The Musk-Altman Feud Moves to Court
The longstanding and acrimonious dispute between Elon Musk and OpenAI CEO Sam Altman, which has primarily unfolded through online accusations and retorts, is now entering a federal courtroom in California. Beginning Tuesday, a month-long trial will examine Musk's allegations that Altman, with whom he co-founded OpenAI, defrauded him of millions and abandoned the company's original non-profit mission.
Both Musk and Altman are expected to testify in this case, which holds significant implications for the future of artificial intelligence (AI). While one party may prevail, it is likely that neither will emerge unscathed from this high-profile legal battle.
The conflict has been compared to a heavyweight boxing match, with one commentator likening it to King Kong versus Godzilla.
"Musk and Altman are so big, so larger than life, and so unrelatable," said University of San Diego professor Sarah Federman, a specialist in conflict resolution. "That's what makes them so delicious to watch as they clash."
A nine-person jury was sworn in on Monday to decide the case under the supervision of Judge Yvonne Gonzalez Rogers. The judge has emphasized that neither Musk nor Altman will receive special treatment due to their wealth, influence, or celebrity status as the trial proceeds in the federal courthouse in Oakland.
Musk's lawsuit also names OpenAI co-founder and president Greg Brockman and Microsoft, alleging their involvement in a scheme to commercialize the company. Microsoft denies these claims.
Musk seeks billions of dollars in what his legal team describes as "wrongful gains," intending these funds to support OpenAI's non-profit operations. He also demands organizational changes at OpenAI, including Altman's removal.
OpenAI counters that Musk's actions stem from jealousy and regret over his departure from the company. The organization further accuses Musk of attempting to undermine a key competitor amid the accelerating race toward artificial general intelligence (AGI).
The Origins of the Dispute
OpenAI was co-founded by Musk and Altman in 2015 as a non-profit entity with the mission to ensure that AGI benefits all humanity. AGI is broadly defined as AI that exceeds human intelligence.
At the time of OpenAI's founding, Musk was at the height of his prominence, recognized as a pioneering technologist leading Tesla's electric vehicle revolution and SpaceX's development of reusable rockets.
Altman was a well-known figure within Silicon Valley but less so beyond it. As head of the influential tech incubator Y Combinator, his insights on Twitter were highly regarded by emerging startup founders.
The two were reportedly introduced by a Silicon Valley investor in 2012. Altman, then in his twenties and 14 years Musk's junior, pitched the idea of OpenAI to Musk, emphasizing responsible AI development.
Initially, Musk and Altman collaborated amicably, united by their belief in AI's transformative potential. At a joint conference in 2015, Musk described AI as the one technology that "could most change humanity," while cautioning it was "really dodgy" and "fraught with difficulty."
However, OpenAI's structure shifted from non-profit to for-profit, a move Musk claims was illegal.
OpenAI maintains that in 2017, all parties, including Musk, agreed that transitioning to a for-profit model was necessary "to advance the mission," though they rejected Musk's bid to become CEO with "absolute control."
Musk departed OpenAI in 2018 amid a reported power struggle with Altman.
"Guys, I've had enough," Musk wrote in an email months before leaving. "Either go do something on your own or continue with OpenAI as a nonprofit. I will no longer fund OpenAI until you have made a firm commitment to stay or I'm just being a fool who is essentially providing free funding for you to create a startup."
In 2022, OpenAI launched ChatGPT, sparking a consumer AI revolution with rapid adoption reaching 100 million monthly active users within months.
Musk subsequently founded his own AI startup, xAI, which produces the chatbot Grok, though it has lagged behind competitors.
In his 2024 lawsuit, Musk alleges OpenAI abandoned its core mission to focus on "maximising profits" for Microsoft. He claims to have donated approximately $40 million (£30 million) to OpenAI under false pretenses, accusing the defendants of manipulating him by converting the company into a largely for-profit entity.
Clash of the Tech Titans
Since the lawsuit's filing, tensions between Musk and Altman have frequently surfaced publicly.
Last year, Musk and a group of investors offered $97.4 billion to acquire OpenAI's assets. The company had recently been valued at $157 billion in a funding round and is reportedly preparing for an initial public offering (IPO) with an estimated valuation of about $850 billion.
OpenAI rejected Musk's offer, and Altman responded on Musk's social media platform X (formerly Twitter) with, "no thank you but we will buy twitter for $9.74 billion if you want."
"Swindler," Musk replied in a comment on Altman's post.
Private messages with Meta CEO Mark Zuckerberg reveal Musk inquiring whether Zuckerberg was "open to the idea of bidding on the OpenAI IP with me and some others?"
Columbia Law School professor Dorothy Lund notes that Musk's repeated attempts to acquire OpenAI complicate the trial, stating,
"Musk has tried to take over OpenAI multiple times. He's been spurned. So it's not crazy to think his motives might be a little suspect here. Even the judge in this case, Judge Gonzalez Rogers, has called this out."
Colourful Details
The court is expected to hear testimony from several notable figures, including Microsoft CEO Satya Nadella, former OpenAI scientists Mira Murati and Ilya Sutskever, and former OpenAI board member Shivon Zilis, who is also the mother of four of Musk's children.
As attorneys debate which evidence and testimonies are admissible, some personal details about the billionaires have emerged. For example, the court has ruled that Musk's use of "rhino ket," a term used in Silicon Valley, will not be admissible.
Musk's legal team has attracted media attention as well. One of his lawyers reportedly works as a clown in his spare time, according to Business Insider, while another, who is also a Hollywood producer, was recently featured in Vanity Fair.
High Stakes
The trial carries significant consequences for Musk, OpenAI, and potentially the broader public.
As recently as late 2023, Musk advocated for a pause in AI development amid growing concerns about the rapid pace of technological advancement. Around the same time, Altman was briefly removed as OpenAI CEO due to allegations of misleading the board.
With xAI recently acquired by Musk's soon-to-IPO rocket company SpaceX, Musk is heavily invested in the competitive race toward AGI.
"If Musk wins, it could result in the defeat of a key competitor in the race to AGI," said law professor Rose Chan Loui, executive director of the Lowell Milken Center for Philanthropy and Nonprofits at UCLA. "Whoever wins that race will have a lot of power."
Chan Loui added that Musk is positioning himself as the appropriate representative to uphold the interests of OpenAI's non-profit arm, but expressed concerns about his impartiality given his leadership of a large AI company.
"Even though I'm appreciative of his elevating this issue in the public's eye, I think a lot of us worry that he's not actually unbiased, given that he runs his own very large AI company," she said.
Professor Federman emphasized the importance of the character of those bringing such claims, referencing her recent book Corporate Reckoning on executive accountability for corporate harm.
This trial unfolds as the public begins to confront AI's complex integration into daily life. Both Musk and Altman have been instrumental in bringing AI technologies to consumers.
The proceedings may provide new insights into their ambitions and intentions regarding the development of a technology now used by a growing segment of the global population.
In the analogy of King Kong versus Godzilla, "all the little people below are scrambling as these giants hit each other," said Federman. "One ultimately wins – but what's really left is this path that the rest of us have to live with."
for our Tech Decoded newsletter to follow the world's top tech stories and trends. Outside the UK? here.
