Sam Altman defends OpenAI structure in Musk lawsuit

Sam Altman, the CEO of OpenAI, took the stand this morning to address Elon Musk’s lawsuit challenging OpenAI’s corporate structure. Altman refuted the allegation that OpenAI’s founders stole a charity by launching a for-profit subsidiary. He explained that it was difficult to wrap his head around that framing, noting that the founders created one of the largest charities in the world and that the foundation is doing incredible work.

The testimony addressed the financial structure of the OpenAI foundation, which Musk’s attorneys reported holds assets on the order of $200 billion. Musk’s attorneys pointed out that the foundation did not have full-time employees until earlier this year. However, OpenAI board chair Bret Taylor testified that this was due to the challenges of converting OpenAI equity—the value contributed by founders through labor rather than capital, known as sweat equity—into cash. This conversion was eventually enabled by the organization’s restructuring in 2025.

Altman also testified about Musk’s past management style during his time at the organization. “I don’t think Mr. Musk understood how to run a good research lab,” Altman, the CEO of OpenAI, said. He alleged that Musk’s management tactics demotivated some of our most key researchers and damaged the organization’s culture. Specifically, Altman stated that Musk had required co-founders Greg Brockman and Ilya Sutskever to stack rank employees—a performance management method of ranking employees against each other—and take a chainsaw through a bunch. Altman cast himself as defending the sweat equity of Brockman and Sutskever, who were running the organization at the time.

Altman also recounted a dispute from a pivotal funding period in 2017, noting that Musk’s plans for safety caused him concern. During those discussions, Musk suggested that OpenAI should pass to his children if he died while controlling the for-profit entity. Despite these past conflicts, Altman described a 2018 meeting regarding a Microsoft investment as a good vibes meeting. This highlights the complex relationship between the parties before Musk ultimately departed to focus on competing AI initiatives at Tesla and xAI.

Why it matters

The testimony provides a rare public window into the internal power struggles and governance evolution of the AI lab, highlighting the friction between non-profit origins and commercial scaling.