Law360 (April 28, 2026, 11:06 PM EDT) -- Billionaire Elon Musk testified in a California federal jury trial Tuesday that OpenAI executives Sam Altman and Greg Brockman illegally converted OpenAI into a for-profit company after he invested $38 million under the condition the ChatGPT-maker would remain a nonprofit, creating a potential precedent for "looting in every charity in America."

Musk took the stand after opening statements in the high-stakes trial, which kicked off with jury selection in Oakland, California, on Monday. Musk challenges OpenAI Inc.'s for-profit conversion and accuses the San Francisco-based company, which is currently valued at roughly $852 billion, and its executives of breaching its charitable trust and of unjust enrichment. He also accuses Microsoft Inc., which has invested billions into OpenAI, of aiding the alleged breach.

Musk's direct examination began with the tech billionaire telling jurors that the defendants were making a simple case more complicated than it sounds, but ultimately, "it's not OK to steal a charity, that's my view."

If OpenAI wins, Musk continued, it'll become case law across the country to allow "looting in every charity in America."

OpenAI's counsel quickly objected to the testimony, arguing that Musk's comments drew a legal conclusion, but U.S. District Judge Yvonne Gonzalez Rogers overruled the objection, while noting Musk is not a lawyer, and his opinions are his own.

The objection reflected the parties' combative tone throughout the first full trial day. The day began with OpenAI's counsel complaining outside the presence of the jury that overnight, Musk had been posting to his 240 million followers on his social media platform X Corp. "inflammatory" statements about the trial.

Musk, who wore a black suit and black tie, was soft-spoken, but defended himself directly, telling the judge that he only posted in response to OpenAI's own public statements about the trial. The judge asked if all parties would agree to stop making public statements, so she won't have to issue a gag order.

"Beginning today, keep it minimal," the judge said. "Let the process work ... All of you try to control your propensity to use social media. Let's just try it, gentlemen, and see if we can make this work."

The trial then proceeded to Musk's opening statements, during which Musk's counsel Steven F. Molo of MoloLamken LLP told jurors that Musk had invested into OpenAI based on his understanding that it was being set up as a nonprofit for the "benefit of mankind as a whole, unconstrained by the need to generate a financial return." But in the process of converting to a for-profit, Altman and Brockman enriched themselves and breached the charity's founding principles, Molo said.

"It wasn't a vehicle for people to get rich," he said.

Molo said jurors will see evidence showing Altman and Brockman repeatedly reaffirmed their commitment to the nonprofit structure, including Altman's September 2017 email to Musk in which Altman wrote, "I remain enthusiastic about the nonprofit!"

However, during OpenAI's openings, William Savitt of Wachtell Lipton Rosen & Katz told jurors that Musk's claims are ultimately an effort to suppress AI competition, and stem from his "sour grapes" over not getting to control OpenAI after its board rebuffed his efforts in 2021.

"This infuriated Musk," Savitt told jurors. "He literally grabbed his stuff and stormed out."

Savitt told jurors that trial evidence will show that Musk initially agreed to donate $1 billion into OpenAI, but only invested a fraction of his initial offer, and he was secretly planning to poach OpenAI's best employees to work at his own lab. Emails will also show Musk had repeatedly suggested OpenAI be converted to a for profit, Savitt said.

Savitt insisted that OpenAI "remains a nonprofit," and its for-profit arm was created "precisely because that structure serves its mission." Savitt added that Musk waited too long to sue and only did so after he created his own rival AI company, xAI Corp., in 2023, which Savitt said is further evidence that Musk is merely trying to suppress competition.

"Mr. Musk didn't start coming up with his claims until he realized OpenAI might be worth a lot of money," Savitt said. "That's when the sour grapes started."

Microsoft's counsel, Russell P. Cohen of Dechert LLP, similarly told jurors Musk's claims are time-barred, and added that the alleged breach occurred before Microsoft began funding OpenAI in 2019, so Microsoft could not have known it was aiding an alleged breach.

