The Messy Courtroom Drama Behind AI’s Next Chapter

BY JIM CARLTON, KEACH HAGEY

The legal showdown between Elon Musk and Sam Altman revealed the personal and financial fault lines beneath Silicon Valley’s defining boom.

AND ANGEL AU-YEUNG

Oakland, Calif.

U.S. DISTRICT JUDGE Yvonne Gonzalez Rogers opened the last day of testimony in the titanic trial between Elon Musk and Sam Altman’s OpenAI with a simple question: Should a trophy of a golden donkey’s backside be entered into evidence?

The judge held the statue in her hands with a bemused look. Dario Amodei, then a team lead for AI safety, had helped award it to a company intern years earlier, after Musk called the person a “jackass” for challenging him over AI safety at a company meeting.

“We think it’s pretty obvious this trophy has no relevance,” a lawyer for Musk said in court. Gonzalez Rogers opted to allow a photo of the statue given to Joshua Achiam, now OpenAI’s chief futurist, to be admitted.

The actual statue was put away before the jury of six women and three men could see it, although they were shown a photo. So went the landmark legal showdown between some of the most powerful players in AI. The three-week trial, now in the jury’s hands, was technically about allegations by Musk, the world’s richest man, that he was snookered into fronting OpenAI millions of dollars as a struggling nonprofit, only to see it morph into the world’s most powerful AI company. OpenAI argued it had to go commercial to fund its massive research needs, and that Musk supported such a move.

The proceedings revealed the mythmaking of AI’s seismic economic transformation, with heady talk of benefiting humanity and existential risk. It also exposed the AI boom’s underbelly: the grubby sidedeals, financial anxieties, short tempers and personal vendettas that have shaped modern technology every bit as much as the march toward machine consciousness.

Two days before the trial, Musk emailed OpenAI President Greg Brockman about a potential settlement offer. When Brockman suggested both sides drop their claims, Musk responded, “By the end of this week, you and Sam will be the most hated men in America. If you insist,

so be it,” according to legal filings.

Musk has asked that Altman be removed as CEO, among other requests, and is seeking up to $180 billion to be paid out from OpenAI’s for-profit arm to its nonprofit parent. He also wants OpenAI’s conversion to be unwound as part of the remedies in the case. If Musk is successful, it would greatly complicate OpenAI’s potential IPO—expected as soon as later this year.

The courtroom served as a kind of leveler in an increasingly oligarchic age. Several of those who came to testify were billionaires— including Musk and Altman—accustomed to private jets and private chefs. Yet they all had to remove their electronics and pass through the same metal detectors as everyone else.

In Silicon Valley, where dressing down is the ultimate symbol of tech’s disruptive power, nearly every executive who took the stand donned suits and ties. Brockman and Altman attended the proceedings nearly every day, sitting next to each other on benches behind the OpenAI defense table, at times taking notes. Halfway through the trial, Brockman started bringing a white pillow to sit on.

Musk entered with a team of security personnel. The judge scolded the billionaire at least twice—once for his social media usage and second for saying if he loses this case, it’ll mean trouble for all charities in America.

The courthouse has strict rules for everyone, such as a ban on taking any photos inside and leaving items unattended. An elderly spectator was booted from the nearby overflow room one day for snapping a souvenir photo, protesting as he was led away by marshals that he had arrived hours early to get his spot.

Lines to the courthouse in the early days of the trial snaked through the jasmine-scented courtyard in the Bay Area’s alwaysgloomy early mornings. It wasn’t just tech reporters, lawyers, staffers and protesters (one held a sign that read “Everyone sucks here except protesters and media”), but also curious onlookers, eager to use the democratic structure of a public court to get a front-row seat to history.

“If you come here early, you can see people like Musk and Altman testify, and they’re the future of the world,” said Kalid Meky, 55, who commuted from his home near San Jose for nearly a week to watch from a backbench.

Spectators sat transfixed in Courtroom One of the Ronald V. Dellums federal courthouse as witnesses painted a world of robots that can solve Rubik’s Cubes, eyepopping fortunes and worries over possibly unleashing a doomsday beast. The trial took onlookers back in time to the earliest days of the boom as OpenAI and Musk’s SpaceX now race to go public.

The legal arguments of the case have changed many times since Musk first sued OpenAI and its CEO more than two years ago. But they have always circled around the idea OpenAI betrayed its nonprofit mission when it created a for-profit subsidiary and took a major investment from Microsoft.

In the days before the trial, the more than 20 claims that Musk had leveled at Altman and his associates were whittled down to just two: breach of charitable trust and unjust enrichment. Musk boiled down his legal team’s main argument succinctly on the stand: “It’s not OK to steal a charity.”

His legal team’s broader point was about his place in AI history. OpenAI existed, he said, because of his own emotional connection to the human race.

He told the oft-repeated story of a conversation he had with his friend, Google co-founder Larry Page, about the future of AI. When Musk told Page that he would prefer that the AIs not wipe out all humans, Page accused him of being a “speciesist,” Musk testified.

“The reason that OpenAI exists is because Larry Page called me a speciesist,” Musk said. “That’s fundamentally it.”

Musk then teamed up with Altman, and later Brockman and famed AI researcher Ilya Sutskever, to create a nonprofit AI lab in 2015 that would be a counterweight to Google, which at the time employed most of the best AI researchers, he said.

