Microsoft CEO Nadella Testifies in Musk’s Explosive OpenAI Lawsuit
Microsoft Chief Executive Officer Satya Nadella took the stand on Monday in Elon Musk’s closely watched lawsuit against OpenAI, offering testimony expected to shed light on how the world’s largest software company helped transform ChatGPT’s creator from a charitable organisation into one of the most valuable corporations on earth.
Nadella’s appearance before a federal jury in Oakland, California, came ahead of the anticipated testimony of OpenAI boss Sam Altman, whose questioning is expected to take place either Tuesday or Wednesday, marking one of the final stages of a trial that has pulled back the curtain on bitter rivalries within Silicon Valley’s elite technology circles.
At the heart of the case, Musk accuses OpenAI of betraying the nonprofit mission on which it was founded, alleging that his founding donations totalling 38 million dollars were misappropriated to build a commercial empire now valued at over 850 billion dollars. The Tesla and SpaceX founder is asking the court to order OpenAI to revert to nonprofit status, a ruling that would significantly disrupt its competitive position against rivals including Anthropic, Google, and China’s DeepSeek.
OpenAI has countered that Musk departed voluntarily after failing to gain majority control of the company and has since become a direct competitor through his own artificial intelligence venture, xAI.
Musk’s legal team is seeking to convince the jury that Microsoft, having invested in OpenAI in 2019, knowingly assisted in diverting a nonprofit foundation from its original purpose. Central to this argument are internal Microsoft emails dating back to January 2018, recently disclosed during proceedings.
In those emails, Nadella consulted senior executives about discounted access to Azure, Microsoft’s cloud computing platform, which OpenAI sought to use. According to AFP, Nadella wrote at the time: “Overall I can’t tell what research they are doing and how if shared with us it could help us get ahead. From what Elon is telling everyone he feels Open AI is at verge of some big AGI (artificial general intelligence) breakthroughs.”
Reported by AFP, Microsoft’s then Chief Technology Officer Kevin Scott reportedly expressed concern that OpenAI might “storm off to Amazon in a huff,” reflecting the uncertainty that surrounded the startup during that period.
Microsoft ultimately invested one billion dollars in OpenAI in 2019, and went on to inject a total of 13 billion dollars. That stake is now valued at approximately 228 billion dollars, representing roughly 17 times the original investment.
Earlier in the trial, OpenAI co-founder Greg Brockman, whose stake in the company is valued at 30 billion dollars, faced scrutiny over 2017 diary entries that appeared to show enthusiasm for personal financial gain. Brockman also told lawyers that Musk physically threatened him after being refused absolute control of OpenAI in 2017, according to AFP reporting from the proceedings.
Separately, Musk announced on Wednesday a major partnership with Anthropic, OpenAI’s primary rival, to allow it to access computing capacity at SpaceX’s largest data centre.
An advisory jury is expected to deliver a verdict on any wrongdoing by the week of May 18. Federal Judge Yvonne Gonzalez Rogers, who has indicated she will likely follow the jury’s advice, will make the final ruling on both liability and remedies. A ruling against OpenAI could potentially derail the company’s planned initial public offering.