OpenAI CEO Testifies Musk Sought Majority Control in Governance Lawsuit

Legal Dispute Over OpenAI’s Governance

Sam Altman, OpenAI‘s CEO, said Elon Musk wanted majority control of the AI startup. The case has drawn global attention, focusing on Musk‘s claims that Altman and OpenAI abandoned their nonprofit mission to serve humanity. Altman argued Musk, now a rival with xAI, aimed to take over OpenAI‘s commercial operations. This isn’t just a personal conflict—it’s an important issue over how AI companies are governed.

OpenAI’s Founding and Structure

“Musk said the nonprofit mission was undermined by the for-profit model.”

Founded in 2015 as a nonprofit, OpenAI was co-founded by Musk and Altman with the aim of creating advanced AI that benefits everyone. In 2019, the company created a for-profit subsidiary to fund its research. This dual structure is central to the legal fight, with Musk saying the nonprofit mission was undermined by the for-profit model. The nonprofit arm, OpenAI LP, controls research, while the for-profit subsidiary, OpenAI Inc., handles commercialization. This setup has let the company grow but also created tensions over priorities and decision-making.

Musk’s Motives: Beyond Control

Musk claims the lawsuit is about restoring OpenAI‘s original mission, but critics say his real motive might be competition. OpenAI‘s chairperson, Bret Taylor, testified separately that OpenAI received a takeover offer from a Musk-backed consortium in February 2025. This proposal, seeking to buy the nonprofit with for-profit investors, felt contradictory to the lawsuit’s goals. Musk‘s legal team has also questioned Altman‘s honesty, citing testimony from former OpenAI officials who said Altman fostered a toxic culture of lying. These claims highlight the industry’s struggle to balance innovation with accountability, as Musk‘s xAI and Anthropic‘s Claude both position themselves as alternatives to OpenAI‘s ChatGPT.

Historical Precedent: Microsoft’s Legal Battle with OpenAI

The current trial mirrors earlier conflicts involving Microsoft and OpenAI. In 2024, Microsoft faced a similar lawsuit over its investment in OpenAI, with critics saying the company prioritized profit over ethical AI development. The case ended in 2025 with a settlement that restructured OpenAI‘s governance, creating a precedent for resolving similar disputes. This history suggests the current trial could shape how AI companies balance profit motives with public responsibility. For example, the 2025 settlement required Microsoft to give up some control over OpenAI‘s research, a move that might influence the current case’s outcome. This shows the fragility of dual nonprofit-for-profit models in AI startups, where competing interests often clash.

Future Implications for OpenAI

“Altman argued Musk, now a rival with xAI, aimed to take over OpenAI's commercial operations.”

If Musk wins, OpenAI‘s planned IPO by the end of 2026 could be delayed or canceled, impacting its global competitiveness. The case also raises questions about whether dual nonprofit-for-profit structures can work in AI startups. As the trial continues, the outcome could set a key precedent for how AI companies balance profit motives with public responsibility. This case highlights the complexities of governing cutting-edge technology, with effects that go beyond the courtroom. For instance, if Musk‘s demands for control are upheld, OpenAI might have to restructure its governance model, potentially shifting power toward for-profit interests at the expense of its nonprofit mission.

Uncertainties and Competing Interpretations

A key unresolved question is whether Musk has legal standing to file the lawsuit. Legal analysts note that while Musk was a co-founder, his departure from OpenAI in 2024 complicates his claim to represent the company’s original mission. Additionally, the jury’s interpretation of looting a charity remains subjective, with some experts arguing Musk‘s focus on commercial success doesn’t inherently violate the nonprofit’s mission. For example, a 2025 paper from the Harvard Journal of Law & Technology suggests corporate governance models must adapt to balance competing interests, and the current case could set a precedent for how such conflicts are resolved. This ambiguity highlights the broader challenge of defining ethical responsibility in AI development, where profit motives and public good often clash.