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Elon Musk Says OpenAI Betrayed Him, Clashes With Company's Attorney (sfchronicle.com) 51

Posted by BeauHD from the day-three dept.
An anonymous reader quotes a report from the San Francisco Chronicle: Elon Musk returned to the witness stand Wednesday in Oakland federal court for a second day of testimony in his case against OpenAI, detailing his shift from being an enthusiastic supporter of the nonprofit to feeling betrayed. He also clashed repeatedly with OpenAI's attorney over questions that Musk believed were unfair. He said his feelings towards OpenAI CEO Sam Altman and President Greg Brockman shifted from a "phase one" of support, "phase two" of doubts, and finally "phase three, where I'm sure they're looting the nonprofit. We're currently in phase three," Musk said with a chuckle. Musk said he was a "fool" for giving OpenAI "$38 million of essentially free funding to create what would become an $800 billion company," of which he has no equity stake.

In his 2024 lawsuit, Musk alleged breach of charitable trust and unjust enrichment, arguing OpenAI abandoned its original nonprofit mission to benefit humanity to pursue financial gain. OpenAI's lawyer William Savitt argued Tuesday during his opening statement that the nonprofit entity remains in control of the for-profit public benefit corporation and is now one of the most well-funded nonprofits in the world. Musk is seeking to oust Altman from OpenAI's board and upwards of $134 billion in damages, which he said would be used to fund OpenAI's nonprofit mission. During cross-examination, Savitt clashed with Musk over questioning. Savitt asked whether Musk had contributed $38 million to OpenAI, rather than the $100 million that he later claimed to have invested on X. Musk said he also contributed his reputation to the company and came up with the idea for the name, leading Savitt to ask Musk to respond yes or no to "simple" questions.

"Your questions are not simple. They're designed to trick me, essentially," Musk said, adding that he had to elaborate or it would mislead the jury. He compared Savitt's questions to asking, "have you stopped beating your wife?" Judge Yvonne Gonzalez Rogers intervened, leading Musk to answer yes to the $38 million investment amount. The world's richest man said his doubts grew and by late 2022, he thought "wait a second, these guys are betraying their promise. They're breaking the deal." "I started to lose confidence that they were telling me the truth," Musk said. A turning point was co-defendent Microsoft's investment of billions of dollars into OpenAI, Musk said. On October 23, 2022, Musk texted Altman that he was "disturbed" to see OpenAI's valuation of $20 billion in the wake of the Microsoft deal. Musk called the deal a "bait and switch," since a nonprofit doesn't have a valuation. OpenAI had "for all intents and purposes" become primarily a for-profit company, Musk argued. Altman responded to Musk by text that "I agree this feels bad," saying that OpenAI had previously offered equity in the company but Musk hadn't wanted it at the time. Altman said the company was happy to offer equity in the future. Musk said it "didn't seem to make sense to me" to hold equity in what should be a nonprofit. Musk also testified about former OpenAI board member Shivon Zilis, who lives with him, is the mother of four of his children, and served as a senior advisor at Neuralink. He denied that she shared sensitive OpenAI information with him. Court evidence showed Musk had encouraged her to stay close to OpenAI to "keep info flowing" and had approved Neuralink recruiting OpenAI employees, which he defended by saying workers are free to change jobs. "It's a free country," Musk said.

Recap:
Musk Testifies OpenAI Was Created As Nonprofit To Counter Google (Day Two)
Elon Musk and OpenAI CEO Sam Altman Head To Court (Day One)

Elon Musk Says OpenAI Betrayed Him, Clashes With Company's Attorney More | Reply

Elon Musk Says OpenAI Betrayed Him, Clashes With Company's Attorney

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  • OpenAI is not a nonprofit anymore (Score:5, Interesting)

    by memory_register ( 6248354 ) on Wednesday April 29, 2026 @11:50PM (#66119650)

    Musk keeps using the term "looting the nonprofit" but the restructuring into a for-profit was done above board with the consent of the board of directors. I get there was drama, but all of it was legal. Don't be mad when other people have a different vision and controlling power.

  • Now this might strike some viewers as harsh (Score:3)

    by rsilvergun ( 571051 ) on Wednesday April 29, 2026 @11:54PM (#66119656)
    But cue The Norm Macdonald meme.

  • Objection, your honor (Score:5, Funny)

    by Krishnoid ( 984597 ) on Thursday April 30, 2026 @12:05AM (#66119662) Journal

    "Your questions are not simple. They're designed to trick me, essentially," Musk said, adding that he had to elaborate or it would mislead the jury. He compared Savitt's questions to asking, "have you stopped beating your wife?"

    "Assumes facts not in evidence. Unless, of course, we missed something really, really unusual in discovery, or the artificial intelligence is hallucinating again."

