Elon Musk Testifies on Funding, Control Disputes in OpenAI Court Battle

Elon Musk’s Oakland testimony revealed new details about OpenAI’s internal control and funding disputes.

Elon Musk took the stand for more than seven hours in federal court in Oakland on June 17, 2024, responding to claims about the origins and mission of OpenAI. The legal dispute centers on whether OpenAI strayed from its nonprofit charter in pursuit of profit after forming a partnership with Microsoft.

• Musk co-founded OpenAI in 2015 but, according to testimony and 2017 emails presented in court, he sought majority voting power over the company. Emails show Musk indicating he would resume funding once given "formal control" over OpenAI.
• The court also heard that Musk withheld promised donations—totaling tens of millions of dollars—until OpenAI accepted his proposed terms on control and direction, details corroborated by The New York Times.
• Testimony on June 17 confirmed Musk approached OpenAI’s technical team about joining Tesla prior to leaving the nonprofit, raising concerns about staff poaching and board communication protocols.
• OpenAI’s transformation from a nonprofit to a capped-profit model, allowing outside investment by firms like Microsoft, sits at the center of Musk’s legal claims that its current direction diverged from the original charter.

Legal leaders note the case underscores how internal governance documents and board oversight must adapt as organizations pivot between legal structures. The transition of OpenAI, with rapid scaling and outside capital, highlights risks related to compliance, stewardship, and the formal communication of mission shifts. The case’s outcome may set precedent on how innovation-driven nonprofits manage control and transparency during major transitions.

Yes, but: The case still awaits a ruling, and public documentation of some testimonies remains contested by both sides.

What's next: Further court hearings are scheduled later in June as more OpenAI executives are called to testify.