Musk’s OpenAI lawsuit goes to trial, founder email reveals 51% stake claim

According to a report by The Verge on April 30, Elon Musk’s lawsuit against OpenAI, in which the jury is involved, began this week in the federal court in Oakland. The court displayed, in sequence, emails and founding documents from between 2015 and 2017. The materials included: a proposal by Musk to name the company Freemind, and a 2017 equity cap table showing his then-claimed ownership stake as high as 51.2%.

2015 founding consensus: email exchanges and a mission statement

According to The Verge’s April 30 report, emails from June 2015 shown in court indicate that Sam Altman proposed a five-point plan to Musk for establishing a company. The list of governance committee members included Altman, Musk, Bill Gates, Pierre Omidyar, and Dustin Moskovitz. The mission was defined as: “building the first AGI with the goal of empowering individuals.” Musk’s reply was: “Agree on all.”

In November of the same year, emails shown in court indicate that Musk proposed naming the company Freemind, and suggested that employees could convert their salary into SpaceX stock, citing that “SpaceX is a private company, so I can pretty much do whatever I want.”

A founding document dated December 8, 2015 shown in court states: “The purpose of the organization is to ensure that AGI benefits all of humanity. Not formed for the private interests of any individual.” Musk’s lawsuit argues that OpenAI’s later path toward commercialization departed from that commitment.

Emails from April 2016 shown in court indicate that Musk wrote to Nvidia CEO Jensen Huang, asking for OpenAI to purchase a supercomputer and emphasizing that “OpenAI has nothing to do with Tesla; it is a nonprofit organization funded by me and a few friends.” Huang replied: “I will make sure OpenAI gets one of them.”

2017 break in differences: 51.2% stake and “non-negotiable” terms

According to The Verge’s April 30 report, emails from August 2017 shown in court show that Musk’s chief of staff, Shivon Zilis, updated him about a meeting with Greg Brockman and Ilya Sutskever. The two co-founders proposed what they called “non-negotiable” conditions: “No matter what happens to the three (Greg, Ilya, Sam), there must be an agreement ensuring that after the initial 2 to 3 year period, control of AGI is distributed.”

An equity cap table from September 2017 shown in court (sent by Birchall, who managed the Musk family office) shows Musk’s ownership stake at 51.2%, with Altman, Sutskever, and Brockman each at 11.01%.

Musk’s response to Zilis relaying the demands was: “Too annoying—encourage them to go start their own business. I’m done.” After that, Musk and OpenAI officially went their separate ways.

Lawsuit allegations and trial process

According to The Verge’s April 30 report, the lawsuit originally had 26 counts, but the trial phase focuses on two: Unjust Enrichment and breach of a charitable trust. Defendants include Sam Altman, Greg Brockman, and Microsoft. The trial by a 9-person jury is expected to last 2 to 3 weeks. Judge Gonzalez Rogers is expected to issue a ruling in mid-May. The jury’s decision is advisory (Advisory), and the final decision remains with the judge.

Frequently asked questions

Which two counts is the Musk vs. OpenAI case currently focused on?

According to The Verge’s April 30 report, the trial phase focuses on the two counts of Unjust Enrichment and breach of a charitable trust. Defendants include Sam Altman, Greg Brockman, and Microsoft.

What ownership stake does the 2017 equity cap table shown in court indicate for Musk?

According to The Verge’s April 30 report, a 2017 equity cap table shown in court (sent by Birchall, who managed the Musk family office) indicates Musk’s ownership stake at 51.2%, with Sam Altman, Ilya Sutskever, and Greg Brockman each at 11.01%.

How did OpenAI’s 2015 founding documents define its mission?

According to The Verge’s April 30 report, a founding document dated December 8, 2015 shown in court states: “The purpose of the organization is to ensure that AGI benefits all of humanity. Not formed for the private interests of any individual.” Musk cited this wording as the core basis for his argument that OpenAI deviated from its mission.