Satya Nadella took the witness stand in Oakland on Monday morning, and within minutes made clear why he has spent the entire OpenAI saga avoiding paper trails: the papers that do exist are not flattering to anyone.
The Microsoft chief executive, wearing a navy suit and blue tie, began with an anodyne account of Microsoft's early relationship with OpenAI, saying he was "very proud" that the company took the risk to invest when "no one else was willing." He said the investments were never donations and that there was a clear commercial element to the partnership from the outset.
That framing serves Microsoft's defence against Musk's claim that the company aided and abetted a breach of charitable trust. If the relationship was always commercial, Microsoft cannot have helped divert charitable assets.
But it also undermines the mythology that both Microsoft and OpenAI have cultivated for years: that the partnership was born from a shared vision of building beneficial artificial general intelligence, rather than a straightforward calculation about competitive positioning and cloud computing revenue.
Musk's lawyers moved quickly to the internal emails. In January 2018, before Microsoft had invested a single dollar, Nadella consulted his executives about a discount OpenAI was receiving on Azure, Microsoft's cloud platform. "Overall I can't tell what research they are doing and how if shared with us it could help us get ahead," Nadella wrote.
The tone was sceptical. Chief technology officer Kevin Scott expressed concern that OpenAI might "storm off to Amazon in a huff." The emails portray a company that was evaluating OpenAI not as a mission-aligned partner but as a potential customer it did not fully understand and was not entirely sure it wanted.
Within 18 months, the calculus changed. OpenAI, desperate for computing resources and unable to fund its research through philanthropy, created a for-profit subsidiary. Microsoft invested $1 billion in 2019, followed by $2 billion in 2021 and $10 billion in 2023. Those investments are now worth approximately $228 billion, a 17-fold return that represents one of the most profitable bets in corporate history.
Nadella testified that Musk never reached out to him to express concerns that Microsoft's investments were violating any special terms or commitments attached to OpenAI's nonprofit structure.
The statement is significant because it contradicts the narrative that Musk was raising alarms about the for-profit transition in real time. If Musk believed Microsoft was helping to "steal a charity," as he testified from the stand last month, the obvious person to confront was the chief executive of the company writing the cheques.
Musk's position is that the $10 billion investment in 2023 was the tipping point that made the nonprofit conversion irreversible. "All due respect to Microsoft, do you really want Microsoft controlling digital superintelligence?" he asked from the stand, a question that plays well with a jury but sidesteps the fact that Musk himself sought majority control of OpenAI before Microsoft was ever involved.
Nadella's testimony also shed light on the chaotic weekend in November 2023 when the OpenAI board fired Sam Altman. Former board director Tasha McCauley testified via video deposition that Nadella wanted to "restore things to as they had been," effectively reinstating Altman, while the board believed that was the wrong course.
Nadella ultimately offered to hire the entire OpenAI team at Microsoft, a move that gave Altman the leverage to negotiate his return on favourable terms.
The picture that emerges from Nadella's appearance is of a chief executive who is neither the visionary partner nor the calculating enabler that the two sides need him to be.
He is something more prosaic and more credible: an investor who saw an opportunity, moved cautiously, and then committed aggressively when the commercial logic became overwhelming. The emails show pragmatism, not conspiracy.
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The testimony shows a man who kept his distance from the interpersonal drama that consumed everyone else in the story, and who is now reaping the financial rewards of that detachment.
Altman is expected to take the stand on Tuesday or Wednesday, in what will be
The recap
- Satya Nadella is set to testify in Musk vs. Altman trial
- CNBC published a 3 minute 27 second video on coverage
- Kate Rooney will report on the lawsuit's latest developments
