TL;DR
Jury selection begins Monday in Musk v. Altman, the federal trial over whether OpenAI’s conversion from nonprofit to for-profit constitutes unjust enrichment and a breach of charitable trust. Musk dropped the fraud allegations on Friday to focus attention on the two remaining charges. The most damaging evidence is Greg Brockman’s 2017 diary entry calling the nonprofit commitment “a lie.” Judge González Rogers found “ample evidence” and rejected almost all attempts to dismiss. The advisory jury will hear the testimonies of Musk, Altman, Nadella, Murati and Sutskever, but the judge alone decides the solutions, which could include $150 billion in damages and the revocation of the conversion.
Jury selection begins Monday in Oakland federal court for the trial that will determine whether OpenAI’s conversion from a nonprofit to one of the world’s most valuable companies was a breach of charitable trust. Elon Musk, who co-founded OpenAI in 2015 and donated at least $38 million to it, is suing Sam Altman, Greg Brockman and OpenAI for two remaining claims: unjust enrichment and breach of charitable trust. He wants up to $150 billion in damages directed at the nonprofit arm, the ouster of Altman and Brockman from leadership and a court order undoing the for-profit conversion. On Friday, Musk voluntarily dropped his allegations of fraud and constructive fraud, reducing the case from 26 claims to two, but sharpening focus on the question that has defined the dispute since it began: Did OpenAI’s leadership promise a nonprofit and instead build an $852 billion company?
the evidence
The most damaging evidence in the case is not an email from Sam Altman. It is a diary entry by Greg Brockman, co-founder and president of OpenAI, written in 2017: “I can’t believe we committed to a non-profit, if three months later we do b-corp then it was a lie..” Judge Yvonne González Rogers, who is presiding over the case and who will make the final decision on appeals if the jury finds liability, cited that entry directly in her Jan. 15 ruling that sent the case to trial. She found “Ample evidence” supporting Musk’s claims and rejected “almost all of OpenAI and Microsoft’s attempts to make the lawsuit go away.”The ruling was a 28-page signal that the court considers the case serious enough to be heard by a jury, which in itself is a significant validation of the underlying allegations.
Musk’s legal team also produced a 2017 email in which Altman claimed he remained “enthusiastic about the nonprofit structure” after Musk threatened to cut off funding, a statement Musk’s lawyers frame as a misrepresentation designed to keep donations flowing while leadership privately planned a different path. Hundreds of pages of discovery materials revealed from statements in fall 2025 include emails, text messages and Slack messages that Musk’s team says show leadership.”He said one thing in public and planned something completely different in private.A February 2023 text from Altman to Musk, sent after Musk publicly criticized OpenAI, said: “You are my hero and that’s what it feels like when you attack OpenAI.” The witness list reads like a Silicon Valley exposé: Musk, Altman, Microsoft CEO Satya Nadella, former OpenAI CTO Mira Murati, co-founder Ilya Sutskever and Shivon Zilis.
the defense
OpenAI called the lawsuit “baseless” and described it as a “harassment campaign driven by ego, jealousy, and the desire to stop a competitor.” The competitor is xAI, the artificial intelligence company that Musk founded in 2023 and recently merged with SpaceX in an all-stock transaction that valued the combined entity at $1.25 trillion. Musk’s own AI company joined SpaceX in $1.25 trillion all-stock deal That raised its own corporate governance questions, a fact that OpenAI’s defense team will use to argue that Musk’s motivations are competitive rather than charitable. OpenAI maintains that Musk left the board in February 2018, defaulted on a major planned donation, and has no ability to dictate the organization’s structure years after his departure. Judge González Rogers herself noted that “this country likes competition,” pointing out possible self-interest in Musk’s claims.
The structural defense is that OpenAI’s conversion was reviewed by the attorneys general of California and Delaware, that the nonprofit entity now operates as the OpenAI Foundation and owns approximately 26% of the company’s valuation, approximately $130 billion, and that the Foundation retains oversight of mission alignment and the ability to appoint for-profit board members. The $25 billion commitment the Foundation announced as OpenAI completed its recapitalization makes it one of the best-endowed philanthropic organizations in the world. OpenAI maintains that this structure preserves the charitable mission while enabling the scale of investment necessary to achieve artificial general intelligence. Altman, Brockman and Microsoft have denied wrongdoing.
the structure
The structure of the trial is unusual. The verdict on liability of the nine-member jury will be of a purely advisory nature. Judge González Rogers, not the jury, will make the final determination on both liability and reparations. Opening arguments are expected Tuesday. The liability phase extends until mid-May. If OpenAI is found liable, the remedies phase begins on May 18, where the court will consider Musk’s requests for damages, removal from leadership, and revocation of the conversion. The advisory jury format means that even a unanimous jury verdict is not binding on the judge, but a strong jury consensus would carry significant moral authority in the judge’s deliberations.
Musk’s decision to withdraw fraud accusations Friday It was strategic, not a concession. Fraud requires proving intentional deception, a higher evidentiary requirement that would have shifted the trial toward arguments about Altman’s mental state. Unjust enrichment and breach of charitable trust focus on results rather than intent: Did the conversion enrich insiders at the expense of the charitable mission and violate the trust under which the nonprofit’s assets were held? These claims are easier to prove because the facts are largely indisputable. OpenAI was founded as a non-profit organization. It became a for-profit company. Its leaders own shares in the for-profit entity. The question is whether that sequence constitutes a legal violation, not whether anyone intended it to be. In his April 2026 amendment, Musk called for Altman and Brockman to be required to turn over “all equity and other personal financial benefits they obtained as a result of OpenAI’s for-profit operations” to the OpenAI charity.
What’s at stake
OpenAI’s $852 billion valuation already faces scrutiny from its own investors about questions about your business line and strategy changes. The company raised $122 billion in its most recent round, is laying the groundwork for an initial public offering in 2026 or 2027 at a potential $1 trillion valuation and is projecting losses of $14 billion this year. The trial comes at the worst possible time for a company seeking credibility in the public market. At least 12 senior executives have left OpenAI since its conversion, and only two original co-founders remain.an exit rate that includes the dismantling of OpenAI for Science and the closure of Sora, decisions that reinforce the argument that the conversion prioritized commercial revenue over the original research mission.
OpenAI quickly stepped in to fulfill Anthropic’s Pentagon contract without usage restrictions after Anthropic rejected military work on principled grounds, a contrast that has become part of the broader governance debate over whether OpenAI’s charter of “benefiting all humanity” survived the conversion. Eyes on OpenAI, a coalition of more than 60 California nonprofits, has separately argued that the restructuring deal is “full of holes” and could set a precedent for startups to use nonprofit status to gain tax advantages before becoming for-profit companies. Public Citizen and the San Francisco Foundation have urged California’s attorney general to ensure that conversion payments go to a new, independent charitable enterprise rather than one controlled by the same leadership that approved the conversion.
The test is not just about OpenAI. It’s about whether the model of converting nonprofits to for-profits is legally sustainable in AI. OpenAI was not the first tech organization to start as a nonprofit and amass enormous value. Mozilla did it. Wikipedia resisted. The question the Oakland court will address over the next month is whether the people who built OpenAI with charitable donations and a stated commitment to benefiting humanity can legally turn that work into an $852 billion for-profit company and retain capital. Musk says they can’t. Altman says the conversion serves the mission better than the original structure. Brockman’s diary says it was a lie. The jury will hear it all and the judge will decide what it means.
