As a high-stakes trial begins in a US federal court this week, a decade-old relationship between Elon Musk and OpenAI has unravelled into one of Silicon Valley’s most consequential corporate battles.

The case, which pits Musk against OpenAI, its chief executive Sam Altman and key backer Microsoft, is being closely watched across the technology industry. At stake is the question: Who controls AI built for public good when it becomes a multibillion-dollar business?

Musk’s core claim is that OpenAI was created as a nonprofit with a specific obligation: To develop artificial general intelligence in a way that benefits humanity rather than investors. He argues this was a binding commitment that induced him to fund the organisation in its earliest years. By restructuring OpenAI into for-profit entities and raising billions from external investors, Musk alleges, its leadership breached that promise.

As a recent investigation in The New Yorker states, in public and private correspondence with Musk and others, Altman warned the technology should not be dominated by a profit-seeking mega-corporation. Altman had written to Musk back in the day, “Been thinking a lot about whether it’s possible to stop humanity from developing AI.” Altman reportedly outlined the overarching principles that such an organisation would have safety as a first-class requirement, complying with and aggressively supporting all regulation. Then, he and Musk settled on a name: OpenAI.

The company was founded in December 2015 as a nonprofit artificial intelligence research laboratory, designed to counter the growing dominance of Big Tech, particularly Google.

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Altman housed OpenAI in Y Combinator’s nonprofit arm, framing it as an internal philanthropic project, according to The New Yorker. Musk also provided some office space for OpenAI in a former suitcase factory in the Mission District of San Francisco, the report adds. Altman is said to have told early recruits that OpenAI would remain a pure nonprofit and programmers took significant pay cuts to work there.

By 2017, disagreements began to emerge between Musk and Altman. Developing cutting-edge AI models demanded enormous computing power and capital, and OpenAI’s leadership increasingly believed a pure nonprofit structure would be unsustainable.

Court filings and internal documents later released by OpenAI show that Musk sought majority equity, board control and the chief executive role, or, alternatively, a merger that would fold OpenAI into Tesla. Other founders resisted, fearing that concentrating control in one individual would undermine the organisation’s independence.

The New Yorker reports that Musk wrote an email stating: “Guys, I’ve had enough. Either go do something on your own or continue with OpenAI as a non-profit… otherwise, I’m just being a fool who is essentially providing free funding for you to create a startup.”

The standoff marked a decisive turning point. Musk departed the board in 2018. Five years later, in 2023, he founded his own for-profit AI venture, xAI. In 2024, Musk sued Altman and OpenAI for fraud and breach of charitable trust, alleging that he had been manipulated by “Altman’s long con”. On Monday, he posted on X, addressing the OpenAI founder as “Scam” Altman.

Soon after his departure from board, Microsoft stepped in, initially with a $1 billion investment, providing OpenAI with cloud infrastructure and the financial runway needed to scale.

The For-Profit Shift

In 2019, OpenAI unveiled a controversial restructuring: A capped-profit subsidiary governed by the original nonprofit. The organisation said the move was the only way to attract sufficient capital while preserving its broader mission.

OpenAI rejects the nonprofit characterisation entirely. The company maintains that no permanent prohibition on profit ever existed, that Musk himself supported discussions about restructuring while he was involved, and that he left only after failing to secure control. In OpenAI’s account, the nonprofit mission was not abandoned but adapted to survive in an increasingly capital-intensive AI race.

Musk, now on the outside, viewed the change as a betrayal. The disagreement remained largely rhetorical until late 2022, when ChatGPT’s runaway success transformed OpenAI into one of the world’s most powerful technology companies almost overnight.

The feud escalated dramatically in February 2025, when a Musk-led investor group made an unsolicited $97.4 billion offer to buy OpenAI’s nonprofit parent. The board rejected the bid outright.

The exchange spilled onto X. Altman mocked the offer by suggesting OpenAI would instead buy Twitter for $9.74 billion. Musk responded by calling Altman a “swindler”.

Later that year, OpenAI restructured again, converting its for-profit arm into a public benefit corporation while retaining nonprofit oversight—changes now central to the litigation.

The Legal Questions Before the Court

The case turns on whether any enforceable promises were actually made. The court will scrutinise founding documents, emails, board discussions and public statements to determine whether OpenAI’s commitment to nonprofit ideals amounted to a legal obligation or simply an aspirational mission statement.

Bound up in that is the question of to whom OpenAI’s leaders owed their fiduciary duties—Musk argues those ran primarily to the public and the organisation’s charitable purpose, while OpenAI says its leadership acted within its discretion to ensure the organisation’s survival. A third strand concerns Microsoft: Musk alleges the software giant’s financial and commercial influence effectively transformed OpenAI into a Big Tech subsidiary, which both OpenAI and Microsoft deny, pointing to governance structures that preserve nonprofit oversight.

As for remedies, Musk is not seeking a personal payout—he wants the court to reassert nonprofit primacy, unwind parts of OpenAI’s restructuring and potentially remove Altman and President Greg Brockman from their roles. OpenAI says such intervention would be unprecedented and destabilising, accusing Musk of using litigation to interfere with a rival. The presiding judge has repeatedly stressed that the trial is about “promises and breaches of promises”, rather than abstract debates about AI ethics. Heavyweights from across Silicon Valley are expected to testify—Musk, Altman, and Microsoft chief executive Satya Nadella among them. And the verdict may redefine how tech organisations balance public good with profit in the age of AI.