Elon Musk admits no written agreement existed for his $38 million OpenAI donation

Musk Says No Written Agreement for His Early Donation to OpenAI

Elon Musk acknowledged there was no written agreement or contract with OpenAI regarding the terms of his donation to the company when it was first founded as a nonprofit research organization more than a decade ago. Under questioning from OpenAI attorney William Savitt, Musk said he did not have his representatives prepare a document to lay out the conditions for the money he committed to OpenAI in its early days. Asked again whether he had done so, Musk said he "reviewed the corporate charter, which said it is a nonprofit." "At the end of the day, you can't steal a charity," he said, repeating his refrain from earlier in his testimony. The tense questioning kicked off Musk's third day of testimony in a closely watched trial over his claims that OpenAI betrayed its altruistic mission in pursuit of profit. In the lawsuit he filed in 2024, Musk alleged that Sam Altman, OpenAI's chief executive officer, and Greg Brockman, its president, have enriched themselves by converting the company to a for-profit business with billions of dollars in support from Microsoft Corp. OpenAI and Altman have accused Musk of harassment and say the real goal of the lawsuit is to undercut competition with his own startup that he co-founded in 2023, xAI. When announcing its launch in 2015, the nonprofit said Musk committed to eventually donating as much as $1 billion to its mission to develop artificial intelligence for the "benefit of humanity." In a post on X in 2023, Musk wrote that he had donated $100 million. The actual amount was far less. "In strict monetary terms, I contributed $38 million," Musk said this week. Much of Musk's testimony to date has been about his falling out with OpenAI's leaders as they explored strategies to line up sufficient funding to compete with Alphabet Inc.'s Google and other pioneers in the AI space that were operating as for-profits. Musk left OpenAI's board in 2018 and went on to launch xAI as a for-profit five years later. xAI's flagship chatbot, Grok, is known for its irreverant responses and previously ignited a global uproar for generating non-consensual explicit photos. OpenAI's lawyer asked Musk whether he believes his companies -- including SpaceX and Tesla Inc. -- are good for society, pointing at how he's posted about AI and robots being beneficial for humanity. Musk replied yes to all. "There are many possible futures. Some futures are good and some are not good," he said. "It is better to err on the side of optimism." Musk also said xAI has "partly" distilled some of OpenAI's technology for developing its own models by using their AI to validate and compare chatbot responses. Bloomberg News has reported that xAI engineers have also used Anthropic's models for coding. Before Musk returned to the stand, his attorney Steven Molo argued with US District Judge Yvonne Gonzalez Rogers over whether an expert witness could testify about potential existential risks from AI, including human extinction. Gonzalez Rogers rejected his argument. "It is also ironic that your client, despite these risks, is creating a company that's in the exact space," she said. "I suspect there are plenty of people who don't want to put the future of humanity in Mr. Musk's hands. But it doesn't matter. We aren't going to get into those issues."

