Law

Someone — Altman doesn’t remember whether it was Musk or his subordinate, Sam Teller, said it — told Altman that Musk had “long since decided” he would only work on companies that he controlled. “Mr. Musk felt very strongly that if we were going to form a for-profit he ended to have total control over it initially and this was because he only trusted himself to make non-obvious decisions that were going to turn out to be correct,” Altman says.

He is being sworn in now.

Having the ability to sell their equity let them finance their activities, such as AI research into Alzheimer’s research.

He is now testifying about Musk’s attempt to buy OpenAI using xAI, which happened after this lawsuit was filed. “I was surprised” by it, Taylor says. “Ostensibly this lawsuit is about our nonprofit purpose and mission adn this proposal was to acquire this nonprofit by a group of for-profit investors, which felt contradictory to the spirit of this lawsuit.” The OpenAI Foundation board rejected the bid because they didn’t feel it was appropriate for one person to control the mission

But also about some light character assassination. It looks like Musk now has a broader strategy to try to make Altman a liability to OpenAI.

He has not managed to do this at all. He is speaking rapidly, in a monotone.

“We’re decidedly not cash-flow-positive today.” The company has not generated any profits to date.

Because LLMs keep stealing people’s work, lol. Anyway he was talking about the OpenAI deal with Reddit, which was done to avoid litigation.

He is in a gray suit and gray tie. I am expecting more pleated khaki pants testimony. He was also the chair of Twitter’s board when it was acquired by Musk.

Also, Musk gave no guarantee his proposed control of the board would diminish over time. “I found it to be aggressive because I knew that Mr Musk had many other obligations in many other companies that the was running that were much larger than OpenAI,” he said. He also didn’t like the proposal that Tesla take over OpenAI. “It would be on some level, it would be like, it would kill a dream,” he said. “When one starts a company, one has dreams for a company to flourish and do different things, and in general being absorbed into another company means to give up that dream.”

We are now at “the blip” again. The board chose “not consistently candid” carefully, he says. Sutskever said he prepared a document of incidents with Altman, with some other people at OpenAI. Altman has a pattern of lying and pitting executives against each other, “this leads to tremendous loss of productivity,” trust, and difficulty creating safe AGI.

Our next witness is Ilya Sutskever. This promises to be more interesting, I think.

He says he provides suggestions a lot. And they’re just suggestions, including in the case of OpenAI. While Microsoft put forward 14 names, none of those names were added to the new OpenAI board except Sue Desmond-Hellman. CEO of the Bill and Melinda Gates Foundation, who was added later.

He’s explaining that firing a CEO is “a fairly big things” and when he didn’t get any details on why Altman was fired, he felt that OpenAI’s board was “sort of amateur city as far as I was concerned.”

We also discover that Nadella has no idea if Altman and Musk talked about Musk’s mean Microsoft/OpenAI tweets. As a side note, we are referring exclusively to “Twitter” and “tweets” even for posts after the X rebrand.

I recognize Musk has identified this as the spot where he was convinced he’d been swindled. But the main thing I’m hearing here is that OpenAI was unstable. I don’t know what the correct way to respond to that kind of chaos is, especially if you have a partnership with the company that appears to be rapidly imploding. Trying to suggest that Nadella’s attempts to stabilize the company and preserve his investment was somehow improper seems weird? This is a genuinely odd situation, not necessarily one you run into in business school. (Well, until then anyway.)

“Pretty definitive statement as to why they fired him, right?” Well, Mr. Molo, no. I remember a great deal of speculation about what this meant; for instance, if Altman had gotten up to something criminal. One of those moments where I wonder what the jury is thinking, since I doubt they recall any of this.

Nadella is cooler than everyone else on cross, but he’s still getting worked up. Molo just got told by the judge that his question was argumentative. Molo is yelling about how the risk MSFT took on OpenAI was “prudent.” Nadella notes it’s still a risk. “At the time the was a risk it could to to zero,” Nadella says. “It was a calculated risk.” Molo, of course, is focused on projected return, of $92+ billion.

Molo is asking about this line Nadella wrote in a 2022 email, and it’s very funny. Nadella has explained a couple times that to him it’s about IP rights. “The context for me was making sure that Microsoft was benefitting from the IP rights that we had because that’s what happened in the case of Microsoft and IBM.” Molo then says, didn’t Microsoft become more prominent and important than IBM? Nadella agrees.

