Musk's Lawsuit Against Altman and Brockman

On February 29, 2024, Elon Musk filed a lawsuit in the United States District Court for the Northern District of California against OpenAI, its CEO Sam Altman, and its president Greg Brockman. Musk’s complaint alleged that OpenAI and its executives had violated the company’s founding agreement by shifting from their original commitment to prioritize AI safety for the benefit of humanity, to instead focusing on profit. This lawsuit, known as Musk v. Altman, directly questioned OpenAI’s transformation from a nonprofit to a for-profit structure.

Musk and Altman both co-founded OpenAI in December 2015. The founding team also included Ilya Sutskever, Greg Brockman, Trevor Blackwell, Vicki Cheung, Andrej Karpathy, Durk Kingma, John Schulman, Pamela Vagata, and Wojciech Zaremba. At its start, OpenAI was established as a nonprofit organization, promising to operate transparently and ensure that artificial general intelligence (AGI) would benefit all of humanity, rather than being controlled by a single company or government. Musk left OpenAI in 2018, following a power struggle among the leadership.

Between 2016 and 2020, Elon Musk contributed $44 million to OpenAI. He asserts that these contributions were made with the understanding that OpenAI would remain a nonprofit and adhere to its original mission. In November 2024, Musk filed a motion for a preliminary injunction to block OpenAI from converting into a for-profit company. He argued that this conversion would directly violate the terms under which his donations were made.

In December 2024, OpenAI’s leadership proposed a restructuring plan to convert its capped-profit subsidiary into a Delaware-based public benefit corporation (PBC), removing the profit cap and releasing it from the nonprofit’s control. They claimed that such a change was necessary to attract new investments, develop advanced AI systems, and fulfill the organization's mission more effectively. Critics, however, argued that the restructuring plan would remove significant governance safeguards and expose OpenAI to the conflicting pressures of maximizing profits.

On May 1, 2025, United States District Judge Yvonne Gonzalez Rogers issued a decision in the ongoing litigation, trimming some of Musk’s claims. She excluded his allegations of false advertising and breach of fiduciary duty but allowed the claims of fraud and unjust enrichment to proceed. The judge also said that Musk’s claim of irreparable harm from the conversion to for-profit status was a stretch.

In April 2025, a group of twelve former OpenAI employees filed an amicus brief in support of Musk’s lawsuit. The brief, filed by Harvard law professor Lawrence Lessig, accused OpenAI of abandoning its nonprofit roots. It also claimed that Sam Altman had directly lied to employees about the extent of his knowledge and involvement in the practice of forcing departing staff to sign lifetime non-disparagement agreements. This practice was cited as evidence of a shift in company culture away from the open, mission-driven ethos promised at OpenAI’s founding.

On May 5, 2025, OpenAI announced it was no longer planning to restructure into a for-profit company separate from its nonprofit board. Despite this announcement, Musk’s lawyer Marc Toberoff stated the lawsuit against OpenAI would continue. In October 2025, OpenAI ultimately formed a for-profit company called OpenAI Group PBC, with the original nonprofit retaining a 26 percent ownership stake and Microsoft acquiring a 27 percent stake. This new structure allowed OpenAI to raise capital and operate more like a traditional technology company, including the potential for an initial public offering.

In April 2026, Musk amended his lawsuit, asking not only for damages to be directed to OpenAI’s charity, but also for Altman’s removal from the company’s board. He also included additional OpenAI executives in the lawsuit, such as OpenAI’s president Greg Brockman.

Jury selection for Musk v. Altman began on April 27, 2026. The trial was presided over by Judge Yvonne Gonzalez Rogers. On April 28, 2026, Elon Musk began his testimony against Altman and OpenAI, which continued until April 30. During the trial, Musk was questioned by OpenAI’s attorney William Savitt and his own lawyer, Steven Molo. The next witness for Musk’s side was Jared Birchall, the head of Musk’s family office, who was questioned about the donation restrictions Musk had attached to his gifts to OpenAI.

During the proceedings, Judge Rogers ruled that existential risk posed by artificial intelligence was outside the scope of the trial. She limited the testimony of Stuart J. Russell, a prominent AI safety researcher who was expected to speak to risks associated with advanced AI. Another witness called was Shivon Zilis, who had previously received messages from Sam Altman seeking advice on whether to publicly praise Musk on X, which Altman subsequently did.

In October 2025, OpenAI completed a $6.6 billion share sale, valuing the company at $500 billion and making it the world’s most valuable private company, surpassing SpaceX.

Microsoft’s involvement in OpenAI’s restructuring was significant. Microsoft invested over $13 billion in OpenAI and received a 27 percent stake in the for-profit entity. In April 2026, Microsoft and OpenAI announced a new agreement that removed restrictive clauses from their partnership, including the stipulation that Microsoft would be OpenAI’s exclusive cloud provider, and loosened revenue-sharing provisions. OpenAI agreed to purchase $250 billion of Azure services, while Microsoft ceded its right of first refusal for future OpenAI cloud purchases.

OpenAI’s for-profit branch became a public benefit corporation named OpenAI Group PBC, while the nonprofit was renamed the OpenAI Foundation. All members of the PBC’s board of directors were appointed by the OpenAI Foundation, which retains the power to remove them at any time. As of April 2026, all but one board member of the OpenAI Foundation were also board members of OpenAI Group PBC.

In April 2026, OpenAI closed a funding round of $122 billion in committed capital, bringing its post-money valuation to $852 billion. This remains one of the largest private technology financings in history.

By 2026, OpenAI’s annualized revenue reached $13.1 billion, but the company projected a net operating loss of $9 billion for that year. Its spending was driven by the enormous costs associated with training and operating large language models and constructing new data centers.

As part of the case files disclosed in federal court in November 2025, it was revealed that Sam Altman had reached out to Shivon Zilis on February 9, 2023, asking her advice about whether to publicly praise Musk, highlighting behind-the-scenes communications between the key figures in the case.

On October 21, 2025, OpenAI introduced ChatGPT Atlas, a web browser that integrates ChatGPT directly into web navigation, marking a major development in the application of generative AI technology.

OpenAI’s employee base reached 4,500 people by 2026, showing the company’s rapid expansion within just over a decade of its founding.