OpenAI Trial: Altman Testifies That Elon Musk's Departure Lifted Employee Morale

On the morning of May 12, 2026, Sam Altman walked to the witness stand in Judge Yvonne Gonzalez Rogers's courtroom in Oakland, California, and offered a characterization of his co-founder's departure that distilled the bitterness at the heart of this case: Elon Musk leaving OpenAI's board in 2018, Altman testified, was a "morale boost" for some of the company's researchers [1].

The claim is striking — and contested. It arrived during the third week of Musk v. Altman, a civil trial that has become the most consequential legal battle in the short history of the AI industry. At stake is not merely the $130 billion-plus in damages Musk is seeking, but the legitimacy of OpenAI's transformation from a small nonprofit research lab into an $852 billion commercial juggernaut preparing for a public offering [2][3].

What Altman Said — and What It Means

Altman testified that Musk's management style "demotivated" OpenAI researchers during his 2015–2018 tenure on the board [1]. He described a specific incident in which Musk instructed Greg Brockman, OpenAI's president, and Ilya Sutskever, then chief scientist, to rank the company's researchers and fire many of them. Altman said this directive "did damage to the company" [1].

The "morale boost" comment was directed at Musk's eventual exit from the board — framed by Altman as a relief for staff who had been working under what he portrayed as an erratic and demanding patron. But this framing serves Altman's legal interests. His defense depends on establishing that Musk was a disruptive force whose departure cleared the way for the organization to fulfill its mission more effectively.

Musk's legal team has presented a different narrative. During his own testimony in the trial's first week, Musk described three phases of his relationship with OpenAI: initial enthusiasm, growing concern about mission drift, and his current conviction that Altman and Brockman have been "looting the nonprofit" [4]. Musk called himself "a fool" for investing in OpenAI, and said he had rejected equity offers that felt "like a bribe" [4].

The Legal Claims: Billions in Disgorgement

The four claims that survived to trial are unjust enrichment, fraud, constructive fraud, and breach of charitable trust [5]. Musk is asking the court to order disgorgement — the return of profits gained through alleged wrongdoing — in amounts ranging from $65.5 billion to $109.4 billion from OpenAI, and $13.3 billion to $25.1 billion from Microsoft, OpenAI's largest investor and technology partner [6].

Source: Court filings, CNBC

Data as of May 1, 2026CSV

Beyond monetary damages, Musk has sought injunctive relief: specifically, the unwinding of OpenAI's 2025 conversion to a public benefit corporation and the removal of both Altman and Brockman from their leadership positions [6]. Most legal observers expect Judge Gonzalez Rogers to issue a narrower remedy if Musk prevails, with structural changes likely reserved for appeal or settlement [5].

The procedural posture is notable. The case is being tried before a jury, an uncommon arrangement for claims rooted in charitable trust law. Four of the original claims were dismissed before trial, but the remaining four give Musk enough legal surface area to threaten OpenAI's corporate structure [5].

The Money Trail: $38 Million, or $100 Million?

One of the trial's central factual disputes concerns the value of Musk's contributions to OpenAI. The documented financial record shows five quarterly grants of $5 million between 2016 and 2017, roughly $12.7 million in rent payments for OpenAI's office space through 2020, and the provision of four Tesla vehicles to key employees — totaling approximately $38 million [7][4].

Musk had originally pledged "up to $1 billion" to the nonprofit [7]. OpenAI has pointed out that he delivered less than 4% of that commitment. During cross-examination, Musk maintained that "$38 million is still a lot of money" and argued that the total value of his contributions — including his reputation and other intangibles — exceeded $100 million [4].

The legal question is whether these donations can be retroactively recharacterized as investments entitling Musk to an ownership stake. Musk's team argues he was promised a role in OpenAI's governance and strategic direction in exchange for his support. OpenAI counters that Musk received a tax deduction for charitable giving and is now seeking to convert a donation into equity [7].

Inside the Evidence: Emails, Texts, and Journals

Hundreds of pages of internal communications have been unsealed during the trial, providing an unusually detailed window into OpenAI's early governance [8]. These include email exchanges between co-founders, Slack messages among senior staff, personal journals, and text messages between Altman and former CTO Mira Murati from the 2023 leadership crisis [9].

Among the more revealing documents: on New Year's Day 2018, both Brockman and Sutskever sent Musk separate emails "profusely thanking him for his wisdom and guidance," with each BCC'ing the other — an arrangement that struck observers as coordinated flattery aimed at keeping their most important donor engaged [8].

Emails also showed that Musk had considered creating an AI lab within Tesla that would compete directly with OpenAI and potentially with Google's DeepMind [10]. Shivon Zilis, a former OpenAI board member and the mother of several of Musk's children, testified that Musk had offered Altman a seat on Tesla's board during this period [10].

Brockman's testimony added further texture. He told the court that Musk had demanded majority equity in a proposed for-profit arm of OpenAI, the right to choose a majority of board members, and the position of CEO. When these demands were rejected, Musk said "I decline" and stopped his regular donations within about six months [11][8].

Brockman also revealed that Musk had enlisted several OpenAI employees to perform months of unpaid work for Tesla, primarily on the Autopilot self-driving team, in 2017. And when Musk hired researcher Andrej Karpathy away from OpenAI, Brockman said Musk approached him afterward with "an apology and a confession" — neither Musk nor Karpathy had told Brockman the departure was planned [11].

Contradicting Voices: Sutskever, Toner, and Others

Altman's characterization of Musk's departure as broadly positive has not gone unchallenged. Former OpenAI employees testified for Musk's side, criticizing Altman's leadership and character [12].