Throughout the trial, Musk’s lawyers argued that only he had the reputation and capital to bring OpenAI into existence, even if he had multiple other day jobs at the time and left the OpenAI board a little more than two years after the company’s founding.

Altman acknowledged on the stand that Musk’s early support was critical for OpenAI’s success. Musk provided the bulk of funding in its early days—though the roughly $40 million he provided fell far short of the $1 billion he had publicly pledged.

The trial also showed Musk’s volcanic temper and mercurial side.

When OpenAI’s co-founders were negotiating a possible new for-profit structure in 2017, Brockman testified that Musk sent him and other co-founders Teslas ahead of a meeting about converting the nonprofit lab to a for-profit company that he would control. “It felt a little bit like he was buttering us up,” Brockman testified.

Musk arrived at the meeting with a painting of a Tesla as a gift, Brockman said, but after the group rejected his proposal to have a controlling share of the company, he grabbed the artwork and left.

Text messages between Altman and Shivon Zilis, Musk’s close associate and onetime OpenAI board member, who is the mother of four of his children, show the two strategizing on how to best manage Musk’s moods. After one particularly good late-night meeting, Musk ended the evening with what Altman described as “a long, long conversation about him showing us memes on his phone.” Altman also testified that Musk often had to be reminded of things, especially when he was upset.

The trial is just one front of Musk’s yearslong, multipronged attack on his onetime co-founders. His war against them ramped up after he founded his own rival AI company, xAI, in March of 2023, less than six months after OpenAI’s ChatGPT took the world by storm and kicked off the AI race.

Musk has used his megaphone on X, the social-media platform he owns that continues to serve as the town square of the AI industry, to routinely bash Altman as “Scam Altman” and to attack OpenAI.

The trial offered a fresh look at major moments in OpenAI’s history, including the “blip” when Altman was briefly ousted as CEO. In one text chain admitted as evidence, Altman, Microsoft CEO Satya Nadella and other Microsoft executives batted about potential members of the new board as part of negotiations for Altman’s return. Microsoft CTO Kevin Scott at one point vetoed former Google Cloud CEO Diane Green with “strong, strong no”—a bit of candor that went viral on social media.

It also laid bare new details of its operations, as well as elements of Altman and Brockman’s entanglements. An email from the lab’s early days revealed part of Brockman’s compensation was made up of equity paid from Altman’s family office, after the nonprofit ran out of shares of stock in the startup accelerator Y Combinator, which Altman ran at the time he co-founded OpenAI, according court documents.

In testimony, Altman confirmed that he owns substantial stakes in startups that have signed deals with OpenAI, including a third of Helion, a nuclear-energy startup. Altman said he recused himself from board discussions about Helion and OpenAI, which signed an agreement under which OpenAI would purchase electricity from Helion to power its infrastructure. He acknowledged, when pressed by Musk’s attorney, that he had participated in meetings about OpenAI’s computing needs while also serving as chairman of Helion.

Among the trove of evidence, from candid emails and private text messages to meeting notes, was Brockman’s private diary, which became something of a star witness.

Musk’s legal team never called Altman as a witness. But during cross-examination of Altman on Tuesday, Musk’s lawyer, Steven Molo, opened with a brutal barrage of questions about his character: “Are you completely trustworthy?” he asked. “I believe so,” Altman replied.

“But you don’t know whether you’re completely trustworthy?” Molo continued.

“I’ll just amend my answer to yes,” Altman replied.

A few beats later, Molo asked: “Do you always tell the truth?”

“I believe I am a truthful person,” Altman replied.

“That wasn’t my question, sir. Do you always tell the truth?” Molo asked again.

“I’m sure there’s some time in my life when I have not,” Altman replied.

Altman remained calm under the barrage, even as Molo pressed him on the testimony of other witnesses who had described him as a liar. Outside the courtroom, Musk was advancing on other fronts.

While the trial was under way, SpaceX announced a deal to lease computing power to OpenAI’s fiercest rival, Anthropic, which had found itself constrained after its Claude Code product took off.

While Altman was on the stand, Musk was also preparing to travel to China with President Trump. Musk, the onetime “First Buddy,” appeared to have re-entered the president’s inner circle, less than a year after their relationship appeared to have frayed.

The same day Musk boarded Air Force One, a group of Republican attorneys general and a congressional committee led by Republicans announced they were investigating Altman’s potential conflicts of interest that had been revealed by Wall Street Journal reporting.

So compelling was the clash of the titans that almost every day for two weeks, Lance Jackson got up at 4:40 a.m. at his home in Orinda, Calif., rode the BART to downtown Oakland and stood in line to watch the trial.

“This is really a seminal, critical trial that’s going to affect society,” the 73-year-old Jackson, a retired sketch artist. “You can see it already starting to happen with AI, we are really starting to snowball really quickly now.”

‘Do you always tell the truth,’ Steven Molo asked. ‘I’m sure there’s some time in my life when I have not’ Sam Altman replied.

‘The reason OpenAI exists is because Larry Page called me a speciesist’

—ELON MUSK

BEHRINGER/ REUTERS

VICKI ( 2)

A courtroom sketch shows Elon Musk speaking with Judge Yvonne Gonzalez Rogers during crossexamination by OpenAI attorney William Savitt as Sam Altman watches. Below, Greg Brockman being questioned by Musk attorney Steven Molo. Passages from Brockman’s diary were exhibits in the trial.