Jury selection opened Monday in Oakland for what may be the defining legal battle over artificial intelligence: Elon Musk versus Sam Altman, with OpenAI's corporate structure and its $852 billion valuation on the line.
Musk's August 2024 lawsuit alleges Altman and co-founder Greg Brockman betrayed OpenAI's founding mission when they converted it from a nonprofit research lab into a for-profit business. The case, before U.S.
District Judge Yvonne Gonzalez Rogers, centers on whether that transformation was legal -- or whether Musk was duped out of his vision for safe AI development.
Musk invested roughly $38 million in OpenAI between December 2015 and May 2017 and was its primary early funder. He left the board in 2018. By 2019, OpenAI had created a for-profit subsidiary. By late 2022, ChatGPT turned Altman into a household name and OpenAI into a company now worth $852 billion with nearly 1 billion weekly active users.
OpenAI recently closed a $122 billion funding round and is reportedly planning an initial public offering later this year.
Musk initially sought more than $100 billion in damages but dropped that claim after pre-trial rulings went against him. He now asks the court to force OpenAI to disgorge profits from its for-profit operations to its charitable arm -- effectively clawing back billions from Altman and other executives.
His legal filings also seek to "unwind the for-profit conversion" and restore OpenAI as a public charity, along with removing Altman from both the for-profit leadership and nonprofit board.
OpenAI calls the lawsuit sour grapes designed to hobble a competitor while boosting Musk's own AI startup, xAI, which he launched in 2023.
"The perfidy and deceit are of Shakespearean proportions," Musk's lawyers wrote in one filing, accusing Altman of running a "long con." The trial carries serious risk for both men. Musk was held liable last month by another jury for defrauding investors during his $44 billion Twitter takeover -- bad timing given SpaceX plans to go public this summer in an IPO that could make him the world's first trillionaire.
Altman faces his own scrutiny: earlier this month, The New Yorker published a profile painting him as an unscrupulous executive, and days later a man was arrested on attempted murder charges after throwing a Molotov cocktail at Altman's San Francisco home over AI fears.
Key witnesses could include Shivon Zilis, a former OpenAI board member who is also the mother of four of Musk's children. The judge ruled Musk can be questioned about his relationship with Zilis but not about his alleged ketamine use.
"Part of this is about whether a jury believes the people who will testify and whether they are credible," Gonzalez Rogers said at an earlier hearing, explaining why she believed the case warranted trial. The jury serves an advisory role; she will make the final decision. A February 2023 email exchange between the two men captures how personal this fight has become. "I am tremendously thankful for everything you've done to help -- I don't think OpenAI would have happened without you -- and it really hurts when you publicly attack OpenAI," Altman wrote to Musk.
Musk replied: "I hear you and it is certainly not my intention to be hurtful, for which I apologize, but the fate of civilization is at stake."
Opening arguments are expected Tuesday.
