A federal jury in Oakland, California will this week begin hearing one of the tech industry's most consequential contract disputes: Elon Musk's allegation that Sam Altman and OpenAI violated their founding agreement by converting the nonprofit artificial intelligence company into a for-profit enterprise worth approximately $1 trillion.
Jury selection begins Monday before Judge Yvonne Gonzalez Rogers, with the trial expected to last two to three weeks. The case centers on OpenAI's 11th year since its 2015 founding as a nonprofit, when Musk, Altman and other co-founders committed to advancing artificial intelligence "unconstrained by a need to generate financial return," according to the company's late 2015 mission statement.
The Contractual Dispute
Musk's 2024 lawsuit alleges that Altman, OpenAI's CEO, breached the founding agreement by restructuring the company and converting much of it to a for-profit enterprise. Musk is seeking remedies including removal of Altman and OpenAI president Greg Brockman, plus more than $134 billion in damages that he says should be redistributed to OpenAI's nonprofit arm. He also wants to reverse the company's restructuring as a for-profit entity—a move that would complicate its planned initial public offering.
Musk's complaint frames the dispute starkly: "Elon Musk's case against Sam Altman and OpenAI is a textbook tale of altruism versus greed." He alleges that Altman and other defendants deceived and manipulated him about the nonprofit structure, "preying on Musk's humanitarian concern." According to Musk's filing, once Altman and OpenAI secured approximately $38 million from him and advanced the company's technology, the company "flipped the narrative and proceeded to cash in" on lucrative deals with Microsoft and the creation of for-profit affiliates.
OpenAI has denied the allegations, contending that Musk agreed in 2017 that establishing a for-profit entity would be necessary for the company's future. The company's defense argues that Musk's funding was a tax-deductible donation to the nonprofit and does not entitle him to ownership. OpenAI also stated: "Elon has spent years harassing OpenAI through baseless lawsuits and public attacks." The company maintains a webpage titled "The truth about Elon Musk and OpenAI," characterizing Musk's case as a "smear" and "harassment" campaign.
The Financial Stakes
The case carries substantial implications for OpenAI's imminent public offering. In the 1st year of 2025, OpenAI gained final regulatory approval to restructure its main business into a for-profit corporation, though technically still overseen by the original nonprofit. The company's valuation near $1 trillion makes this among the highest-value disputes in recent tech litigation.
Musk's $38 million initial investment—made when the company was a nonprofit—forms the basis of his unjust enrichment claim. OpenAI's subsequent transformation into a highly profitable entity through Microsoft partnerships and other commercial ventures, followed by its planned IPO, underscores the financial magnitude of the structural change Musk contests.
The Personal and Professional Breakdown
Musk and Altman's relationship deteriorated significantly over time. Altman originally brought Musk into the project via email in May 2015, writing that it would be preferable for "someone other than Google" to develop advanced AI. The two co-founded OpenAI later that year and recruited leading AI researchers.
The relationship soured around 2017 after Musk grew impatient with progress and made a failed bid to exert more control. He left OpenAI's board in 2018 and stopped providing funding. In the 8th year since his departure, Musk has launched his own rival AI business.
During OpenAI's post-Musk years, it launched ChatGPT in the 4th year of 2022, raised tens of billions of dollars from Microsoft, and grew into one of the world's most valuable private companies. Altman became the public face of the AI boom and a technology industry power broker.
The feud has played out publicly. After ChatGPT's 2022 release, Musk called the chatbot "woke" and told Tucker Carlson on Fox News that OpenAI programmers were "training the AI to lie." On a podcast with tech journalist Kara Swisher, Altman described Musk as a "jerk." On X, Musk has called Altman a "liar," "swindler," and "Scam Altman," while Altman replied with "ambien tweeting is a dangerous game" and posted a screenshot of a cancelled $50,000 Tesla purchase. Musk responded: "You stole a non-profit."
The Legal Proceedings
A nine-person jury will hear Musk's breach of contract and unjust enrichment claims. Musk, Altman, and Microsoft CEO Satya Nadella are set to testify. Internal communications from Musk and key OpenAI executives will be presented as evidence.
Musk is represented by Marc Toberoff, a Hollywood lawyer known for dramatic courtroom presentations. Altman and OpenAI have retained the white-shoe law firm Wachtell, Lipton, Rosen & Katz.
Unsealed depositions have revealed contentious questioning. OpenAI's lawyers questioned Musk about his attendance at Burning Man and his use of "rhino ket," a strong drug cocktail including ketamine. They also deposed Shivon Zilis, an executive at Musk's brain implant company and mother of four of his children, about her romantic relationship with Musk. Zilis served on OpenAI's board from 2020 to 2023. Musk's legal team seeks to exclude this testimony as "inflammatory and highly irrelevant," while OpenAI's lawyers argue it should remain because it illuminates Musk's interpersonal relationships and "state of mind" during negotiations about the company's future.
In a January 2026 post on X, Musk wrote: "Can't wait to start the trial," adding "The discovery and testimony will blow your mind."
Why This Matters:
This trial represents a critical test of contractual enforceability in the technology sector, where foundational agreements between co-founders often determine long-term control and value distribution. The outcome will clarify whether nonprofit-to-for-profit conversions can proceed despite original contractual language emphasizing nonprofit status and humanitarian mission—or whether such conversions constitute breach of contract when they materially alter the company's structure and financial incentives. For investors considering OpenAI's upcoming IPO, the trial's verdict on Musk's $134 billion damages claim could affect the company's valuation and regulatory standing. The case also establishes precedent for how courts evaluate claims that founders were deceived about fundamental business model changes, a question increasingly relevant as venture-backed companies transition from nonprofit or mission-driven structures to commercial enterprises. The trial's outcome may influence how future technology founders negotiate governance rights and exit provisions in founding agreements.