Elon Musk testifies he was a 'fool' to fund OpenAI in trial over for-profit shift

The high-stakes trial between Elon Musk and OpenAI CEO Sam Altman is underway in federal court in Oakland, California, with Musk testifying that he was a "fool" for initially funding the company after receiving assurances it would remain a nonprofit dedicated to humanity's benefit. Musk, who co-founded OpenAI in 2015 and contributed $38 million through 2017, alleges that Altman and President Greg Brockman betrayed the founding agreement by shifting to a for-profit model, prioritizing profits over public good. As reported by CBS News, Musk described his evolving views on Altman in three phases: initial excitement, growing doubts, and a sense of betrayal by late 2022, which led him to halt funding and spark this bitter fallout.

The lawsuit, filed in the U.S. District Court for the Northern District of California, began with opening statements on Tuesday and is expected to last about four weeks, featuring emails, texts, tweets, photos, and early corporate documents from OpenAI's pre-named days. According to The Verge, these exhibits are being revealed piece by piece, offering glimpses into the AI lab's origins. Musk's attorney, Steven Molo, dramatically accused Altman of "stealing a charity" to build a profit-driven empire, as detailed by Fox Business, transforming OpenAI from a mission-driven nonprofit into a "profit-seeking juggernaut" now valued at over $85 billion—and reportedly as high as $850 billion by some accounts.

OpenAI's lawyers firmly reject these claims, arguing that leaders never promised the organization would stay nonprofit forever and that Musk knew of and supported the 2019 shift to a for-profit structure. They portray Musk's suit as motivated by jealousy over OpenAI's explosive growth and his own failed bid to become CEO, followed by launching rival xAI in 2023, according to both CBS News and Fox Business coverage. TechCrunch notes the proceedings are already messy, with Musk spending three days on the witness stand and more witnesses, including potentially Altman, still to come.

Musk seeks $150 billion in damages from OpenAI and major backer Microsoft, with proceeds directed to OpenAI's charitable arm, alongside demands to revert the company to nonprofit status, remove Altman and Brockman from leadership, and potentially oust Altman from the board entirely. A victory for Musk could derail OpenAI's plans for an initial public offering and reshape the AI landscape, affecting investors, employees, and the broader tech industry racing to dominate generative AI like ChatGPT.

This clash underscores tensions in AI development between open, humanitarian ideals and commercial pressures, with protesters gathering outside the courthouse amid Musk's recent X posts labeling Altman "Scam Altman," as noted by the judge. As evidence mounts and testimony continues, the case highlights how early promises in fast-evolving tech can fuel prolonged legal battles, impacting who controls one of the world's most valuable AI players.