Musk calls himself 'a fool' on the stand for funding OpenAI

The tense day three of Musk v. Altman saw OpenAI's lead attorney William Savitt use Musk's own emails, pledge shortfalls, and Shivon Zilis texts to argue the lawsuit is a competitive grievance dressed as a charitable principle. Elon Musk called himself "a fool" for funding OpenAI, accused its leadership of "looting the nonprofit," and clashed repeatedly with the company's lawyer in a tense cross-examination in Oakland federal court on Wednesday. The day's proceedings. day three of the four-week trial of Musk v. Altman, were the most combative yet, as OpenAI's lead trial attorney William Savitt methodically tried to turn Musk's donations, emails, and personal relationships against his own charitable trust argument. "I gave them $38 million of essentially free funding, which they then used to create an $800 billion for-profit company," Musk told the jury. "I actually was a fool who created free funding for them to create a startup. I literally was." The statement was striking: Musk's own legal framing has positioned him as a deceived donor rather than a failed corporate power play, and calling himself a fool reinforces that framing for the jury. But Savitt was quick to probe the gap between Musk's $38 million in actual donations and the "up to $1 billion" he had pledged when OpenAI was founded. "Without me, OpenAI wouldn't exist!" Musk shot back, raising his voice when Savitt pressed him on the funding shortfall. Musk argued that beyond money, he contributed his reputation, contacts, and credibility, "These things have value", and that his total contribution exceeded $100 million in intangible terms. Judge Yvonne Gonzalez Rogers at one point intervened as Savitt flagged to the court that Musk was proving "difficult" to get direct answers from. "That is the challenge of all litigants," the judge replied. The most damaging material Savitt deployed came not from OpenAI's own records but from Musk's personal communications with Shivon Zilis, a venture capitalist who was then on OpenAI's board and is also the mother of four of Musk's children. Savitt presented a 2018 email in which Zilis asked Musk whether she should remain close to OpenAI in order to "keep feeding him information on the company." Musk confirmed he agreed she should. He also confirmed that Zilis facilitated ongoing communication between him and OpenAI after he departed the board. Savitt's second Zilis exhibit was more structurally significant: an email from Zilis to Sam Teller, who worked for Musk, describing two ways OpenAI's structure could change, "Roll everything into a B corp," or "OpenAI C Corp and OpenAI nonprofit." Savitt's argument was direct: Musk was presented with for-profit restructuring options and considered them. Asked whether he had ever instructed Zilis to file paperwork converting OpenAI to a for-profit corporation, Musk replied: "I don't recall." Savitt then put his sharpest question of the day: "You were never really committed to OpenAI being a nonprofit, were you, Mr. Musk?" Musk disputed the premise. But the jury now has two structurally contradictory pictures: a donor who claims he was deceived about the nonprofit status, and a co-founder who was actively considering for-profit conversions in internal communications. Under questioning from his own attorney on redirect, Musk testified about the sequence of events that drove him from scepticism to lawsuit. It was Microsoft's $10 billion investment, not the initial for-profit structuring, that he identified as the decisive violation. "At a $10 billion scale, there's no way Microsoft is just giving that as a donation or any kind of charitable way," he said. "I texted Sam Altman and said, 'What the hell is going on?', something to that effect. I think I said, 'This is a bait and switch.'" He also raised the safety argument that has been central to Musk's public positioning since he filed the lawsuit in 2024. Asked whether a for-profit AI company creates a safety risk, he said: "Yes, I think it creates a safety risk." Savitt countered that Musk couldn't actually know what OpenAI's safety practices look like from the outside. "You just don't know," Savitt said. Musk acknowledged he did not know the specifics of OpenAI's internal safety work but maintained that the for-profit structure itself was the concern: "It does worry me that a nonprofit suddenly is a for-profit with unlimited profit." Savitt also pressed Musk on xAI directly, asking whether Grok "lags much farther behind" ChatGPT. Musk acknowledged that xAI, now absorbed into SpaceX, has "very small market share" and is "much smaller" than OpenAI today, while insisting xAI is only "technically" a competitor. The implication was unmistakable: that a man building a direct AI competitor to OpenAI is using the courts to slow it down, dressed in the language of charitable principle. Savitt told the court he expected to complete his cross-examination of Musk for approximately one further hour on Thursday, after which Musk's team planned to call Jared Birchall, the family office executive who manages Musk's personal wealth. OpenAI president Greg Brockman was given 48 hours' notice to testify and may also appear on Thursday, depending on the length of Birchall's session. The stakes of the trial have not diminished. As we reported at the outset, the most damaging exhibit in the entire case may not be anything from Musk's cross-examination but Greg Brockman's 2017 diary entry, in which he wrote: "I cannot believe that we committed to non-profit if three months later we're doing b-corp then it was a lie." Judge Gonzalez Rogers cited that entry directly in her January ruling that sent the case to trial. The advisory jury's finding on liability will inform, but will not bind, the judge's decision on remedies, which could include up to $134 billion returned to the nonprofit and the forced removal of both Altman and Brockman from OpenAI.

