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Founders to Feuders: Court Winner May Dictate the Future of OpenAI

ended 29. April 2026

The two men who co-founded a nonprofit AI lab together in 2015 are now in a federal courtroom in Oakland accusing each other of deception. Of the 26 claims Musk originally filed in 2024, only two remain: breach of charitable trust and unjust enrichment. 

Musk's lawyer told the jury he contributed roughly $38 million to OpenAI. It is now valued at $852 billion and heading for what could be a trillion-dollar IPO later this year. 

Musk wants up to $134 billion returned to OpenAI's nonprofit foundation and not to himself. He has also requested Altman and Brockman removed from leadership, and the for-profit conversion unwound. 

OpenAI alleges before he left the organisation, Musk knew about and supported the shift to for-profit. Their lawyer told the jury: "We are here because Mr Musk didn't get his way at OpenAI." Musk's lawyer told them: "Without Elon Musk, there would be no OpenAI, pure and simple." 

Musk testified that the consequences go beyond both of them. As he put it from the stand: “If we make it okay to loot a charity, the entire foundation of charitable giving in America will be destroyed.”

A coalition of more than 60 California nonprofits has already warned that OpenAI's conversion could set a precedent for startups to use charitable status for early-stage tax advantages before flipping to for-profit. 

Musk's lawyer asked the jury to keep three questions in mind:

  • Did OpenAI have a charitable mission to operate as a nonprofit, to develop safe AI, open source, for the good of humanity?
  • Did Altman and Brockman violate that mission through what they've done with the for-profit business?
  • Did Microsoft know about the charitable mission and substantially assist Altman and Brockman in breaching it?

OpenAI's lead lawyer William Savitt told the jury:

The trial started yesterday. It is expected to last for three weeks. A verdict is expected by mid-May.

We'd like your views:

  • If a donor can sue to reverse a nonprofit's restructuring years after leaving its board, what does that mean for every charity currently weighing whether to accept large individual donations?
  • Musk says he's not seeking personal gain. He runs a direct competitor. Does motive matter if the legal question is valid?
  • If the judge unwinds the conversion, OpenAI's IPO collapses. If she doesn't, the nonprofit-to-profit playbook gets a legal stamp. Which outcome concerns you more?

3 responses from the Newspage community

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Colette Mason
AI Ethics Consultant at Clever Clogs AI
This trial is the current conclusion of years of acrimony and public feuding between men who launched OpenAI together in 2015, before their relationship soured and they became rivals.

The uncomfortable truth neither side wants aired: both tried to control the organisation. Musk wanted majority interest in any for-profit arm. The other founders refused to hand the keys to one person. Musk left. Altman and Brockman restructured. Now a courtroom has to decide whether walking away means forfeiting standing, or whether a charitable donation carries permanent conditions regardless of who takes the business forward.

Musk's lawyer put it simply: it's okay for a museum to open a gift shop, but the gift shop can't loot the museum and sell the Picassos. That's the crux of this case.
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Editor
Katrina Young
Futurist | Chief Technology Officer CTO/CDO Ethical AI & Digital Transformation Strategist at KYC Digital
The Elon Musk v. Sam Altman trial is being framed as a founder dispute. The real issue is structural: what this means for charitable governance in frontier technology.

Two claims remain — breach of charitable trust and unjust enrichment. The court is not resolving personality or control, but whether assets built under a charitable mandate can move into a for-profit structure without breaching that purpose.

The signal is the response from over sixty California nonprofits. If conversions at this scale proceed without clear boundaries, charitable status risks becoming an early-stage positioning strategy rather than a long-term commitment.

Motive is debated. Structure is what endures. This case defines what becomes acceptable.
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Rohit Parmar-Mistry
Founder at Pattrn Data
This case should not be read as Elon Musk riding in to save the soul of OpenAI. He wants a claim on the upside, more use over the story, and a stronger hand in a market that is now worth fortunes. xAI is hardly some purer alternative. It also sits inside a broader empire where AI can inflate valuations, deepen platform control and widen political influence.

That does not make Sam Altman the principled counterweight. This looks less like a moral dispute and more like a power struggle between rival elites over who gets to shape the rules, the infrastructure and the government relationships around advanced AI.

The real issue is whether any organisation can wrap itself in public benefit language, then drift into private power without serious accountability. If that becomes normal, the public is not governing AI. Wealth blocs are.