  • since a nonprofit doesnâ(TM)t have a valuatio (Score:5, Insightful)

    by ToasterMonkey ( 467067 ) on Thursday April 30, 2026 @02:10AM (#66119762) Homepage

    since a nonprofit doesnâ(TM)t have a valuation

    It has revenue, it has value. I'm not following Musk's logic. Say it was a cancer research charity. You make a donation. That money goes fully to the non-profit's mission of cancer research and affordable therapy. They later sell or license some revenue generating IP they created to a controlled subsidiary. That licensing funds the non-profit's governance and its mission, the for profit arm can grow faster from outside investments and grant equity to highly poachable employees. Is the non-profit still following its mission and spending every dollar of donations and revenue on the mission? Yes. Does it need to retain all revenue growth? Why? ... it's a non-profit ...

    It's just weird to look at it like you got shafted because your donation didn't "buy" all the maximum earnings potential (that as a non-profit is not even the objective, RIGHT?) and that you wouldn't hold a stake in anyway. This is the same weird argument people make with open source dual license projects, like you give something away to be used for whatever, but someone else does something with it and suddenly they "took" something from you. Nah your stuff is right there doing its thing, it didn't go anywhere, it's still doing exactly what it claimed to do. If you wanted a share of the future earnings you're in the wrong place sorry.

    • Re:since a nonprofit doesnâ(TM)t have a valua (Score:5, Informative)

      by Njovich ( 553857 ) on Thursday April 30, 2026 @05:38AM (#66119884)

      I feel like you might be confusing value and valuation. A valuation is what you believe a company would hypothetically sell for.
      Selling a non-profit for ... profit... is kind of directly against the whole point of a non-profit.

      So I would say thinking of the valuation for a non-profit is weird as hell.

      Something like the Salvation Army has value of course. Sure, if you could buy the salvation army, there would be buyers lining up for this well known brand with cash in the bank and lots of donations (or revenue if you want). So technically you could be talking about a 'valuation'. But selling shares of it in the hopes of propping up value and selling it again... like that is just a for profit company.

      If you let non-profits do that, that is basically just the end of real non-profits.

      • I feel like you might be confusing value and valuation. A valuation is what you believe a company would hypothetically sell for.
        Selling a non-profit for ... profit... is kind of directly against the whole point of a non-profit.

        So I would say thinking of the valuation for a non-profit is weird as hell.

        Something like the Salvation Army has value of course. Sure, if you could buy the salvation army, there would be buyers lining up for this well known brand with cash in the bank and lots of donations (or revenue if you want). So technically you could be talking about a 'valuation'. But selling shares of it in the hopes of propping up value and selling it again... like that is just a for profit company.

        If you let non-profits do that, that is basically just the end of real non-profits.

        OpenAI Foundation, the non-profit. It wasn't sold, isn't being sold, and nobody is trying to sell it. The "valuation" Musk is referring to must be the $$$ value that OpenAI has, that definitely can be sold. When we say something doesn't make sense, because it can't happen, and something real was misidentified, can we come back to the real thing? For everyone's benefit I'll assume Mr Musk was confused.

        No need to play the "if you could buy" game with the Salvation Army, let's use the Girl Scouts.

        The non-profi

        • Its kind of different for what OpenAI did. They split off part of the company as a OpenAI Group PBC (profit benefit corporation). The idea being that the non-profit still does its non-profit work while the benefactory can do all the corpo stuff to get investments. Whatever reason he feels "betrayed" after he did his initial donation assuming they would stay purely non-profit. ChatGPT PBC is now just raking in cash with major investments with initial from Microsoft and Google as well as selling stocks to

      • Re: (Score:2)

        by PCM2 ( 4486 )

        I feel like you might be confusing value and valuation. A valuation is what you believe a company would hypothetically sell for.

        Ah, but you do need to "sell" a nonprofit ... to donors. When making decisions about where to spend their money, high-value donors want to know about the organization they're giving money to. For this reason, nonprofits have valuations, although they aren't calculated the same way as those of for-profit companies.

        So I would say thinking of the valuation for a non-profit is weird as hell.

        It can get pretty weird, yeah ... especially when you're trying to assess intangibles, such as "goodwill."

    • Re: (Score:1)

      by dfghjk ( 711126 )

      "Is the non-profit still following its mission ..."
      Who cares, that's not a legal requirement for a non-profit. "Mission" is meaningless.

      "...and spending every dollar of donations and revenue on the mission?"
      Again with the "mission". A non-profit does not net profit, that's what defines it.

      "Does it need to retain all revenue growth? Why? ... it's a non-profit ..."
      No corporation needs to "retain all revenue growth". There is absolutely nothing that requires a company to grow, non-profit or otherwise.

