Nine California jurors are now deliberating over the future of OpenAI, the worldaaaa-leading artificial intelligence lab, in a trial that has laid bare the bitter ideological and financial split between its co-founders. While the proceedings have spanned the founders’ 2018 breakup to Sam Altman’s 2023 ouster and reinstatement, the jury is tasked with answering a surprisingly narrow set of legal questions. At stake is nothing less than the corporate structure of the most prominent AI company on the planet, with a verdict for Elon Musk potentially spelling the end of OpenAI’s for-profit arm.
The Core Questions Before the Jury
The case, brought by Elon Musk against OpenAI, its co-founders Sam Altman and Greg Brockman, and major partner Microsoft, has been distilled into three primary claims. The jury must decide first on a breach of charitable trust: did OpenAI and its leadership violate a specific agreement with Musk to use his donations exclusively for a designated charitable purpose, rather than for the general operations of the non-profit? The second question concerns unjust enrichment: did the defendants use Musk’s contributions to enrich themselves personally through OpenAI’s for-profit subsidiary, instead of advancing the charitable mission? Finally, the jury will consider whether Microsoft aided and abetted a breach of trust, asking if the tech giant knew about specific conditions attached to Musk’s donations and played a significant role in causing him harm.
OpenAI has mounted a robust defense built on three legal pillars. The first is the statute of limitations, arguing that any alleged harm to Musk occurred before specific dates—August 5, 2021, for the breach of trust claim, and August 5, 2022, for unjust enrichment—making his 2024 lawsuit untimely. The second defense is unreasonable delay, contending that Musk waited too long to file his suit, making his demand for damages inequitable. The third is the doctrine of unclean hands, asserting that Musk’s own conduct related to the dispute was so unconscionable that it invalidates his claims entirely.
The Heart of the Dispute: Breach of Charitable Trust
Musk’s legal team contends that the defendants clearly understood his intent in making early donations to OpenAI: to support a non-profit that would ensure the benefits of artificial intelligence were distributed broadly and prevent any single entity from controlling the technology. They point to the 2023 Microsoft investment of $10 billion into OpenAI’s for-profit affiliate as the pivotal event that transformed Musk’s growing unease into legal action. This deal, they argue, was fundamentally different from earlier investments, enriching investors at the expense of the AI safety mission Musk had championed.
OpenAI’s attorneys have countered by calling every relevant witness to describe specific restrictions on Musk’s donations, and none have been able to do so—including Musk’s own financial adviser Jared Birchall, his chief of staff Sam Teller, and his special adviser Shivon Zilis. The defense maintains that all parties agreed private fundraising was necessary to achieve OpenAI’s ambitious goals. They further point out that Musk himself attempted to launch a for-profit affiliate under his personal control and later tried to merge OpenAI into Tesla. A forensic accountant hired by OpenAI testified that all of Musk’s donations had been spent by the organization well before the key date of August 5, 2021, suggesting any charitable trust had already been fulfilled. OpenAI insists its for-profit arm continues to advance the mission, generating nearly $200 billion in equity value to support the non-profit foundation, with Sam Altman himself arguing that providing ChatGPT for free is a fulfillment of the goal to share AI’s benefits with the world.
Unjust Enrichment and the Value of Equity
The plaintiffs argue that the immense valuations of stakes held by founders like Greg Brockman and Ilya Sutskever, as well as Microsoft, are proof that Musk’s donations were steered toward personal gain. They characterize the for-profit arm as purely commercial, leaving the non-profit foundation dormant, without full-time employees, and effectively not in control of the entity that bears its name.
OpenAI’s response is that all of Musk’s donations were used by the foundation by 2020, and that any equity distributions occurred well after his departure from the organization in 2018. Even before his exit, the record shows that all key players agreed that compensating researchers with stock was essential to developing AGI. OpenAI executives maintain that the for-profit’s work has meaningfully advanced the foundation’s mission, including critical safety research. They note that the non-profit board continues to control the for-profit and implemented new governance controls after Altman was briefly fired in 2023.
Microsoft’s Role and the ‘Blip’
Musk’s case has zeroed in on the chaotic events of November 2023, when Microsoft CEO Satya Nadella was personally involved in orchestrating Altman’s return and reshaping OpenAI’s board. The plaintiffs highlight internal discussions where Microsoft executives wondered if their commercial agreement might conflict with the non-profit’s goals, and they have focused on a clause in the contract that gave Microsoft veto power over major corporate decisions.
Microsoft’s witnesses have consistently denied any knowledge of specific conditions on Musk’s donations, despite extensive due diligence. They insist the company has never vetoed any OpenAI decision and argue that Microsoft’s investments and computing resources were instrumental in OpenAI’s greatest achievements, making the suggestion of wrongdoing unfounded.
The Defense’s Procedural and Ethical Challenges
A significant portion of the trial has been consumed by OpenAI’s procedural defenses. On the statute of limitations, Musk has argued that his suspicion of his co-founders grew gradually, only crystallizing into a belief of betrayal in the fall of 2022 when he learned of the terms of the new Microsoft investment. He did not file his lawsuit until 2024. OpenAI’s attorneys have presented evidence that the terms of that deal were outlined in a term sheet from a 2018 fundraising round that Musk received and his advisers reviewed, though Musk claims he did not read it in detail. They have also pointed to years of blog posts and Musk’s own critical tweets about OpenAI, arguing he had ample notice of the company’s direction. Notably, Shivon Zilis, Musk’s own adviser, voted to approve these transactions while she was a member of the OpenAI board.
The defense of unreasonable delay is more pointed: OpenAI’s lawyers argue that Musk filed suit not because he was wronged, but because he realized he had been wrong about the company after ChatGPT’s explosive success. They maintain that forcing OpenAI to restructure now, eight years after its current operational model was established, is fundamentally unreasonable.
Perhaps the most personal defense is that of unclean hands. OpenAI has presented evidence that Musk was planning his own competing AI efforts while he was still chairman of OpenAI and that he poached employees to work on AI at Tesla. They have noted that Zilis, who is the mother of three of Musk’s children, did not disclose her personal relationship to other board members for years. They also allege that Musk withheld promised donations in 2017 in an attempt to gain control of the planned for-profit entity. “Mr. Musk abandoned OpenAI for dead in 2018,” Bill Savitt, OpenAI’s lead attorney, told the jury in closing arguments.
What a Verdict Could Mean
The immediate consequences of a Musk victory are not entirely clear. The judge has scheduled a new set of hearings for next week to debate the potential remedies, a process that would be rendered moot if the jury delivers a negative verdict for the plaintiffs. While a win for Musk could theoretically dismantle OpenAI as a for-profit entity, the exact shape of that outcome remains a subject of intense legal speculation. For now, the future of one of the world’s most influential technology companies rests in the hands of nine Californians.
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