Sam Altman took the witness stand on Tuesday morning in Oakland and delivered two hours of testimony that reframed the founding narrative of OpenAI from a story about a stolen charity into a story about a power struggle with a man who wanted to control the most important technology of the century and pass it to his heirs.
The most striking moment came early. Under questioning from OpenAI's attorney Bill Savitt, Altman described a 2017 conversation in which the co-founders were debating whether to create a for-profit subsidiary and, if so, who would control it. They asked Musk directly: if you controlled OpenAI and something happened to you, what would become of the company?
Musk said he had not thought about it much and suggested that "maybe OpenAI should pass to my children."
Altman called it a "particularly hair-raising moment" and said the response crystallised his opposition to giving Musk or anyone else majority control of the entity. OpenAI was founded on the principle that advanced artificial intelligence should not be concentrated in the hands of a single person, Altman testified, and his experience running Y Combinator had taught him that "founders who had control usually did not give it up."
The testimony reframes the central factual dispute in the case. Musk's lawyers have argued that the co-founders excluded him from the for-profit conversion to enrich themselves. Altman's account casts the exclusion as a deliberate governance decision made in response to Musk's own expressed desire for dynastic control, a desire that contradicted OpenAI's founding charter.
Altman then turned to Musk's management of the organisation during his time on the board, and his assessment was blunt. "I don't think Mr Musk understood how to run a good research lab," he said. He described an episode in which Musk required co-founders Greg Brockman and Ilya Sutskever to compile a ranked list of researchers, evaluate their accomplishments, and "take a chainsaw through a bunch." The exercise, Altman said, "did huge damage for a long time to the culture of the organization."
Stack-ranking, the practice of grading employees against one another and cutting the lowest performers, is a management technique associated with high-pressure engineering and manufacturing environments. It is widely regarded as toxic in research settings, where collaboration, intellectual risk-taking and long-term thinking are essential. Altman's testimony positioned Musk as someone who tried to run an AI research laboratory like a factory floor and damaged morale in the process.
The damage was real, Altman implied. He said there was a "morale boost" at OpenAI after Musk departed the board in February 2018, a striking claim given that Musk's departure left the organisation without its largest funder and most prominent public advocate.
Under cross-examination, Musk's attorney Steven Molo confronted Altman with a text message he sent to Musk on 18 February 2023, in which Altman wrote: "I'm tremendously thankful for everything you've done to help. I don't think that OpenAI would have happened without you." Molo asked whether Altman still held that view. Altman appeared to hesitate, taking long pauses and speaking quietly as the cross-examination began, though he grew more comfortable as proceedings continued.
The exchange captures the central tension in Altman's position. He simultaneously acknowledges Musk's essential role in creating OpenAI and argues that Musk's management instincts, desire for control and departure were all ultimately beneficial for the organisation. Both things may be true, but holding them together under cross-examination is difficult, and Musk's lawyers will spend Wednesday pressing on the contradictions.
Board chair Bret Taylor also testified on Tuesday, addressing a question that has lingered throughout the trial: why the OpenAI Foundation, which is supposed to oversee the company's safety mission, had no full-time employees until earlier this year. Taylor said the problem was practical rather than principled. The foundation's primary asset was equity in OpenAI, and converting that equity to cash, which would fund staff and operations, was difficult until the 2025 restructuring created a mechanism for doing so. The foundation now holds approximately $200 billion in assets and has begun hiring.
The explanation is plausible but raises its own questions. If the foundation charged with ensuring OpenAI develops AI safely could not afford a single full-time employee for four years, what oversight was actually being exercised during the period when ChatGPT launched, the for-profit subsidiary expanded, and hundreds of billions of dollars in investment flowed into the company?
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Altman's testimony also addressed the Microsoft relationship. He described a 2018 meeting with Musk to discuss the possibility of Microsoft investing in OpenAI, calling it "unlike a lot of meetings with Mr Musk, this was a good vibes meeting," during which Musk spent a "long conversation showing us memes on his phone." The anecdote, delivered with understated humour, served a strategic purpose: it portrayed Musk as informed about and relaxed about the Microsoft partnership that his lawsuit now claims was a betrayal of the nonprofit's mission.
The trial continues on Wednesday with the conclusion of Altman's cross-examination. The nine-person jury will deliver an advisory verdict, with Judge Yvonne Gonzalez Rogers retaining the power to decide the case. Musk is seeking Altman's removal from the board, the removal of both Altman and Brockman as officers, the cancellation of Microsoft's licensing agreement, and damages of up to $134 billion.
The recap
- Sam Altman testifies in Musk's lawsuit over company structure
- OpenAI foundation holds assets on the order of $200 billion
- Bret Taylor says equity conversion completed with 2025 restructuring