Elon Musk Just Got Badly Humiliated in Court

Can't-miss innovations from the bleeding edge of science and tech Elon Musk helped birth OpenAI in 2015, a world-changing AI non-profit which he lavished with tens of millions of dollars alongside its now-CEO Sam Altman. Now in 2026, he's suing to unwind the entire project with a civil suit, claiming that Altman betrayed the nonprofit's mission by turning it into a profit-seeking machine -- nevermind the fact that Musk also runs his own for-profit AI company, xAI. The civil trial, taking place in San Francisco, pits two of tech's most powerful egos against each other in a duel for control over the broader AI ecosystem. That being the case, it's already devolved into a circus just days into the case, with the erratic Musk emerging as a key liability in his own proceedings. During day three of the trial, Elon Musk struggled to present a confident front, which led to a number of unforced errors. One of his major blunders came when the billionaire claimed that "Tesla is not pursuing AGI," or artificial general intelligence, the north star for American AI developers broadly defined as the point at which AI reaches human-level intelligence. That might seem like a no-brainer -- Tesla is an electric vehicle company, after all -- but it stands in direct contradiction to Musk's own comments not even two months earlier. "Tesla will be one of the companies to make AGI and probably the first to make it in humanoid/atom-shaping form," Musk wrote on X-formerly-Twitter as recently as March 4, 2026. That comment was even entered as an exhibit in the court case, officially enshrining Musk's lies into the judicial record. The blunders didn't stop there. At one point, Musk was asked if he was romantically involved with the Canadian venture capitalist Shivon Zilis, with whom the billionaire shares four kids. "I think so," Musk replied on the witness stand. Later, Musk admitted that he "did not read the fine print" of an OpenAI term sheet Altman had sent his way back in 2018, as the billionaire stepped away from the company's board. "It's a four-page document," the opposing lawyer retorted. As Hard Reset reporter Alex Shultz noted, Musk could have easily skimmed the document before he took the stand, but must have decided his time would be better spent elsewhere. It all paints a rather dithering picture of Musk, who can't be bothered to do even the bare minimum preparation for his lawsuit where the stakes are, in his attorney's words, the "good of humanity as a whole."

