab has also scaled back its efforts to open source its technologies.
Mr. Musk claims in his suit that Mr. Altman and Greg Brockman, president and co-founder of OpenAI, deliberately manipulated and deceived him, falsely promising to chart a safer path to AI than profit-driven tech giants like Google and Microsoft. They tricked him, the lawsuit alleges, into donating tens of millions of dollars to the nonprofit OpenAI.
The lawsuit demands that OpenAI pay $10 billion in damages. In a recent filing, Mr. Musk amended his complaint to ask that those damages go to the nonprofit OpenAI rather than to him.
“He’s asking the court to restore everything that was taken from public charity — and to make sure that the people responsible can never do it again,” Marc Toberoff, Mr. Musk’s lawyer, said in a statement.
OpenAI claims that Mr. Musk is only trying to cripple OpenAI as he deploys his own AI efforts.
Documents released in the case appear to show that in 2017 Jared Birchall, head of Mr Musk’s family office, registered a company called Open Artificial Intelligence Technologies, which was to be a for-profit incarnation of OpenAI.
“His own words and actions speak for themselves,” OpenAI said in a court filing. “Elon not only wanted, but actually made a profit as OpenAI proposed the new structure.”