      "It's

      • I'm not a lawyer, but I think part of the deal for non-profit status, because it's tax advantaged, is that they do need to have a specific purpose within some guidelines. That's probably what your down mods are from, but I think we agree that maximizing the value of the held intellectual property is NOT required of a non-profit, and it's fully within a non-profit's rights to license or sell their property, if that is supported by what they do actually have to do.

        Hah, I knew dual licensing would perk some e

    • A "non" profit in America is legally defined as 35% of revenue going to the actual reason the non-profit exists, with the majority of funds able to be redirected towards "administrative costs".

      In other words, America has no damn idea what a non-profit truly is, because the current definition is THAT corrupt.

      America needs to legally re-define a non-profit to mean they need to account for 80 - 90% of their earnings and stop accepting that "administrative" positions need to be plentiful and pay 6-figure salari

  • I fed up with this worl. Oh hi Mark

  • In other words... (Score:5, Interesting)

    by fahrbot-bot ( 874524 ) on Thursday April 30, 2026 @05:37AM (#66119882)

    Musk said he was a "fool" for giving OpenAI "$38 million of essentially free funding to create what would become an $800 billion company," of which he has no equity stake.

    Sounds like sour grapes.

    (Hey Elon, how'd all that DOGE stuff work out? I mean, for us...)

    • Re: (Score:2)

      by dfghjk ( 711126 )

      Musk provided 10 times the free funding to Trump for the 2024 election, what equity stake did he get there?

      It seems there is the wrong defendant in this lawsuit. Sure, Musk got to steal all the governments data and sabotage government efforts to prosecute his criminal behavior, but he also got, as open source, product of OpenAI investment. His complaint in both cases is not a great return on his investment, it's that he didn't ultimately own everything. The problem isn't that OpenAI isn't doing exactly a

  • Hire a lawyer (Score:2, Funny)

    by Anonymous Coward

    "Your questions are not simple. They're designed to trick me, essentially," Musk said

    Sounds like you should hire a lawyer and follow their advice and have them defend you.

  • https://x.com/ns123abc/status/... [x.com]

    Musk's lawyers showed the jury the most damaging document in evidence on Brockman:

    November 2017 Brockman writes in his private diary:
    >"the true answer is that we want [musk] out... if three months later we're doing b-corp then it was a lie"
    >“can’t see us turning this into a for-profit without a nasty fight. i’m just thinking about the office and we’re in the office and his story will correctly be that we weren’t honest with him in the end

    • Typical corpo-snake behavior. Not sure which villain I want to win here. =/
    • Man if that is the highest level of backstabbing that occurred, I'd consider freshman level at best. I've seen far worse corporate behavior personally in my lifetime.

      • Man if that is the highest level of backstabbing that occurred, I'd consider freshman level at best.

        And that ladies and gentlemen is from someone whose username is "Stabiesoft".

  • Musk said he was a "fool" (Score:3)

    by apparently ( 756613 ) on Thursday April 30, 2026 @12:31PM (#66120472)

    Musk said he was a "fool"

    No shit?

    During cross-examination, Savitt clashed with Musk over questioning. Savitt asked whether Musk had contributed $38 million to OpenAI, rather than the $100 million that he later claimed to have invested on X. Musk said he also contributed his reputation to the company and came up with the idea for the name, leading Savitt to ask Musk to respond yes or no to "simple" questions. "Your questions are not simple. They're designed to trick me, essentially," Musk said, adding that he had to elaborate or it would mislead the jury.

    "Ladies and gentleman of the jury, asking me whether a statement I made is true or not is a devious question designed to trick me! Did I mention that I'm a fool? You've gotta understand that being associated with a fool like me has a valuation of 60 - 70 million!"

  • "Musk alleged breach of charitable trust and unjust enrichment, arguing OpenAI abandoned its original nonprofit mission to benefit humanity to pursue financial gain. OpenAI's lawyer William Savitt argued Tuesday during his opening statement that the nonprofit entity remains in control of the for-profit public benefit corporation and is now one of the most well-funded nonprofits in the world. "

    Musk - You got my investment under false pretense, therefore you owe me damages
    OpenAI - No, we are a non-profit company holding a for-profit company as asset

    Which argument sounds off?
    Prediction - court will tell OpenAI "divest your for-profit assets or pay the man."

  • I Hate Musk Too, But Even a Broken Clock ... (Score:4, Insightful)

    by machineghost ( 622031 ) on Thursday April 30, 2026 @01:39PM (#66120602)

    Look, Musk is one of the most despicable people on this planet, and I get why everyone here loves to hate on him: I do too.

    But ... am I really the only one here who is concerned about the fact that Open AI was created to be a non-profit that advanced humanity ... and it clearly transformed into an engine of advancing its shareholders interests?

  • Silicon Valley is the epitome demonstrating they cannot just change jobs.

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