Elon Musk Is Probably Going to Lose the OpenAI Case

Sign up for the Slatest to get the most insightful analysis, criticism, and advice out there, delivered to your inbox daily. A new scale of humiliation ritual kicked off this week as Elon Musk's lawsuit against OpenAI went to trial in Silicon Valley. The Tesla CEO, who co-founded OpenAI, is suing the artificial intelligence firm and two of its other co-founders, Sam Altman and Greg Brockman, for diverting from its original nonprofit goal of developing A.I. for the public good in favor of for-profit motives. "This lawsuit is very simple: It is not OK to steal a charity," Musk said on the witness stand on Tuesday. The trial is big by every conceivable measure. Both Musk and OpenAI have mustered high-dollar legal armies who are prepared to wage potentially years of litigation, including this federal trial. Millions of dollars are being lit on fire each week it unfolds, and the fight is over sums that are similarly astronomical: Musk is seeking more than $130 billion in damages, as well as the removal of Altman and Brockman from the company, and a return of OpenAI to a pure nonprofit position. The jury's decision could change the very future of Silicon Valley and the future of tech throughout the world forever. But it probably won't. Winning, at least in the legal sense, doesn't appear to be Musk's main goal. What the trial offers him is an opportunity: a very public forum in which to challenge OpenAI's story, drag its leadership through potentially embarrassing discovery and testimony, and inflict as much pain as possible on his rivals. In Musk's telling, it went like this: He helped launch OpenAI as a nonprofit in 2015 because he was so afraid of the implications of artificial general intelligence that he wanted to make sure there was a firm out there ensuring that it benefits "all of humanity." Keeping OpenAI as a nonprofit, and not driven by shareholder interests, was meant to ensure that it acted as a transparent and safety-oriented counterweight to companies like Google's DeepMind that were developing A.I. in a closed, profit-driven way. This is where it starts to get muddied. As it turned out, training bleeding-edge, frontier A.I. models was very expensive. As costs rose, the nonprofit idea started to look more and more like a barrier to helping the company achieve its goals, since it limited its ability to raise money. Meanwhile, according to OpenAI, Musk wanted more control of the firm and proposed folding it into Tesla. Tensions rose and Musk eventually left OpenAI's board in 2018. Things were quiet for a while. OpenAI began steadily drifting from its nonprofit mission by allowing outside investment, including a partnership with Microsoft in 2019. Musk went off to focus solely on making humans a multiplanetary species (just kidding: he became a right-wing troll during the pandemic and bought Twitter instead). Then OpenAI launched ChatGPT in 2022, transforming the A.I. firm into a household name overnight. Musk launched his own xAI the following year, and positioned himself as an outright rival to his old nonprofit. By 2023, the fractures between Musk and OpenAI were much more apparent. He criticized it for being a "closed source" for-profit company. Of course, he also blasted it for being too "politically correct" and "woke." The situation came to a critical mass in 2024 when Musk sued OpenAI for diverging from its nonprofit mission. Following this, on X, he regularly excoriated Altman for "stealing a charity" and dubbed him "Scam Altman." That brings us to the present day, where Musk's lawsuit has made its way into an Oakland courtroom where he's unlikely to win. Legal experts largely agree that Musk's case doesn't have a snowball's chance in a data center of winning. For one, the billionaire has limited leverage here. His money can only get him so far -- he's not a regulator or the California attorney general, officials typically responsible for enforcing nonprofits' obligations. The judge allowed the case to go to trial based on a narrow exception, rooted in a 1964 precedent, that allows a donor with "special interest" to sue a nonprofit to make sure donated money is used for its intended purpose, if the AG was too busy to step in. Even then, Musk's core argument that OpenAI "betrayed the mission" is legally shaky. There's no contract that said OpenAI had to remain a nonprofit forever. There's also documentation that shows Musk himself, at various points, entertained for-profit structures. As he has a habit of doing, he's making a massive financial decision mostly based on vibes. So why is he doing this? We know that Musk can be vain and vindictive. He has a long history of turning personal grievances into public spectacles. He paid a premium for a social media platform and remade it in his own image. He's used that same platform to lob explosive accusations at critics and allies alike, blowing up a professional and personal relationship with President Donald Trump by tying him to the Epstein files. It's also why he baselessly accused a British diver of being a pedophile after he criticized his misguided effort to help a group of Thai children stuck in a flooded cave (yes, remember that?). His case against OpenAI follows this pattern: a messy, high-stakes conflict waged more in the court of public opinion than the actual courtroom. That's the point of all this. It's not the money or the nonprofit status. It's to drag OpenAI and its other founders through the mud until they come out the other side as dirty as he is. After all, dirt is sure to emerge. As the case proceeds, internal communications -- emails, text messages, DMs -- are going to surface that won't make anybody look good, least of all Musk. Already, the case is a less-than-flattering look at the Tesla CEO, with jury selection complicated by the fact that "people don't like him." During his testimony and cross-examination on Tuesday and Wednesday, he looked petty and pugilistic, offering answers inconsistent with his deposition and quibbling with defense attorney William Savitt over yes-or-no questions for hours. "I have never been more sympathetic to Sam Altman in my life," Elizabeth Lopatto, senior writer for the Verge, wrote after sitting through five hours of testimony from Musk. What is unfolding in the Oakland courtroom is less a trial about a nonprofit's mission and more an attempt at humiliation underwritten by the wealthiest man in the world, who is more chips than shoulder. He's somebody who knows the power of public perception. He's a lot like his old boss in the White House in that regard. Both men are keenly attuned to (and wield immense power over) digital and public media. Musk is one of the few people wealthy enough to casually throw this kind of money after a grievance. Plus, there's a reason he's focusing his ire on Altman. OpenAI represents something that Musk has rarely had to contend with: a success story that outgrew him. Not only did the company continue after he left, but it flourished. Its flagship product, ChatGPT, has become shorthand for A.I. itself. It's the kind of cultural and commercial breakthrough that we haven't seen since the iPhone -- and it happened largely without him. For a figure who is synonymous with the industries he touches -- spaceflight, electric cars, social media -- OpenAI's rise and dominance carry an uncomfortable implication: One of the most consequential technological shifts of our time can happen beyond his reach -- and without his name and face attached to it. No wonder he's trying to hang on.