Nadella’s attitude is not notably different than it was on direct. We are talking about donating commute to OpenAI from Azure services. From a 1/12/18 email: “The 2016 deal, where they agreed to pay $10M for $60M in Azure services was projected at a $15M loss over 3 years, given assumed usage profile. They’ll have consumed all the usage in ½ that time.” The funny recurring theme here through the trial is the gaping maw of compute required is always bigger than whatever huge number people had projected. Interesting to know ahead of AI IPOs!

He misstated at first that he didn’t currently serve on any such boards, though he is a trustee at the University of Chicago, which is a nonprofit.

The Microsoft CEO said that though things “started off as, essentially, a bunch of people leaving,” it turned into them “talking about creating a new company. That was obviously very concerning to me.” He said he was trying to make sure Altman and Greg Brockman joined Microsoft instead of launching a new competitor: “I just wanted to make sure we could hang onto the band that created all this technology, one way or the other.”

Nadella is being asked about possibly the most baller thing he’s ever said. “Below them” means compute. “Around them” means API. “Above them” means products like Copilot. “The question was being asked, what happens if OpenAI disappears, will everything crumble? So I was trying to reassure everyone,” he says. The problem was that until he said this to Kara Swisher, “the drama of what was going on was drowning out what the customers care about.”

He was being asked if at any point Musk contacted him to say that the OpenAI deals with Microsoft violated any agreement Musk had with OpenAI’s nonprofit. Musk did not. “Does he know how to contact you?” his lawyer, asked. “He does.”

The partnership itself was “a fairly big decision for us” because “to make the call we’d use some of the scare resources we had” on it. But Microsoft accepted the risk of investing in Open AI because Microsoft has a “core ethos as a platform and partner company,” he says. “So if you find partners you can create these win/win with, it’s great to make them longterm stable.”

He looks very nice. I am fully expecting his testimony to be the equivalent of a pair of pleated khaki pants.

Michael Wetter, the VP of corporate development at Microsoft, “We’ve recognized $9.5B of total revenue life to date” as of 9/8/2025. He notes there’s context: a $13B investment with OpenAI and Azure compute.

“I can’t get my head around why [Musk lawyer] Mr. Molo told me this was not a focus of the trial,” YGR says. “That’s what my ruling is based on.”

Last week, an expert witness testified about the 2025 recapitalization of OpenAI. OpenAI has said they’d like to include the AG’s conclusions, since the removal of the profit cap was mentioned. YGR is annoyed; she told Musk’s team not to go into detail, and OpenAI didn’t object at the time. “We’re in mud,” she just said. The problem is that Musk’s team is treating it as the crux of the “breach” Musk is alleging.

What happened in the second week of Elon Musk’s lawsuit against OpenAI and its CEO, Sam Altman? The Verge senior AI reporter, Hayden Field, can help you catch up.

Which gets something like $2 billion from hospital operations, more than $1 billion in tuition, and an endowment of $16 billion, plus $2.2 billion in philanthropy. Does this mean that Columbia is deviating from its mission to educate kids and support research?

Like, yes, sure, he doesn’t understand AI, but we have lots of nonprofits, which are governed by the same set of laws. Sure, yes, he’s getting $1,500 per hour from Musk and that is probably a pretty penny — likely more than my annual salary — but also... who cares. I was not overwhelmed by Schizer’s testimony but this cross isn’t doing anything to knock it down for me.

because the jury is engaged in a fact-finding mission. Anyway, of a hypothetical, he says: “You don’t want to be known as a liar.” Evidently Schizer is unfamiliar with the current president of the United States.

He’s a professor of law and economics at Columbia Law School. He specializes in nonprofits, nonprofit taxation, and management. We are going through an exhaustive list of his qualifications.

Yes. The main thing I am taking away from McCauley’s and Toner’s testimony is that the board got really bad advice from whatever lawyers they consulted on the firing Altman thing. I mean, I hope they consulted lawyers. I don’t think that’s come up in the testimony.

Increasingly I feel that the only thing happening here is Musk just trying to remind the world that Altman is untrustworthy. (Ironic!) McCauley’s testimony about the profit incentives is neither here nor there when it comes to the donations and whether any promises were made to Musk.

We are once again going over concerns about Sam Altman’s dishonesty. “Because of this pattern of lying, people in the company were copying that behavior, and there was a culture of lying and a culture of deceit,” she says.