{"id":32267,"date":"2026-05-08T13:22:12","date_gmt":"2026-05-08T13:22:12","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/32267\/"},"modified":"2026-05-08T13:22:12","modified_gmt":"2026-05-08T13:22:12","slug":"elon-musk-could-lose-his-legal-case-against-openai-and-still-get-most-of-what-he-wants","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/32267\/","title":{"rendered":"Elon Musk could lose his legal case against OpenAI and still get most of what he wants."},"content":{"rendered":"

So, what\u2019s a guy got to do to become a billionaire around here? Greg Brockman<\/a> scribbled the question in his diary, recently unsealed as trial evidence, just two years after co-founding OpenAI as a charity in 2015: \u201cFinancially, what will take me to $1B?\u201d<\/p>\n

For Brockman, now OpenAI\u2019s president, the answer was a yearslong restructuring saga<\/a> in which OpenAI metamorphosed from a nonprofit research lab into a corporate behemoth on the verge of a massive public offering. Elon Musk, another co-founder who left OpenAI in 2018, is suing OpenAI, CEO Sam Altman, and executives like Brockman for this transformation, alleging that he was misled about the company\u2019s profit motives when he donated tens of millions of dollars to it in its early days. Brockman testified<\/a> on Monday that he was eventually awarded a slice of OpenAI for the \u201cblood, sweat, and tears\u201d \u2014 but, notably, not money<\/a> \u2014 he poured into building OpenAI. His portion of the behemoth is now valued at about $30 billion on paper. (Disclosure: Vox Media is one of several publishers that have signed partnership agreements with OpenAI. Our reporting remains editorially independent.)<\/p>\n

Musk \u2014 who is himself known to be an unreliable narrator<\/a> at times \u2014 will have an uphill battle when it comes to proving his case, legal experts say, especially if he wants a judge to reverse OpenAI\u2019s for-profit restructuring. But the mega-billionaire vs. multibillionaire courtroom cage match might actually be beside the point. If the evidence Musk presents in trial is damning enough to convince a couple of attorneys general to take a second look at the deals they struck with OpenAI to finalize its for-profit transformation last fall, then he might not need to win his case at all. Musk could lose in court tomorrow, and potentially still get what he mostly seems to want: a hobbled OpenAI, more beholden to its nonprofit roots, just as it\u2019s looking to go public.<\/p>\n

Last October, California and Delaware attorneys general made a deal to allow OpenAI to turn its for-profit arm into a public benefit corporation, paving the way for a highly rumored IPO<\/a>. OpenAI is based in California, but incorporated its for-profit arm in Delaware, as do most large corporations<\/a>. It would be very unusual, perhaps unprecedented, for a federal judge to usurp that regulatory decision by forcing OpenAI to unwind its corporate reconfiguration, as Musk has requested in court. What\u2019s more likely, legal experts say, is that new evidence, such as Brockman\u2019s diary, or possibly even public outcry that arises from the case, convinces the attorneys general to revisit or amend their original decision to let OpenAI go corporate in the first place. On Wednesday, a coalition of over 60 civil society organizations called EyesOnOpenAI sent a letter<\/a> to California Attorney General Rob Bonta calling on him to do just that.<\/p>\n

\u201cIn an ideal world, the plaintiff in this case would be the people of California\u201d rather than \u201cone billionaire who decided to pick his petty beef with this other billionaire he doesn\u2019t like,\u201d said Catherine Bracy, CEO of the nonprofit TechEquity and co-leader of EyesOnOpenAI, who believes the government should be holding OpenAI accountable for what she views as a breach of charitable trust.<\/p>\n

\u201cI\u2019d be pretty comfortable betting on Musk losing,\u201d said Samuel D. Brunson, a nonprofit legal scholar at Loyola University Chicago School of Law, but \u201cI\u2019d be more comfortable betting on the attorneys general\u201d revisiting their agreements with OpenAI, \u201cI still don\u2019t know if that\u2019s a winning bet,\u201d he hedged, but at the very least, it\u2019s well \u201cwithin the realm of possibility.\u201d<\/p>\n

Elon Musk\u2019s case against OpenAI is flimsy, but there\u2019s some there there<\/p>\n

OpenAI was founded in 2015 with the tax-deductible mission of building AI \u201cunconstrained by a need to generate financial return.\u201d But building AI has become much more expensive<\/a> than it was then, and without a for-profit arm, OpenAI almost certainly couldn\u2019t build the kind of tools it does today, such as ChatGPT.<\/p>\n

Musk always knew this about OpenAI\u2019s growth trajectory, Brockman and CEO Sam Altman have argued<\/a>, and his suit is just bitter grapes. He\u2019s jealous, they say, of how much better OpenAI\u2019s AI models are to his own efforts. If OpenAI is Nancy Kerrigan, the implicit argument goes, then Musk\u2019s xAI is Tonya Harding<\/a>, eager to break her talented competitor\u2019s knee.<\/p>\n

