Musk vs OpenAI verdict looms in $150 billion trust case

Deliberations are set to begin in Elon Musk’s lawsuit against OpenAI and its leaders, a case that could force the unwinding of the $852 billion firm’s for-profit structure and carries up to $150 billion in potential damages.

"Mr. Musk isn't here today," OpenAI's lead counsel, William Savitt, said during closing arguments, highlighting the plaintiff's absence. "My clients are here. They're here because they care about this."

Musk alleges a breach of charitable trust, claiming his initial $38 million in donations were for a nonprofit, not the for-profit entity that later accepted a $10 billion investment from Microsoft. OpenAI’s lawyers argue Musk’s claims are “sour grapes” and that his donations were spent by 2020, before the statute of limitations cutoff of August 2021.

The jury's verdict is advisory, leaving the final decision to Judge Yvonne Gonzalez Rogers. A ruling for Musk could trigger the removal of CEO Sam Altman, unwind OpenAI’s corporate structure ahead of a planned IPO, and redirect billions to its original nonprofit foundation, setting a major precedent for AI governance.

Altman's Credibility Under Fire

Throughout the three-week trial, lawyers for Musk zeroed in on the trustworthiness of Sam Altman. Musk’s attorney, Steven Molo, argued that Altman’s credibility was "directly at issue" and that if the jury doesn't trust him, "they cannot win." Molo pointed to Altman’s evasive answers during cross-examination and his November 2023 ouster by the former board for not being "consistently candid."

Altman, for his part, testified that Musk’s departure from the board in 2018 was a "morale boost" for employees and that Musk had tried to kill the company he co-founded. He alleged Musk engaged in "business interference" and only filed the suit out of jealousy after the success of ChatGPT. The defense painted Musk as a co-founder who abandoned the project and only returned to sue when it became a revolutionary success.

The trial surfaced numerous internal communications that added color to the competing narratives. Personal diary entries from OpenAI President Greg Brockman showed him aspiring to a billion-dollar valuation in 2017, while text messages from CTO Mira Murati revealed her concerns over Altman’s decision-making during his chaotic 2023 firing and rehiring.

The Microsoft Question

A central thread of the case is the role of Microsoft, which invested $10 billion in OpenAI in 2023, a move Musk’s lawyers claim sealed the betrayal of the nonprofit’s original mission. Musk has accused Microsoft of "aiding and abetting" the breach of charitable trust.

Microsoft CEO Satya Nadella testified that his company’s investment was a genuine risk and that he was not involved in the decision to reinstate Altman after his brief firing. However, internal Microsoft emails revealed skepticism about OpenAI's capabilities and a desire not to become the "IBM" to OpenAI's "Microsoft," a reference to the deal that let Microsoft dominate the PC era.

OpenAI’s lawyers repeatedly used Musk’s own words against him, pointing to a 2020 tweet where he stated "OpenAI is essentially captured by Microsoft." They argued that if Musk believed the company's charitable trust was breached then, he waited too long to file a lawsuit, placing him outside the three-year statute of limitations. This question of timing may ultimately be the deciding factor for Judge Rogers, regardless of the jury's advisory verdict.

This article is for informational purposes only and does not constitute investment advice.