Musk v. Altman lawsuit begins for $150 billion over OpenAI’s nonprofit-to-profit

Jury selection begins Monday in Oakland federal court for a trial that will determine whether OpenAI’s transformation from a nonprofit to one of the world’s most valuable companies violated a charitable trust. Elon Musk, who co-founded OpenAI in 2015 and donated at least $38 million to it, is suing Sam Altman, Greg Brockman and OpenAI on two remaining claims: unjust enrichment and breach of charitable trust. It is seeking up to $150 billion in damages directed at the nonprofit arm, the ouster of Altman and Brockman, and a court order voiding the for-profit conversion. On Friday, Musk voluntarily dropped the fraud and constructive fraud claims, narrowing the case from 26 claims to two, but sharpening focus on the question that has defined the controversy since it began: Did OpenAI’s leadership promise a nonprofit and instead build an $852 billion company?

Proof

The most damaging piece of evidence in the case isn’t Sam Altman’s email. This is a 2017 diary entry from OpenAI co-founder and president Greg Brockman: “I can’t believe that if we’re dealing with a b-corp after three months, it’s a lie.” Judge Yvonne Gonzalez Rogers, who is presiding over the case and will make the final decision on remedies if a jury is found guilty, cited the entry in her Jan. 15 decision sending the case to trial. found “provided sufficient evidence to support Musk’s claims” and “rejected almost every attempt by OpenAI and Microsoft to dispel the claim.” The decision was a 28-page signal that the court deemed the case serious enough to be heard by a jury, which in itself is a significant endorsement of the underlying charges.

Musk’s legal team also produced a 2017 email in which it claims Altman remained “enthusiastic about the non-profit structure” after Musk threatened to cut funding. Hundreds of pages of discovery materials unearthed from the fall of 2025 include emails, texts, and Slack messages that Musk’s team said took the lead.he said one thing publicly and planned something completely different in private.“You’re my hero, and that’s what it feels like when you attack OpenAI,” read a February 2023 email sent from Altman to Musk after Musk publicly criticized OpenAI. The witness list reads like Silicon Valley: Musk, Altman, Microsoft CEO Satya Nadella, former OpenAI CTO Mira Murati, co-founder Ilya Sutskever and Shivon Zilis.

Defense

OpenAI called the claim “baseless” and described it as “a campaign of harassment driven by ego, jealousy and a desire to slow down a competitor”. Rival xAI is Musk’s AI company, which was founded in 2023 and recently merged with SpaceX, valuing the combined entity at $1.25 trillion. Musk’s own artificial intelligence venture has joined SpaceX in a $1.25 trillion all-stock deal. OpenAI’s defense team, which has raised its own corporate governance questions, will use it to argue that Musk’s motivations are more competitive than philanthropic. OpenAI alleges that Musk left the board in February 2018, declined a larger planned donation, and lacked the authority to dictate the organization’s structure years after his departure. Judge Gonzalez Rogers himself noted that “this country loves competition” and noted potential vested interests in Musk’s claims.

The structural defense is that OpenAI’s conversion has been reviewed by attorneys general in both California and Delaware, the nonprofit organization currently operates as the OpenAI Foundation, which owns about 26% of the company’s valuation, about $130 billion, and retains control over the Foundation’s mission alignment and the ability to appoint for-profit board members. $25 billion commitment announced by the Fund after OpenAI completes its recapitalization making it one of the best endowed charities in the world. OpenAI claims that this structure preserves its philanthropic mission while ensuring the scale of investment required to implement AI. Altman, Brockman and Microsoft have denied all wrongdoing.

Structure

The test setup is unusual. The nine-member jury’s decision on liability will be advisory only. Judge Gonzalez Rogers, not a jury, will make the final decision on both liability and remedies. Opening arguments are expected Tuesday. The responsibility phase lasts until the middle of May. If OpenAI is found liable, the trial begins on May 18, when Musk’s demands for compensation, the resignation of management and the cancellation of the coup will be heard. The deliberative jury format means that even a unanimous jury decision is not binding on the judge, but a strong jury consensus carries significant moral authority in the judge’s deliberations.

Musk’s decision to drop fraud claims friday It was not a concession, but a strategic one. Fraud requires willful deception, proving a higher evidentiary bar that would have focused the trial on arguments about Altman’s state of mind. Unjust enrichment and breach of charitable trust focus on results rather than intent: did the conversion enrich insiders at the expense of the charitable mission and violate the trust in which the nonprofit’s assets are held? These claims are easier to prove because the facts are largely undisputed. OpenAI was founded as a non-profit organization. Converted for profit. Its executives own shares in the for-profit enterprise. The question is whether this sequence is a legal violation, not whether someone intended it to be. In an April 2026 amendment, Musk required Altman and Brockman to turn over “all equity and other personal financial benefits from OpenAI’s for-profit operations” to the OpenAI charity.

stakes

OpenAI’s $852 billion valuation is already being scrutinized by its own investors on questions related to the main direction and strategy changes of the enterprise. The company raised $122 billion in its most recent round, setting the stage for an IPO in 2026 or 2027 at a potential valuation of $1 trillion, and predicts a loss of $14 billion this year. The trial comes at the worst possible time for a company seeking public market credibility. After OpenAI’s turnaround, at least 12 senior executives left, leaving only the two original co-foundersThe rate of departures, which included the dismantling of OpenAI for Science and the closing of Sora, decisions that bolstered the argument that the conversion prioritized commercial gain over its original research mission.

OpenAI moved quickly to fill Anthropic’s Pentagon contract with no usage restrictions A contradiction that has become part of a broader governance debate over whether OpenAI’s “for the benefit of all humanity” charter survives the conversion, after Anthropic renounced military work on principled grounds. Eyes on OpenAI, a coalition of more than 60 California nonprofits, separately argued that the restructuring agreement was “riddled with holes” and could set a precedent for startups to use their nonprofit status for tax advantages before generating revenue. Public Citizen and the San Francisco Foundation have called on the California attorney general to ensure that conversion payments go to a new, independent charity, rather than one controlled by the same management that approved the conversion.

The lawsuit isn’t just about OpenAI. At issue is whether the nonprofit-for-profit model is legitimately sustainable in AI. OpenAI wasn’t the first technology organization to start as a non-profit organization and amass great value. Mozilla did. Wikipedia resisted. The question an Oakland courtroom will decide over the next month is whether the people who founded OpenAI, with charitable donations and a commitment to benefit humanity, can legally turn the business into an $852 billion commercial enterprise and keep their capital. Musk says they can’t. Altman says the conversion serves the mission better than the original structure. Brockman’s diary says this is false. A jury will hear all of this and a judge will decide what that means.