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(AI illustration by Joe Dworetzky\/Bay City News via ChatGPT)<\/p>\n(AI illustration by Joe Dworetzky\/Bay City News via ChatGPT)<\/p>\n
MONDAY MARKED THE BEGINNING of the third week of trial in Elon Musk\u2019s lawsuit against OpenAI and its leaders, Sam Altman and Greg Brockman, and their co-defendant, Microsoft Corporation.<\/p>\n
Trial testimony on Monday was presented by two witnesses \u2014 Microsoft CEO Satya Nadella and OpenAI former chief scientist Ilya Sutskever \u2014 who have been central in the testimony of earlier witnesses.<\/p>\n
The testimony was part of a suit brought forward by Musk which contends that OpenAI was formed as a nonprofit with a mission to develop artificial intelligence for the benefit of humanity, but that over time it abandoned its mission in favor of enriching the insiders and its \u201cstrategic partner\u201d Microsoft.<\/p>\n
Nadella\u2019s testimony<\/p>\n
Prior to Nadella\u2019s testimony, Microsoft has tried to lie low during the trial, its lawyers popping up from time to time to remind the jury that much of the fight between Musk and Altman came before it arrived on the scene and that Microsoft had nothing to do with it.<\/p>\n
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For a deeper dive into the origins of the Musk v. Altman case, see Joe Dworetzky\u2019s four-part report on how OpenAI\u2019s founders went from tech allies to bitter courtroom enemies.<\/p>\n
\u2018Before the Bell Rings\u2019<\/p>\n
Part 1<\/a>\u00a0|\u00a0Part 2<\/a>\u00a0|\u00a0Part 3<\/a>\u00a0|\u00a0Part 4<\/a><\/p>\n Nadella testified for two and a half hours, a good part of it about a dramatic weekend in November 2023, when Altman and Brockman were fired by OpenAI\u2019s nonprofit board, only to be reinstated a few days later after Microsoft announced that it was offering employment to all OpenAI\u2019s employees.<\/p>\n Nadella stood tall and trim in a black suit as he took the oath. On his direct examination, he delivered his testimony in a well-polished manner. He described the beginning of his company\u2019s relationship with OpenAI as a loss-leader arrangement in which Microsoft offered discounted services with the hope of a marketing benefit.<\/p>\n However, after OpenAI created its for-profit subsidiary, Microsoft made three investments in OpenAI \u2014 one in 2019, one in 2021 and one in 2023. Each of the transactions involved a technology component and an investment component. Nadella characterized the transactions as steps in a deepening relationship that evolved over time.<\/p>\n Nadella described what each party contributed and received across the three deals.<\/p>\n Microsoft provided OpenAI with $13 billion in investment, custom-built supercomputers and cloud computing, and it also allowed OpenAI to retain the rights to commercialize its own technology despite Microsoft\u2019s exclusive license. Those were things integral to the nonprofit\u2019s mission, as Nadella understood it.<\/p>\n Microsoft received OpenAI \u201cknow-how,\u201d an \u201cexclusive\u201d license to use and make OpenAI\u2019s technology commercially available and a financial return from three different revenue streams \u2014 payments for using Azure cloud services, a profit share and a return on its equity investment.<\/p>\n Nadella said Microsoft was a for-profit company and that its responsibility was to its shareholders. The company negotiated for the best deal it could get, he said, and that it took a big risk, particularly in making the largest of its three investments, which was $10 billion in 2023. While he believed the investment was prudent, there was a risk it could have been lost, he said, further noting that he wanted to protect the investment and fight for it.<\/p>\n Musk\u2019s team used its cross examination of Nadella to show that Microsoft had progressively obtained greater and greater access and control of the technology and the value it created.<\/p>\n Nadella said that, for Microsoft, getting access to OpenAI\u2019s technology was central to its willingness to invest. Through the three transactions, Microsoft got an \u201cexclusive\u201d license to develop commercial products from OpenAI\u2019s technology (though OpenAI also retained the right to do so). It obtained the right to embed 20 full-time Microsoft employees at OpenAI. In the future, Microsoft is entitled to have an embedded employee for every 10 OpenAI employees.<\/p>\n Microsoft also obtained the right to participate in \u201cmajor decisions\u201d by OpenAI that affected its commercialization of the technology.<\/p>\n In their initial agreements with OpenAI, Microsoft did not get any interest in OpenAI technology after AGI (or artificial general intelligence) was reached. However, a corporate restructuring in 2025 added those rights. At the same time, the cap on its returns from its investment was eliminated. Nadella admitted that today Microsoft holds more of a stake in the for-profit than the nonprofit does but said it was because his company took a risk.<\/p>\n He added that he was \u201cproud Microsoft took the risk to sponsor a fledgling company so that its technology could make a difference.\u201d<\/p>\n Nadella smiled as he walked from the courtroom, giving Brockman, OpenAI\u2019s president, a friendly tap on the shoulder as he passed by.<\/p>\n Sutskever: OpenAI founder, former chief scientist<\/p>\n Also taking the stand for the first time Monday was Ilya Sutskever, former chief scientist at OpenAI. Sutskever was a member of OpenAI\u2019s founding team, recruited to nonprofit OpenAI from Google in late 2015 after what he called \u201ca big team effort\u201d by Musk, Brockman, Altman and others.<\/p>\n Sutskever said that at the time, he viewed Musk as one of the most capable CEOs in the world.