The Real Stakes Behind Elon Musk's Showdown with Sam Altman

A California trial examines whether OpenAI's evolution into a for-profit giant violated its founding commitments and investor trust. With the trial underway for Elon Musk's lawsuit against OpenAI CEO Sam Altman and president Greg Brockman, judges and jurors are weighing a central question: Can a company that began as a nonprofit later evolve into a for-profit enterprise without violating its original mission? Musk, an OpenAI co-founder and the owner of its rival, xAI, argues the answer is no. His sweeping demands reflect that view: the world's richest person is seeking financial damages, a return to OpenAI's original structure and a legal determination on whether its models are approaching artificial general intelligence (A.G.I.). Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters Musk said his concern for OpenAI reached a breaking point when OpenAI received a $10 billion investment from Microsoft in 2022. "By late 2022, I'd lost trust in Altman, and I was concerned that they were really trying to steal the charity," he said on the stand yesterday (April 29). "It turned out to be true." Musk's own ventures, including xAI, SpaceX (which acquired xAI in February for $250 billion) and Tesla, are all for-profit, yet Musk argued in court that his companies are all "socially beneficial." xAI, founded in 2023, has already secured a $200 million contract with the U.S. Department of Defense for its Grok model. Like OpenAI, it is pursuing AGI. The outcome of the case now rests with Judge Yvonne Gonzalez Rogers and a nine-person jury, who have been instructed to disregard the public personas and fortunes of the two billionaires. Musk is worth over $775 billion, and Altman is worth roughly $3.4 billion. SpaceX and OpenAI are both expected to go public this year, which could further inflate their net worth. Musk v. Altman: the gist OpenAI was founded in 2015 as a nonprofit, with Musk serving as co-chair and early investor. Court filings show he invested more than $44 million over five years, though his testimony has varied. He said in court he "donated" $38 million through 2019, despite previously claiming $100 million in a deposition. The company shifted to a "capped-profit" model in 2019 and became a public benefit corporation (PBC) in October 2025. Its nonprofit arm, the OpenAI Foundation, now holds a 26 percent minority stake in OpenAI Group PBC. Musk wants OpenAI to revert to its original nonprofit structure. Altman and OpenAI argue the lawsuit is driven by rivalry and Musk's failed 2018 attempt to gain control of the company. According to OpenAI, Musk had previously pushed to convert the organization into a for-profit entity and even proposed merging it with Tesla. In court, Musk has been described as "combative," particularly during exchanges with OpenAI's lead counsel, William Savitt. At one point, he said Savitt's questions were "designed to trick me." Musk will conclude his testimony today. His family office manager, Jared Birchall, will testify after him. Additional witnesses may include Brockman and UC Berkeley computer science professor Stuart Russell. Altman is expected to take the stand later. The trial is expected to run through late May. Musk's demands Musk's claims span financial, structural and technical issues: More than $150 billion in damages from OpenAI and Microsoft, based on his contributions, alleged "ill-gotten gains" and punitive damages tied to claims of deception. Structural changes requiring OpenAI to return to its founding nonprofit model, which he argues was intended to develop open-source A.I. for the public good. He is also seeking to halt OpenAI's for-profit operations until those changes are made. Much of the alleged "founding agreement" is based on informal communications, which are being tested in court. A legal determination on whether OpenAI's models, including GPT-4, are approaching AGI. This question intersects with OpenAI's partnership with Microsoft, whose commercial agreements exclude AGI. Microsoft and OpenAI ended their exclusive partnership at the start of the trial, weakening Musk's related claim that those agreements should be voided. Despite the scope of Musk's demands, experts say a forced return to nonprofit status is unlikely. "OpenAI has signed contracts with Microsoft, Nvidia and hundreds of vendors," said Noah Kenney, head of tech advisory firm Digital 520. "It has employees holding equity and billions in committed investor capital. You can't simply unwind a public benefit corporation that two state attorneys general already approved." Even if Musk prevails, Kenney said the most likely outcome is financial damages awarded to the nonprofit, not a restructuring. Still, the case could have lasting implications. Future A.I. startups that begin as nonprofits may face greater scrutiny over governance and mission alignment. "The trial doesn't pause the technology," Kenney said. "It changes how the companies behind it are structured. That's the real ripple effect."