But Musk has tried to paint OpenAI as the villain that stole a charity<\/a>, and himself as a singular voice for nonprofit integrity, a pure-hearted soldier set on ensuring the OpenAI Foundation gets its fair due. (As a Ringer piece<\/a> on the suit put it: \u201cElon Musk takes the stand for\u2026humanity?\u201d) OpenAI compensated<\/a> its nonprofit arm with a 26 percent stake worth over $200 billion in the newly formed corporation, which is a lot, but notably less than what it awarded employee-investors like Brockman and its partner Microsoft when it went corporate.<\/p>\n

Musk is asking the court for $150 billion<\/a> in restitution for his donations. He has vowed to donate any damages<\/a> to the OpenAI Foundation, which is already one of the world\u2019s wealthiest charities.<\/p>\n

He could well have a case on this financial front, which \u201cis about Musk personally, and the harm that he might have suffered,\u201d said Peter Molk, a professor at the University of Florida Levin College of Law. \u201cThis isn\u2019t money that he needs personally,\u201d but it would also hobble an opponent at a key moment in the race for AI dominance. but it does certainly give the company a black eye.\u201d<\/p>\n

But Musk\u2019s other legal requests \u2014 which include court orders that remove Altman from power and outright undo OpenAI\u2019s for-profit restructuring \u2014 are bigger legal swings, in part because they explicitly touch on questions that have already been settled in the company\u2019s negotiations with the government. A win on these grounds \u201cwould be disruptive in a way that courts are hesitant to be disruptive,\u201d said Brunson, the Loyola legal scholar.<\/p>\n

But the big decisions on OpenAI might come from regulators, not the courtroom<\/p>\n

Even if Musk doesn\u2019t win his case, he\u2019ll have managed to air out a lot of OpenAI\u2019s dirty laundry in the process. \u201cBy the end of this week, you and Sam will be the most hated men in America,\u201d Musk texted Brockman<\/a> just before the trial began. \u201cIf you insist, so it will be.\u201d<\/p>\n

That may be hyperbole, but Musk\u2019s lawsuit certainly is intensifying the storm of criticism that has been swirling since OpenAI\u2019s restructuring deal was approved last October. And it could be enough to convince the attorneys general to reconsider at least some of its terms.<\/p>\n

\u201cI would be surprised if the AG knew the extent to which OpenAI never did a valuation\u201d of the OpenAI foundation\u2019s worth, said Bracy of TechEquity. \u201cI would be surprised if he knew the extent to which the conflicts of interest were embedded up and down the company. I would be surprised if he knew about how Greg Brockman was musing about how he could become a billionaire.\u201d<\/p>\n

She has no expectation that the attorney general will attempt to force OpenAI to somehow crawl back into its nonprofit skin. Instead, \u201cat this point, I would like to see the nonprofit fairly compensated for the assets,\u201d \u2014 which Bracy, like Musk, thinks could be worth significantly more than the 26 percent stake OpenAI assigned to it \u2014 alongside \u201csome independent governance of those assets,\u201d she said. With the exception of one member, the OpenAI Foundation\u2019s board of directors is currently identical to that of the for-profit entity, with its membership at least partially orchestrated by Microsoft CEO Satya Nadella<\/a>, according to court documents.<\/p>\n

Both of those asks seem plausible, legal experts told me, especially if the evidence that\u2019s come up in trial so far was not available to the attorneys general. In theory, \u201cit would have to be some awfully damning stuff to get the AG to open this back up again,\u201d said Molk, but they are also elected officials, \u201cso they can\u2019t just ignore a wave of public outcry.\u201d<\/p>\n

So far, there\u2019s no smoking gun \u2014 or undeniable evidence that OpenAI outright lied to the government when it negotiated its restructuring deal \u2014 at least not yet. But the revelations that Brockman quietly held tens of billions of dollars in equity, and new details about his and Altman\u2019s business dealings with OpenAI partners such as Cerebras<\/a>, do add substance to claims that the company might not have had the nonprofit arm\u2019s interests in mind when it valued its stake.<\/p>\n

\u201cIf the attorney general were to see that, yes, in fact, the pricing was wrong, they underpaid, that would be justification\u201d for them to revisit their agreements, Brunson said. \u201cI could see that as being a more likely result than Elon Musk winning, and that result would basically be that OpenAI, the for-profit, has to give more money to OpenAI, the nonprofit.\u201d<\/p>\n

A few months after his 2017 diary entry about becoming a billionaire, court documents<\/a> show Brockman vacillated over what to do with OpenAI. \u201cIt\u2019d be wrong to steal the non-profit,\u201d he wrote one day, then \u201cit would be nice to be making the billions\u201d days later. \u201cCan\u2019t see us turning this into a for-profit without a very nasty fight,\u201d he wrote in November 2017.<\/p>\n

Within about a year, Musk left OpenAI and Brockman received a founding stake of the company that would go on to make him very rich.<\/p>\n

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Vox Editor-in-Chief<\/p>\n","protected":false},"excerpt":{"rendered":"So, what\u2019s a guy got to do to become a billionaire around here? Greg Brockman scribbled the question…\n","protected":false},"author":2,"featured_media":32268,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[1069,4523,157,134],"class_list":["post-32267","post","type-post","status-publish","format-standard","has-post-thumbnail","category-openai","tag-big-tech","tag-future-perfect","tag-openai","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/32267","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=32267"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/32267\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/32268"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=32267"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=32267"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=32267"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}