Musk testifies in OpenAI lawsuit over nonprofit structure

Elon Musk appeared in a California federal court on Wednesday to testify in his lawsuit against OpenAI. During his testimony, Musk admitted under oath that Tesla is not currently pursuing artificial general intelligence (AGI)—defined as AI systems that can perform any intellectual task a human can. The admission directly contradicted his own recent social media posts on X, where he had asserted that Tesla would be one of the companies to make AGI. On the stand, Musk stated that Tesla is not pursuing AGI right now.

The legal battle centers on Musk’s allegations against OpenAI co-founder Sam Altman and other co-founders. Musk, the plaintiff in the lawsuit, alleged that Sam Altman and his co-founders “stole a charity” by transitioning the organization from a nonprofit to a commercial, for-profit model. Musk, who co-founded the AI research lab, claimed that he trusted the founders to build AI for the benefit of humanity but later concluded they were looting the nonprofit. He argues that OpenAI’s transition to a traditional corporation reduces the company’s focus on safety.

During cross-examination, William Savitt, a lawyer for OpenAI, challenged Musk’s narrative by highlighting discrepancies in his financial contributions and past actions. While Musk previously claimed to have invested $100 million in OpenAI, Savitt pointed out that Musk actually invested $38 million before he stopped paying for OpenAI’s office space in 2020. Savitt also presented evidence showing that Musk himself had explored transitioning OpenAI to a for-profit structure. Musk admitted he discussed converting the company to a for-profit as early as 2016, and in 2017 explored creating a for-profit arm where he would hold majority equity and control. In addition, Savitt probed Musk’s past efforts to integrate OpenAI with Tesla and his communications with Shivon Zilis—Musk’s adviser, former OpenAI board member, and the mother of four of his children—regarding fundraising efforts. Musk left the OpenAI board in 2018.

The case, presided over by US District Judge Yvonne Gonzalez Rogers, appears to depend on the legal distinction between capped and uncapped profit structures for investors. Musk argued that early Microsoft investments had capped profits, whereas subsequent changes rolled back those restrictions. While the judge allowed questioning regarding safety approaches, she limited testimony on external controversies. Specifically, she restricted details concerning ChatGPT’s role in a shooting incident in Tumbler Ridge, Canada, where an individual went on a killing spree after conversations with the chatbot, ruling that she did not want the trial to focus on external model scandals.

Why it matters

The lawsuit challenges the fundamental structure of OpenAI, with Musk arguing that the transition from a nonprofit to a for-profit model compromises safety and was built on deception.