Musk Seeks $150 Billion in Damages, Accuses OpenAI of Abandoning Nonprofit Roots

Context Musk, a co‑founder of OpenAI, testified for a second day in a federal trial in California. He said he lost confidence that Sam Altman, another co‑founder, would keep the organization true to its 2015 nonprofit charter. Musk left OpenAI in 2018 after investing roughly $38 million during its early years.

Key Facts - Musk claims Altman tried to “steal the charity” in late 2022 and that the allegation proved correct. He is asking the court to force OpenAI back to nonprofit status, remove Altman and co‑founder Greg Brockman from leadership, and award $150 billion in damages to OpenAI’s charitable arm. - OpenAI’s lawyers counter that no binding promise existed to remain a nonprofit and that the lawsuit is a competitive tactic to aid Musk’s own AI venture, xAI. - The company now operates as a public‑benefit corporation, a hybrid structure that allows profit‑seeking activities while claiming a societal mission. - OpenAI is preparing for an initial public offering that could value the firm at about $1 trillion, according to market estimates. - Microsoft, a major investor in OpenAI, is also named in the suit, though its role in the alleged mission shift is not detailed in the complaint.

What It Means If a court awards Musk’s requested damages, the payout would flow to OpenAI’s charitable foundation, potentially reshaping the firm’s funding model. A ruling that reinstates nonprofit status could force OpenAI to divest its for‑profit arm, jeopardizing its ability to raise capital for large‑scale computing resources. Conversely, a dismissal would reinforce the legality of OpenAI’s transition to a profit‑driven model and clear the path for its trillion‑dollar IPO. The outcome will also signal how aggressively founders can challenge governance changes in fast‑moving AI startups.

Looking Ahead Watch for the judge’s ruling on the motion to compel OpenAI’s restructuring and any settlement talks that could affect the timing of the IPO.