Musk Testifies He Was Duped in OpenAI Trial That Could Upend $1T IPO
Key Takeaways
- ▸Musk claims he donated $38 million thinking OpenAI was a nonprofit for humanity's benefit; the company instead became a for-profit worth $800 billion with enriched executives
- ▸Trial outcome could upend OpenAI's ~$1 trillion IPO and governance structure if the court rules in Musk's favor
- ▸Both sides claim to be guardians of AI safety, but Judge Gonzalez Rogers expressed skepticism about both parties' genuine commitment to safety
Summary
In the first week of a landmark trial in federal court in Oakland, California, Elon Musk testified that he was deceived into providing OpenAI with $38 million in "free funding" under the premise that the company would remain a nonprofit dedicated to developing AI for the benefit of humanity. Instead, Musk claimed, OpenAI co-founders Sam Altman and Greg Brockman used his donation to build what would become an $800 billion company with a for-profit structure that enriched its executives.
Musk is asking the court to remove Altman and Brockman from their positions and to unwind OpenAI's restructuring into a for-profit subsidiary. The outcome of the trial could significantly impact OpenAI's planned IPO, which is expected to value the company at nearly $1 trillion. Meanwhile, Musk's own AI company, xAI—which develops the Grok chatbot—is preparing its own IPO targeting a $1.75 trillion valuation. Notably, xAI uses OpenAI's models to train its own systems, adding competitive complexity to the dispute.
The trial became a battleground over AI safety stewardship, with both sides claiming to be the true guardians of responsible AI development. Musk argued that OpenAI's shift to a for-profit model endangered humanity's future, warning of a "Terminator scenario where AI kills us all." OpenAI's legal team countered that Musk himself was not genuinely committed to AI safety. Judge Yvonne Gonzalez Rogers, however, expressed skepticism about both sides' claims, remarking that she suspected "plenty of people who don't want to put the future of humanity in Mr. Musk's hands."
- xAI's competing IPO plans (~$1.75 trillion) and its reliance on OpenAI's models for training underscore the high stakes and competitive tensions