Elon Musk Admits xAI 'Partly Distilled' OpenAI Models: What Do Prediction Markets Say About The Lawsuit?

Elon Musk took the stand Thursday, accusing OpenAI of stealing a charity before he admitted that his own AI startup, xAI, had "partly" distilled OpenAI's models to build Grok. The Tesla Inc. (NASDAQ:TSLA) CEO is suing OpenAI for $150 billion in damages, alleging the start-up betrayed its founding nonprofit mission. Under cross-examination from OpenAI lead counsel William Savitt on day three of the federal trial in Oakland, Musk was asked whether xAI had distilled OpenAI's models. "Generally AI companies distill other AI companies," Musk replied. Pressed for a yes or no, he answered "partly." Distillation, the practice of using one AI model to train another, is banned by OpenAI's terms of service. Bloomberg has separately reported that xAI engineers have leaned on Anthropic models for coding. Musk vs Scam Altman The animosity between the two former co-founders has been hard to miss. Musk has taken to calling Sam Altman "Scam Altman" on X, and is seeking his removal from the OpenAI board alongside a reversal of last year's for-profit conversion. Musk acknowledged on the stand that there was no written agreement laying out the terms of his donation to OpenAI, but argued: "At the end of the day, you can't steal a charity." One of the more telling moments came when Musk told the court "we are not pursuing AGI right now," referring to Tesla's AI work. Savitt then produced an exhibit of a March 4 post from Musk's X account, in which he wrote that Tesla "will be one of the companies to make AGI and probably the first to make it in humanoid/atom-shaping form." Microsoft Caught In The Crossfire Microsoft Corp. (NASDAQ:MSFT) is also a defendant in the case. Musk's lawyers argue that Microsoft enabled OpenAI's alleged breach of charitable trust through its $13 billion in investments and its cloud partnership. A jury verdict against OpenAI could force a reversal of the start-up's for-profit conversion and may delay an IPO that could value the company at up to $1 trillion. That would scramble Microsoft's AI roadmap, given the bulk of its commercial AI offerings rest on OpenAI's models. Polymarket Traders See Musk Losing The "Will Elon Musk win his case against Sam Altman" contract on Polymarket prices his odds at just 42% Yes, down a couple of percentage points since the case started. Kalshi's similar market has Musk winning at 55%. Each market has different win conditions, Polymarket has a higher bar for Musk to clear, which explains the discrepancy. Judge Yvonne Gonzalez Rogers blocked Musk's lawyers from introducing expert testimony on AI extinction risk Thursday. In doing so, she took a swipe at the Tesla CEO, remarking that "plenty of people do not want to put the future of humanity in Mr. Musk's hands." Altman, Microsoft CEO Satya Nadella and former OpenAI CTO Mira Murati are all slated to testify later in the trial, which is expected to run roughly four weeks. Image: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.