Updated April 30, 2026 at 10:43 AM EDT
Elon Musk, of Tesla, SpaceX and DOGE fame, said in court on Wednesday he was "a fool" for putting money into the artificial intelligence company OpenAI, which started off as a nonprofit but later created a for-profit arm.
Musk is suing OpenAI, CEO Sam Altman and others, claiming, as his attorney put it, that they "stole a charity." OpenAI was founded in 2015 as a nonprofit to develop AI for the benefit of humanity. Musk left its board in 2018 after a disagreement about how to structure and run the for-profit arm created to raise money and attract top talent.
Musk is now seeking the ouster of Altman and OpenAI president Greg Brockman, and the rollback of the for-profit structure, moves that could radically alter the competitive landscape for artificial intelligence.
On Tuesday, Musk's lead attorney had argued that the nonprofit had been stolen, despite promises to Musk that OpenAI would remain true to its nonprofit principles.
OpenAI's lead lawyer, on the other hand, contended that this is a simple case of sour grapes, with Musk attacking a rival because he is unhappy that OpenAI thrived after he left in 2018 following a disagreement about leadership. He launched his own competing company, xAI, in 2023.
Testifying in court for a second day on Wednesday, Musk said establishing a company like OpenAI as a nonprofit gave it "the moral high ground. I guess there's sort of a halo effect." He added, "there's some value" in having a lab that develops "digital superintelligence" to be nonprofit.
"But what you can't do is have your cake and eat it too," reaping the "good association" with being a nonprofit and then switching to a for-profit model, Musk said.
Under questioning from his own attorney, Musk said his faith in OpenAI following its original mission had three phases. The first was when he was "enthusiastically supportive," the second when he became "a little uncertain" that OpenAI was straying from its original mission, and a third developed once he felt "they were looting the nonprofit."
"We are currently in phase three," Musk said.
At issue was a 2020 agreement with Microsoft that came with an investment from that company and would give it exclusive license for OpenAI's for the product. "This does seem like the opposite of 'open,'" Musk said.
According to Musk, Altman reassured him via text message that the product would remain open and available to all.
But Musk said when he learned about a later investment by Microsoft of $10 billion, he was disturbed and felt that the charitable trust had been violated because the size of OpenAI had grown beyond that of a charity. He said he felt Microsoft's investments indicated it expected a potentially large return, and he was concerned that Microsoft could come to control the development of artificial general intelligence, or AGI, a hard-to-define level of capability in which AI matches or exceeds humans.
"With all due respect to Microsoft, do you really want Microsoft controlling artificial general intelligence?" Musk said.
"I reacted quite negatively," to the investment, he said, adding "I texted Sam Altman and said 'What the hell is going on?" or something to that effect."
"The reality is that OpenAI had become, with all intents and purposes, a for-profit company with a $20 billion valuation." The nonprofit, which still exists and owns the for-profit company, had become secondary, he argued.
He said he did not accept equity because he felt it was not OK for a nonprofit to have a valuation or equity holders.
"Frankly, it felt like a bribe," he said of Altman's offer to him at the time to take an equity stake.
A heated cross examination
In an at-times testy cross examination, OpenAI's lead lawyer, William Savitt, tried to undermine Musk's credibility, highlighting the notion that Musk had ample opportunity to object to Microsoft's involvement and multi-billion dollar investments before launching the lawsuit in 2024.
When asked why he hadn't sued after leaving the board in 2018, Musk replied, "I would have sued sooner if I thought the charity had been stolen sooner."
When questioned about plans to create a for-profit arm of OpenAI, Musk said he was not opposed to a for-profit entity being launched, as long as it served the nonprofit and had a structure that capped the potential profit of investors.
"What's at issue here is that the for-profit has become the main thing," he said.
Musk was asked about an email he sent to Altman and others amid the discussions about who would run the for-profit entity. Musk said he felt entitled to have "initial control" and the largest portion of shares since he provided much of the funding that got OpenAI off the ground.
"Basically, if they want to get rich, they should go do so as a for-profit. But what they should not do is have me continue to fund a nonprofit and get rich off of that," Musk told the jury. "I actually was a fool who created free funding for them to create a startup. I literally was."
Later, he said: "I gave them $38 million of essentially free funding which they then used to create an $800 billion for-profit company."
Savitt also delved into Musk's email and text exchanges from the time, including some from Shivon Zilis, who was then on the OpenAI board and is the mother of four of Musk's children. Savitt used these texts to try to make the point that Zilis fed Musk information about the company after he departed — and that when she asked if she should continue to do so, he said yes.
Musk agreed that Zilis facilitated communication between him and OpenAI. At other times, he expressed frustration with Savitt's questions when it came to fine details. "Your questions are not simple. They are designed to trick me, essentially," he said.
Savitt pressed the point that Musk had pledged $1 billion in funding for OpenAI but didn't come close, only contributing $38 million. Musk pushed back, saying he contributed, among other things, his reputation.
"These things have value," Musk said, adding that he believed his contributions of money and other intangibles exceeded $100 million.
Musk's testimony will continue on Thursday.
Microsoft is a financial supporter of NPR.
Copyright 2026 NPR
