Before Elon Musk left OpenAI in a power struggle in 2018, he wanted to merge the nonprofit artificial intelligence lab with Tesla, his electric car company.
Mr. Musk and other OpenAI co-founders met several times to discuss the merger. OpenAI’s chief executive, Sam Altman, was even offered a seat on Tesla’s board of directors, according to a court document.
But folding OpenAI into Tesla would have eliminated the lab’s nonprofit status, and that, Mr. Altman said on the witness stand on Tuesday, was something he wanted to avoid.
The question of whether OpenAI would be a nonprofit is the key point in a federal trial in Oakland, Calif., that pits Mr. Musk against the A.I. organization he helped create. Another question that took center stage in court on Tuesday was the trustworthiness of Mr. Altman, who was briefly pushed out of his job three years ago because OpenAI’s board thought he wasn’t always telling it the truth.
Mr. Musk sued OpenAI and Mr. Altman in 2024, claiming that it abandoned its founding agreement as a nonprofit group dedicated to building safe A.I. for the benefit of humanity. Mr. Musk has accused Mr. Altman of “stealing a charity” by attaching a for-profit company onto OpenAI’s original nonprofit and taking billions of dollars in investments from Microsoft.
The debate over who would guide the development of A.I. and whether Mr. Musk’s complaints about the change to its nonprofit status are disingenuous was also a focus during Mr. Altman’s two hours of testimony. Mr. Altman said it had become clear that Mr. Musk wanted to take complete control of OpenAI and repeatedly discussed how to turn it into a for-profit company. Merging it with Tesla was one of several options Mr. Musk offered.
“I believed that A.I. should not be under the control of any one person,” Mr. Altman said.
If OpenAI has had one consistent characteristic since it was founded in 2015, it is management drama as its corporate structure has changed over the years. Key executives and researchers have left — including the founders of the rival A.I. company Anthropic — because of personal feuds with Mr. Altman and others.
Mr. Altman testified about his feud with Mr. Musk. He said he had become worried that Mr. Musk, who provided the early investment money for OpenAI, wanted to take control of the lab.
He described what he called a “particularly harrowing moment” when his OpenAI co-founders asked Mr. Musk what would happen to his control of a potential for-profit when he died. Mr. Altman said Mr. Musk had replied that the control would pass to his children.
“I was not comfortable with that,” Mr. Altman said. When Mr. Musk lost a power struggle for control of the lab, he left, forcing Mr. Altman to find another big financial backer in Microsoft.
But Mr. Altman ran into trouble in 2023 when OpenAI’s board fired him because, as several of its members have testified in the trial, it didn’t trust him.
Steven Molo, Mr. Musk’s lead lawyer, homed in on Mr. Altman’s trustworthiness during an aggressive cross-examination.
“Are you completely trustworthy?” Mr. Molo asked.
“I believe so,” Mr. Altman answered.
After questioning Mr. Altman’s trustworthiness for nearly 20 minutes, Mr. Molo turned to Mr. Altman’s relationship with Mr. Musk.
Mr. Altman said that after he met Mr. Musk in the mid-2010s, Mr. Musk had occasionally expressed concern about the dangers of A.I. But Mr. Musk spent far more time saying he was worried that companies like Google would get ahead in A.I. development, Mr. Altman said. (Mr. Musk testified in the trial that he had wanted to create OpenAI to prevent Google from controlling the technology.)
Mr. Altman, the lawyer intimated, took advantage of Mr. Musk’s concerns and was never sincere about his own A.I. fears.
“Are you a person who just tells people things they want to hear whether those things are true or not?” Mr. Molo asked.
The lawyer also questioned whether Mr. Atman, who became a billionaire through years of tech investments, was self-dealing through OpenAI. Mr. Molo showed a list of Mr. Altman’s personal investments across a number of companies that stand to benefit from their association with OpenAI. They included Helion Energy, a start-up that has deals with Microsoft and OpenAI, and Cerebras, a chip maker in business with OpenAI.
Mr. Molo asked if Mr. Altman, who is on OpenAI’s board as well as its chief executive, would ever fire himself.
“I have no plans to do that,” Mr. Altman said.
OpenAI’s odd journey from nonprofit lab to what it is today — a well-funded, for-profit company that is still connected to a nonprofit called the OpenAI Foundation with an endowment that could be worth more than $130 billion — provided grist for Mr. Molo’s questions about Mr. Altman’s motivations.
He implied that Mr. Altman could have continued to build OpenAI as a pure nonprofit. But the only way to build such a valuable charity was to raise billions through a for-profit venture, Mr. Altman responded. Still, the giant sums being raised appeared to upset Mr. Musk.
In late 2022, according to court documents, Mr. Musk sent a text to Mr. Altman complaining that Microsoft was preparing to invest $10 billion in OpenAI. “This is a bait and switch,” Mr. Musk said at the time.
But Mr. Altman, under questioning from his own lawyers, said: “Every step of the way, I have done my best to maximize the value of the nonprofit. I would point out that there are not a lot of historical examples of a nonprofit at this scale.”
Mr. Musk is asking for $150 billion in damages and a court order that would unravel the for-profit company that OpenAI created last year, which is now valued at $730 billion. He also wants the court to remove Mr. Altman from the OpenAI board.
Before Mr. Altman took the stand, Bret Taylor, the board’s chairman, continued testimony that began on Monday. He discussed Mr. Musk’s efforts to buy OpenAI’s assets in 2024, which has become a contentious issue during the trial.
Mr. Taylor said the bid had surprised him because it seemed to contradict the aims of Mr. Musk’s lawsuit. He said the board rejected the bid because it was not in tune with OpenAI’s mission.
“We did not feel like it was appropriate for one person to control our mission,” he said.
(The New York Times has sued OpenAI and Microsoft, claiming copyright infringement of news content related to A.I. systems. The two companies have denied the suit’s claims.)