Ilya Sutskever, who co-founded OpenAI and later played a central role in Altman's brief ouster in November 2023, testified that he spent months gathering evidence of what he described as Altman's "pattern of deception and poor management" [12]. "I simply care," Sutskever said from the witness stand. "I didn't want it to be destroyed" [12]. He framed the decision to remove Altman as an urgent move driven by concerns about leadership. Sutskever later voted to have Altman return and said he regretted the removal [12].

Former board member Helen Toner testified via video, stating that Sutskever had reached out to her to share concerns about Altman's leadership, which became "a starting point" for the board's decision to fire the CEO [12]. Former board member Tasha McCauley also appeared as a witness [12].

These testimonies complicate the picture Altman presented. While he framed Musk's departure as a net positive, multiple former colleagues — including people who worked closely with both men — have described deep concerns about Altman's own conduct that are independent of Musk's involvement.

Financial Entanglements: The $30 Billion Question

The trial has exposed financial relationships between OpenAI's leaders that raise questions about governance and self-dealing. Brockman disclosed under oath that his stake in OpenAI is worth close to $30 billion at the company's current $852 billion valuation [13].

Source: CNBC, Bloomberg, TechCrunch

Data as of Mar 31, 2026CSV

More significantly, Brockman revealed that Altman had given him a stake in Altman's family office in 2017 — an investment worth $10 million at the time. Brockman also holds stakes in two startups backed by Altman, as well as a percentage of Altman's family fund [13]. These layered financial ties between OpenAI's CEO and president have become central to Musk's argument that insiders enriched themselves at the nonprofit's expense.

Altman's own financial position has drawn scrutiny from beyond the courtroom. On May 8, 2026, House Oversight Committee Chair James Comer sent Altman a letter requesting information about potential conflicts of interest between his personal investments and his operation of the company [14]. The committee cited reporting that Altman had pursued deals that would benefit companies in which he held personal stakes, including nuclear fusion company Helion Energy [14].

Altman was briefly removed as CEO in November 2023, with potential conflicts of interest cited as one factor. The board created an audit committee to investigate, but its findings were never made public [14].

Legal experts note that these entanglements bear directly on the credibility of Altman's testimony about mission alignment. A CEO who stands to gain billions from a for-profit conversion has an obvious incentive to characterize that conversion as consistent with the organization's founding purpose.

The Nonprofit Conversion: Precedent and Scrutiny

OpenAI's transformation from a nonprofit research lab to a capped-profit entity — and its more recent conversion to a public benefit corporation — sits at the center of Musk's case. His core argument is that this structural change materially betrayed the terms under which donors and co-founders participated [6][15].

The steelman version of this argument is straightforward: OpenAI solicited tax-deductible charitable donations and recruited world-class researchers under a promise to develop AI for the broad benefit of humanity, outside the pressures of commercial competition. The conversion to a profit-seeking entity, Musk's lawyers argue, violated these commitments and transferred billions of dollars in value — built on nonprofit resources — to private shareholders [15].

Governance experts have drawn comparisons to the Blue Cross of California conversion in the 1990s, when a nonprofit health insurer transferred assets to a for-profit subsidiary and gave more than $3 billion in stock to foundations as compensation [15]. UCLA Law scholars have argued that the extraordinary circumstances required for a nonprofit to change its purposes do not apply to OpenAI [15].

A group of prominent researchers and legal scholars — including AI pioneer Geoffrey Hinton and Harvard law professor Lawrence Lessig — signed an open letter arguing that the restructuring would "eliminate essential safeguards, effectively handing control of, and profits from, what could be the most powerful technology ever created to a for-profit entity with legal duties to prioritize shareholder returns" [15].

California's attorney general has also examined the conversion. Public Citizen, the consumer advocacy group, has argued that any payments associated with the transformation must go to an independent charitable enterprise — not one controlled by OpenAI's current leadership [16].

The Microsoft Factor

Microsoft CEO Satya Nadella testified on May 11 that Musk never raised concerns directly with him about Microsoft's investment in OpenAI [17]. Nadella described the partnership as an evolving commercial relationship and said he had been concerned about Microsoft becoming "the next IBM" — a reference to the risk of missing the AI transition [18].

The Nadella testimony matters because Musk is seeking billions in disgorgement from Microsoft as well as OpenAI. If Musk's legal theory depends on proving that the Microsoft investment corrupted OpenAI's nonprofit mission, the fact that he never raised objections to Microsoft's CEO undermines the narrative of a donor blindsided by commercial betrayal.

What Comes Next

The trial is expected to continue for several more weeks. The outcome will shape not only OpenAI's corporate future — including its planned IPO, with Goldman Sachs, JPMorgan, and Morgan Stanley reportedly acting as underwriters for a potential Q4 2026 filing [3] — but also the broader legal framework for nonprofit-to-commercial conversions in the technology sector.

The case has already produced a trove of internal communications, financial disclosures, and under-oath testimony that will be studied for years. Whether a jury finds that OpenAI breached its charitable trust or that Musk is a disgruntled donor seeking to rewrite history, the trial record has established that the founding of the world's most valuable AI company was built on a set of commitments that its leaders now interpret in fundamentally incompatible ways.

The morale boost Altman described may have been real for some OpenAI researchers in 2018. But eight years later, the question before the court is whether the relief of losing a difficult board member justified — or merely preceded — the abandonment of the principles that brought them all together in the first place.