<\/p>\n In August 2017, OpenAI\u2019s artificial intelligence bot had beaten an elite human player in an international video game competition. It was, he said, \u201ca big public accomplishment\u201d conveying that OpenAI could compete with Google\u2019s DeepMind artificial intelligence lab.<\/p>\n Sutskever testified that OpenAI\u2019s founders discussed \u2018outlandish ideas\u2019 to acquire more computing power, including for-profit alternatives. Musk didn\u2019t object, but insisted on control and a majority of the economic interests.<\/p>\n<\/p>\n The victory led to the \u201crealization\u201d that to make further progress, OpenAI would \u201cneed a big computer,\u201d a computer comparable to the human brain with its billions of neurons and synapses. The founders \u2014 Musk, Altman, Brockman and Sutskever \u2014 began to discuss \u201clots of outlandish ideas\u201d to acquire that computing power, including for-profit alternatives. He testified that Musk did not object to the prospect of a for-profit structure but insisted on control and a majority of the economic interests.<\/p>\n Ultimately, when the founders were unable to agree on a new structure, Musk left the OpenAI board in early 2018. The others went forward with the nonprofit.<\/p>\n In 2019, the nonprofit created the for-profit subsidiary that inked the Microsoft contracts Nadella described.<\/p>\n There was rapid change over that period in tech capabilities. The difference in OpenAI\u2019s models between 2017 and 2024 was, Sutskever said, \u201clike the difference between an ant and a cat.\u201d<\/p>\n Sutskever testified about his role in the events of November 2023 when Altman was fired. Sutskever was a member of OpenAI\u2019s nonprofit board of directors at that point and prepared a report at the request of other board members documenting serious problems with Altman\u2019s leadership as CEO.<\/p>\n The report accused Altman of \u201ca consistent pattern of lying\u201d and the \u201ccreation of an environment not conducive to the development of safe artificial general intelligence.\u201d The board relied on the report in part when its members voted 4-0 to fire Altman.<\/p>\n Five days later, after the chaotic weekend in which hundreds of OpenAI employees said they would leave to go Microsoft, the board, including Sutskever, voted to reinstate Altman as CEO. When asked why he\u2019d reversed himself, Sutskever said he was concerned that OpenAI would be destroyed by the instability that was caused by the firing.<\/p>\n \u201cIt was a Hail Mary,\u201d he said.<\/p>\n Sutskever left OpenAI in May 2024. Before he left, OpenAI had formed a \u201cSuperalignment Team\u201d to research the technical means to make \u201cunbelievably powerful AI\u201d controlled and safe. He said the team was doing \u201cthe most important work for the long term.\u201d The Superalignment Team was disbanded shortly after Sutskever left the organization.<\/p>\n Tuesday and upcoming days<\/p>\n Brett Taylor, chair of the OpenAI Foundation, the name of the nonprofit OpenAI adopted after 2025, testified after Sutskever but did not complete his direct testimony and will continue on Tuesday. Altman is also expected to testify on Tuesday. The judge expects all trial testimony to be finished on Wednesday with closing arguments on Thursday. There will be no trial on Friday, and jury deliberations will commence on Monday.<\/p>\n","protected":false},"excerpt":{"rendered":"(AI illustration by Joe Dworetzky\/Bay City News via ChatGPT) MONDAY MARKED THE BEGINNING of the third week of…\n","protected":false},"author":2,"featured_media":35735,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[6744,24,3013,25,580,7255,1302,20319,140,155,462,9508,2140,9509,19756,13257,10137,11823,20014,6964,7602,320,13611,20706,9510,5976,13955,157,12752,20315,370,969,2806,13258,1161,2066,2925,13956,134,12737,11580],"class_list":{"0":"post-35734","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-openai","8":"tag-agi","9":"tag-ai","10":"tag-artificial-general-intelligence","11":"tag-artificial-intelligence","12":"tag-chatgpt","13":"tag-corporate-governance","14":"tag-courts","15":"tag-david-schizer","16":"tag-elon-musk","17":"tag-featured","18":"tag-featured-news","19":"tag-federal-court","20":"tag-greg-brockman","21":"tag-gregory-brockman","22":"tag-helen-toner","23":"tag-ilya-sutskever","24":"tag-judge-yvonne-gonzalez-rogers","25":"tag-jury-selection","26":"tag-jury-trial","27":"tag-lawsuit","28":"tag-lawsuits","29":"tag-microsoft","30":"tag-musk-v-altman","31":"tag-natasha-mccauley","32":"tag-nonprofit-organizations","33":"tag-oakland","34":"tag-oakland-federal-court","35":"tag-openai","36":"tag-openai-trial","37":"tag-rosie-campbell","38":"tag-sam-altman","39":"tag-san-francisco","40":"tag-satya-nadella","41":"tag-shivon-zilis","42":"tag-silicon-valley","43":"tag-tech-companies","44":"tag-tech-industry","45":"tag-tech-lawsuit","46":"tag-technology","47":"tag-trial","48":"tag-trials"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/35734","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=35734"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/35734\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/35735"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=35734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=35734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=35734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/05\/LNM-20260420-MUSKVALTMAN1-03.jpg\")
You might think our relationship is strictly business, but I\u2019m really just a big Microsoftie at heart. (AI illustration by Joe Dworetzky\/Bay City News via ChatGPT)<\/p>\n![\"\"](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/05\/LNM-20260511-MUSKVALTMAN-03.jpg\")
We\u2019d rather embed them than wed them. (AI illustration by Joe Dworetzky\/Bay City News via ChatGPT)<\/p>\n![\"\"](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/05\/LNM-20260511-MUSKVALTMAN-04.jpg\")
Nice kitty? (AI illustration by Joe Dworetzky\/Bay City News via ChatGPT)<\/p>\n