TL;DR
Jury selection begins Monday in Musk v. Altman, the federal trial over whether OpenAI’s nonprofit-to-profit conversion constitutes unjust enrichment and breach of charitable trust. Musk dropped fraud claims Friday to sharpen focus on the two remaining counts. The most damaging evidence is Greg Brockman’s 2017 diary entry calling the nonprofit commitment “a lie.” Judge Gonzalez Rogers found “ample evidence” and rejected nearly every dismissal attempt. The advisory jury will hear testimony from Musk, Altman, Nadella, Murati, and Sutskever, but the judge alone decides remedies, which could include $150 billion in damages and the unwinding 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 most valuable companies in the world 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 on two remaining claims: unjust enrichment and breach of charitable trust. He wants up to $150 billion in damages directed to the nonprofit arm, the ouster of Altman and Brockman from leadership, and a court order unwinding the for-profit conversion. On Friday, Musk voluntarily dropped his fraud and constructive fraud claims, narrowing the case from 26 claims to two but sharpening the focus on the question that has defined the dispute since it began: did OpenAI’s leadership promise a nonprofit and build a $852 billion company instead?
The evidence
The most damaging piece of evidence in the case is not an email from Sam Altman. It is a diary entry from Greg Brockman, OpenAI’s co-founder and president, written in 2017: “I cannot believe that we committed to non-profit if three months later we’re doing b-corp then it was a lie.” Judge Yvonne Gonzalez Rogers, who is presiding over the case and who will make the final ruling on remedies if the jury finds liability, cited that entry directly in her January 15 ruling that sent the case to trial. She found “ample evidence” supporting Musk’s claims and rejected “nearly every attempt by OpenAI and Microsoft to make the lawsuit disappear.” The ruling was a 28-page signal that the court considers the case serious enough for a jury to hear, which in itself is a significant validation of the underlying allegations.
Musk’s legal team has also produced a 2017 email in which Altman claimed he remained “enthusiastic about the non-profit structure” after Musk threatened to cut off funding, a statement that Musk’s attorneys frame as a misrepresentation designed to keep donations flowing while leadership privately planned a different path. Hundreds of pages of discovery materials unsealed from depositions in the autumn of 2025 include emails, texts, and Slack messages that Musk’s team says show leadership “said one thing publicly and planned something completely different privately.” A February 2023 text from Altman to Musk, sent after Musk had publicly criticised OpenAI, read: “You’re my hero and that’s what it feels like when you attack OpenAI.” The witness list reads like a Silicon Valley tell-all: Musk, Altman, Microsoft CEO Satya Nadella, former OpenAI CTO Mira Murati, co-founder Ilya Sutskever, and Shivon Zilis.
The defence
OpenAI has called the lawsuit “baseless” and described it as a “harassment campaign that’s driven by ego, jealousy and a desire to slow down a competitor.” The competitor is xAI, the AI company Musk founded in 2023 and recently merged with SpaceX in an all-stock transaction valuing the combined entity at $1.25 trillion. Musk’s own AI venture was folded into SpaceX in a $1.25 trillion all-stock deal that raised its own corporate governance questions, a fact OpenAI’s defence team will use to argue that Musk’s motivations are competitive rather than charitable. OpenAI contends that Musk left the board in February 2018, reneged on a larger planned donation, and has no standing to dictate the organisation’s structure years after his departure. Judge Gonzalez Rogers herself noted that “this country likes competition,” flagging the potential self-interest in Musk’s claims.
The structural defence is that OpenAI’s conversion was reviewed by attorneys general in both California and Delaware, that the nonprofit entity now operates as the OpenAI Foundation holding approximately 26% of the company’s valuation, roughly $130 billion, and that the Foundation retains oversight of mission alignment and the ability to appoint members of the for-profit board. The $25 billion commitment the Foundation announced when OpenAI completed its recapitalisation makes it one of the most well-endowed philanthropic organisations in the world. OpenAI argues this structure preserves the charitable mission while enabling the scale of investment required to pursue artificial general intelligence. Altman, Brockman, and Microsoft have all denied wrongdoing.
The structure
The trial structure is unusual. The nine-member jury’s verdict on liability will be advisory only. Judge Gonzalez Rogers, not the jury, will make the final determination on both liability and remedies. Opening arguments are expected Tuesday. The liability phase runs through mid-May. If OpenAI is found liable, the remedies phase begins May 18, where the court will consider Musk’s requests for damages, the ouster of leadership, and the unwinding of the conversion. The advisory jury format means that even a unanimous jury verdict does not bind the judge, but a strong jury consensus would carry significant moral authority in the judge’s deliberations.
Musk’s decision to drop the fraud claims on Friday was strategic, not a concession. Fraud requires proving intentional deception, a higher evidentiary bar that would have diverted the trial into arguments about Altman’s state of mind. Unjust enrichment and breach of charitable trust focus on outcomes rather than intent: did the conversion enrich insiders at the expense of the charitable mission, and did it violate the trust under which the nonprofit’s assets were held? These claims are easier to prove because the facts are largely undisputed. OpenAI was founded as a nonprofit. It converted to a for-profit. Its leaders hold equity in the for-profit entity. The question is whether that sequence constitutes a legal violation, not whether anyone intended it to be one. In his April 2026 amendment, Musk asked that Altman and Brockman be required to hand over “all equity and other personal financial benefits they obtained as a result of OpenAI’s for-profit operations” to the OpenAI charity.
The stakes
OpenAI’s $852 billion valuation is already facing scrutiny from its own investors over questions about its enterprise pivot and strategy shifts. The company raised $122 billion in its most recent round, is laying groundwork for a 2026 or 2027 IPO at a potential valuation of $1 trillion, and is projecting $14 billion in losses this year. The trial arrives at the worst possible moment for a company seeking public market credibility. At least 12 senior executives have left OpenAI since its conversion, with only two original co-founders remaining, a departure rate that includes the dismantling of OpenAI for Science and the shutdown of Sora, decisions that reinforce the argument that the conversion prioritised commercial revenue over the original research mission.
OpenAI quickly stepped in to fill Anthropic’s Pentagon contract with no usage restrictions after Anthropic refused the military work on principled grounds, a contrast that has become part of the broader governance debate about whether OpenAI’s “benefit all of humanity” charter 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 establish a precedent for startups to use nonprofit status for tax advantages before converting to for-profit. Public Citizen and the San Francisco Foundation have urged the California 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 trial is not only about OpenAI. It is about whether the nonprofit-to-profit conversion model is legally sustainable in AI. OpenAI was not the first technology organisation to start as a nonprofit and accumulate enormous value. Mozilla did. Wikipedia resisted. The question the Oakland courtroom will address over the next month is whether the people who built OpenAI with charitable donations and a stated commitment to benefit humanity can legally convert that work into an $852 billion for-profit enterprise and keep the equity. Musk says they cannot. Altman says the conversion serves the mission better than the original structure ever could. Brockman’s diary says it was a lie. The jury will hear all of it, and the judge will decide what it means.
