Why Elon Musk sued OpenAI (Musk’s version)

TL;DR: The Musk vs. Altman showdown kicked off yesterday with Musk casting himself as a defender of OpenAI’s original charitable mission. But emerging evidence about his own actions during his time at the company and a personal track record on philanthropy that’s drawn years of scrutiny complicate the story he’s trying to sell.

What happened: The civil trial against OpenAI and its leaders began in Oakland, California, with opening statements and Musk on the stand (he’s back for a second day today). The framing was clear from the jump: The lawsuit isn’t about clawing back money or time for Musk, who co-founded OpenAI and says he put in $38 million worth of “free funding” with reassurances the company would stay a nonprofit. It’s about holding execs accountable, with Musk’s team arguing they “stole a charity” by turning the company into a for-profit one.

The charity savior: Of the 26 original claims in the lawsuit, only two still survive: breach of charitable trust and unjust enrichment. Santa Clara law professor Edward Lee tells Tech Brew it’s not unusual for plaintiffs to pare down their claims—but what’s surprising is that Musk dropped fraud from the list days before the trial began, even asking the court in early April to route any damages to OpenAI's nonprofit arm, not himself. “That was no doubt a strategic move because it sounds much better than a lot of money going back to the richest man in the world,” says Lee.

It also strengthens Musk’s posture as the defender of a nobler mission. If OpenAI wins, he testified, “the entire foundation of charitable giving in America will be destroyed.” It’s the kind of lofty, “saving humanity” narrative we’ve seen from the SpaceX founder before, who once argued his for-profit businesses count as “philanthropy.”

Citation needed: The tale Musk weaves sits awkwardly against his actual record and criticism of charity—he’s said in the past that philanthropy is “extremely difficult” if you “care about the reality of goodness instead of the perception of it.” Most of the Musk Foundation’s recent giving has flowed back to his own orgs, and for years his foundation has failed to give away the 5% of assets required to keep its tax-exempt status.

OpenAI’s defense argues Musk’s real motive isn’t broken promises but hurt feelings over not getting majority control of the company and the CEO seat. “We’re here because Mr. Musk didn’t get his way at OpenAI,” its lead counsel told the jury yesterday. He showed jurors emails between Musk’s then-dual chiefs of staff weighing a for-profit restructure that would have handed Musk a 55% stake—and Altman 7.5%. (Plenty more convos and diary entries—some extremely embarrassing—have already emerged from the trial.) Musk clarified yesterday that he wasn’t “averse to a small for-profit that would provide funding” to OpenAI “as long as the tail didn’t wag the dog.”

Bottom line: Whether Musk really cares about OpenAI’s nonprofit status may be tangential to the ruling, says Lee. But evidence that he offered to be CEO or backed a for-profit arm “could undermine his claim of any breach of charitable trust.” —WK