Microsoft chief executive Satya Nadella is set to appear before a federal jury in Oakland on Monday, testifying in Elon Musk’s lawsuit against OpenAI. The case centers on a series of internal Microsoft emails that, according to Musk’s counsel, demonstrate how the tech giant’s 2019 investment helped shift OpenAI from a nonprofit research lab to a for‑profit AI powerhouse.
Musk alleges that OpenAI betrayed its original charitable mission and misused the $38 million he provided at its founding to build an enterprise now valued at more than $850 billion. He is seeking a court order that would force OpenAI to revert to nonprofit status, a move that could reshape the competitive landscape that includes rivals such as Anthropic, Google and China’s Deepseek. OpenAI counters that Musk left the organization after failing to obtain a controlling stake and now competes with it through his own venture, xAI.
Nadella’s testimony will precede that of OpenAI chief executive Sam Altman, who is expected to sit for questioning later in the week. The trial, which has already exposed internal tensions among Silicon Valley engineers, investors and executives, is moving toward a verdict from an advisory jury by the week of 18 May. Judge Yvonne Gonzalez Rogers has indicated she will give weight to the jury’s recommendation when issuing a final ruling on liability and any remedies.
Musk’s lawyers will argue that Microsoft’s 2019 $1 billion investment – the first of a total $13 billion that now translates into a stake worth roughly $228 billion – was made with full knowledge that OpenAI was transitioning toward a profit‑driven model. They will cite a January 2018 email in which Nadella wrote that he could not determine the specific research OpenAI was conducting, but noted Musk’s belief that the firm was on the cusp of a major artificial‑general‑intelligence breakthrough. At the time, Microsoft CTO Kevin Scott expressed doubts that OpenAI might “storm off to Amazon” if the partnership did not meet expectations.
The emails also reveal discussion of a discounted Azure cloud‑computing arrangement for OpenAI, suggesting Microsoft’s support was contingent on the prospect of commercial gain. In the months that followed, a cash‑strapped OpenAI created a for‑profit subsidiary to attract external capital, paving the way for Microsoft’s later infusion of funds.
Testimony last week from OpenAI co‑founder Greg Brockman – whose stake is valued at about $30 billion – added fuel to the proceedings. Brockman’s 2017 diary entries, in which he wrote about “making money for us,” were highlighted by Musk’s lawyers as evidence of a profit‑focused mindset. Brockman also told attorneys that Musk had threatened him in 2017 after the entrepreneur’s request for absolute control of OpenAI was denied.
The outcome of the case could have far‑reaching implications for OpenAI’s planned initial public offering and for the broader AI sector, where the race for compute resources and talent intensifies. On Wednesday, Musk announced a partnership with Anthropic, allowing the rival firm to use compute capacity at SpaceX’s largest data centre – a development that underscores the shifting alliances within the industry.
As the trial draws to a close, stakeholders across the technology ecosystem will be watching closely to see whether the jury finds wrongdoing and how Judge Gonzalez Rogers ultimately adjudicates the matter. The decision will likely influence not only OpenAI’s corporate structure but also the future of private investment in AI research worldwide.
