Elon Musk vs. OpenAI: Inside the courthouse as Microsoft’s $13 billion bet goes on trial

OAKLAND — Did Microsoft knowingly help OpenAI abandon its nonprofit mission?

That question sits at the center of a trial starting here this week, pitting the world’s richest man against the AI nonprofit he helped found and the tech giant that bankrolled its transformation.

It’s being called the “AI Trial of the Century,” with Elon Musk and Sam Altman in starring roles, and a supporting cast that includes Microsoft CEO Satya Nadella, CTO Kevin Scott and CFO Amy Hood. Current and former OpenAI execs and board members are also on the witness list.

Monday morning in Oakland, Altman and OpenAI President Greg Brockman were on hand for jury selection, with the OpenAI CEO sitting in the front row behind the lawyers’ tables in a dark suit and light blue tie, quietly scrolling on his phone as he waited for the process to begin.

Musk was not present for jury selection. He is expected to take the stand later in the trial. 

A protest was scheduled for midday outside the courthouse, organized by the Tesla Takedown activist group under the banner “Whoever Wins, We Lose” — arguing that a billionaire power struggle over AI’s future has little to do with ordinary people.

Jury selection: Inside, U.S. District Judge Yvonne Gonzalez Rogers described the case to the jury pool: Musk alleges breach of charitable trust and unjust enrichment against Altman, Brockman, and OpenAI, and aiding and abetting breach of charitable trust against Microsoft — centered on OpenAI’s operation as a nonprofit and its creation of a for-profit affiliate.

Prospective jurors were asked about topics including their views on AI and the parties involved. 

One man said he was an avid news reader who continues to subscribe to a newspaper — drawing applause from journalists listening in the overflow room. He was more pointed about the plaintiff: “I do have some strong feelings with regard to Elon and just how he does things. Elon doesn’t care about people, much like our president. He cares about money.”

A nurse said AI creates more work in her job, requiring frequent checking and correction. 

One prospective juror, when asked by the judge if she has worked in teams, asked if the judge was referring to the conferencing app. “Microsoft is happy that you asked that question,” the judge said.

When another prospective juror expressed concern about being able to follow the technical nuances of the case, the judge replied, “This is just a case about promises and breaches of promises.”

What’s at stake for Microsoft: Amid the feud between two of tech’s most polarizing personalities, Microsoft might seem like a subplot, but its actions are at the heart of the case.

The company has invested more than $13 billion in OpenAI since 2019, building its products around the partnership and betting its competitive future on the deal, before hedging its bets more recently with rival AI firms and its own in-house models.

A victory for Elon Musk would mean a federal judge ordering Microsoft to hand over a slice of what its OpenAI partnership has been worth — not to Musk, but to the OpenAI nonprofit. 

Musk’s damages expert puts the combined demand as high as $134 billion across both defendants, with Microsoft’s share between $13.3 billion and $25 billion. However, the judge has already called these figures into question, saying Musk’s expert was “pulling these numbers out of the air.” Microsoft called the methodology “unverifiable” and “unprecedented.”

A loss could also hand regulators in the United States and Europe new ammunition just as the company tries to defend its OpenAI relationship from antitrust scrutiny. In that way, it could force every major tech company to rethink how it invests in mission-driven AI labs.

The story took a new twist Monday morning when Microsoft and OpenAI announced a major amendment to their partnership — loosening the terms of their alliance and, perhaps not coincidentally, demonstrating that their fortunes aren’t as aligned as they once were.

Microsoft’s defense: In short, the company says it was kept in the dark, that it invested as a commercial partner, never informed by OpenAI of any charitable restrictions attached to Musk’s contributions or any duties the company owed to the Tesla and SpaceX founder. 

Former OpenAI CTO Mira Murati appeared to back that up in her deposition, testifying that she never told anyone at Microsoft about those restrictions. In a filing over the weekend, Microsoft’s lawyers flagged a discrepancy: Murati’s answer to that question was missing from the official deposition transcript. It was audible on the video recording, but absent from the written record. 

Microsoft has also pointed to its work with Musk’s own AI company, xAI, as evidence of its neutrality — arguing in pretrial motions that hosting xAI’s Grok model on Azure proves it is simply a platform for competing AI models, not a partisan actor in OpenAI’s transformation. 

Microsoft’s cleanest path to victory, however, may be procedural. The company contends Musk’s claims are barred by the statute of limitations, and its primary evidence is his own words. 

In a September 2020 tweet, Musk publicly declared that “OpenAI is essentially captured by Microsoft.” If Microsoft can convince the jury that Musk knew about its involvement more than three years before he filed suit, the multibillion-dollar exposure disappears entirely.

Smoking gun? Musk’s lawyers will point to an internal Microsoft email from March 2018 in which Microsoft’s own CTO raised the very question that will come before the jury. 

Writing to Nadella ahead of a call with Altman, Scott made an observation about OpenAI’s commercial transformation: “I wonder if the big OpenAI donors are aware of these plans? Ideologically, I can’t imagine that they funded an open effort to concentrate ML [machine learning] talent so that they could then go build a closed, for profit thing on its back.”

Microsoft went on to invest billions anyway.

It’s one of many behind-the-scenes emails revealed so far in the case, including internal Microsoft exchanges showing Nadella and other executives weighing in on the composition of OpenAI’s board during the crisis that briefly ousted Altman as CEO in November 2023.

When Musk’s lawyers confronted Nadella with Scott’s email in his deposition and asked whether he shared those concerns, the Microsoft CEO deflected: “I think that the nonprofit board of OpenAI gets to make the decision on what’s the best way for them to realize their mission.” 

Nadella also said he did not recall ever raising Scott’s concerns directly with Altman. 

Microsoft says Scott’s email shows due diligence, not guilt: Scott asked the right questions, OpenAI’s board provided contractual assurances that its agreements “would not impinge any third party’s rights,” and Microsoft was legally entitled to rely on those representations. 

Backstory: Musk co-founded OpenAI in 2015 as a nonprofit dedicated to the safe development of AI, contributing tens of millions of dollars before leaving the board in 2018. He filed suit in late 2024, claiming Altman and others had transformed OpenAI into a for-profit venture, betraying the mission he helped fund and enriching themselves and their investors.

What’s next: Addressing prospective jurors this morning, Judge Gonzalez Rogers said she expects the trial to wrap by May 21 — including roughly three weeks of evidence followed by deliberations, with nine jurors deciding the case. If the jury finds for Musk, the judge will then determine in a separate proceeding how much Microsoft and OpenAI must pay out. 

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