Cohen said jurors will see evidence during trial showing that Microsoft's chief technology officer even questioned whether OpenAI's donors were aware of its for-profit conversion plans. But Microsoft conducted due diligence, vetting OpenAI's documents and OpenAI's board stated that they weren't violating anyone's rights, Cohen said.

During OpenAI's and Microsoft's opening statements, Musk appeared stern-faced, listening with his head down, resting against his left hand, as he occasionally took notes. On the stand Tuesday, Musk maintained his soft-spoken demeanor, but appeared more at ease, occasionally mumbling and briefly smiling as he recalled certain exchanges.

Musk claimed OpenAI was founded in 2015 after he became convinced there needed to be a "counterpoint" to Google's for-profit AI business, which he noted at the time had all of "the money, computers and people." Musk said his idea for an AI nonprofit arose after Google co-founder Larry Page mocked him in front of a dozen others at a dinner party for caring about AI safety, and accused him of being a "species-ist," which Musk defined as a person who cares more about humanity than AI.

"My perspective on OpenAI, in a nutshell, is the reason OpenAI exists is because Larry Page called me a species-ist for caring about humanity," Musk said.

Musk said he had been "extremely concerned" about AI safety and even met with then-President Barack Obama to discuss it in 2015. Musk testified that he doesn't recall when specifically he met Altman and Brockman, but both were invited to dinners at his house to discuss AI safety, and neither were well known in the tech industry at the time.

That fall, the trio, along with former Google computer scientist Ilya Sutskever, created OpenAI Inc. as a 501(c)3 nonprofit, and Musk agreed to invest $38 million. He said the name came from its mission to develop open source AI to benefit humanity.

"I came up with the idea of the name, recruited key people, taught them what I know, and gave them all initial funding," Musk said. "I could have started it as a for-profit, and I specifically chose not to."

Musk also personally called Microsoft CEO Satya Nadella asking to use its computers for AI safety. Testifying Tuesday, Musk recalled with a smile what he said Nadella told him: "'The only reason he's in this thing is because of me.' Those are his words."

Although OpenAI functioned as a nonprofit for years and the executives discussed creating a for-profit arm solely to benefit the nonprofit, Musk said by 2017 he was getting annoyed by Altman's and Brockman's requests for equal equity shares in OpenAI. He testified the requests were "unfair and inappropriate" since he had provided the initial funding, and, in an email, Musk wrote that Altman and Brockman should go start their own company, and "I've had enough."

After jurors left for the day, Judge Gonzalez Rogers noted that OpenAI's counsel Savitt had suggested during openings that OpenAI didn't get its name from its mission promoting open-source AI. But the judge said the argument contradicts both Musk's testimony and OpenAI's position in a separate trademark infringement case that she recently presided over.

In light of the apparent contradiction, the judge suggested that Savitt talk to OpenAI's IP counsel at Quinn Emanuel Urquhart & Sullivan LLP, and take into account OpenAI's prosecution history before the Patent Trial and Appeal Board.

"And I would suggest you do not take inconsistent positions in front of me," Judge Gonzalez Rogers said.

The judge's remark drew a smile and quiet nods from Musk sitting at counsel table.

The trial and Musk's direct examination will continue Wednesday morning.

Musk is represented by Steven F. Molo, Walter H. Hawes IV, Alexandra C. Eynon and Robert K. Kry of MoloLamken LLP and Marc Toberoff of Toberoff & Associates PC.

The OpenAI parties are represented by William Savitt and Sarah K. Eddy of Wachtell Lipton Rosen & Katz.

Microsoft is represented by Russell P. Cohen, Nisha Patel and John A. Jurata Jr. of Dechert LLP.

The case is Elon Musk v. OpenAI Inc. et al., case number 4:24-cv-04722, in the U.S. District Court for the Northern District of California.

--Editing by Emily Kokoll.

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