Microsoft CEO Satya Nadella testified on Monday that he is “very proud” of his company’s early and profitable investment in OpenAI, as he appeared as a witness in Elon Musk’s high-profile lawsuit against the leaders of the AI giant behind ChatGPT.
Musk, who was an early supporter of the original nonprofit organization, claims that Microsoft knowingly assisted OpenAI’s founders in abandoning their philanthropic mission and transforming the company into a profit-generating machine.
The trial has exposed internal conflicts among a group of elite Silicon Valley engineers, investors, and executives during the years leading up to the much-publicized launch of the ChatGPT chatbot in 2022.
In his lawsuit, Musk accuses OpenAI of betraying its original nonprofit mission and misusing his founding donations, which totaled $38 million, to build an empire now valued at over $850 billion. The Tesla and SpaceX founder is demanding that OpenAI return to its nonprofit status—a move that would affect its standing in the global artificial intelligence race against competitors such as Anthropic, Google, and China’s DeepSeek.
OpenAI argues that Musk, who is now an AI competitor through his company xAI, is motivated by petty revenge after storming off when he failed to gain majority control.
Nadella told a jury in Oakland, California, on Monday that Microsoft’s investment in the nonprofit arm—which now owns about a quarter of OpenAI Group PBC, the company behind ChatGPT—helped create “one of the largest, most well-funded nonprofits in the world.”
Musk’s attorney stated that internal Microsoft documents show the tech giant was actually focused on profit rather than helping to develop a philanthropic AI service. He noted that Microsoft’s initial $13 billion investment had grown to be worth $92 billion just four years later.
“It has worked out well because we took the risk,” said Nadella, referring to a stake now estimated to be worth $135 billion. “If the pie became larger, obviously the nonprofit would benefit as well with their mission — and that’s what in fact it’s proven out.”
Musk’s lawyers suggested that Microsoft played a key role in OpenAI’s shift toward becoming a commercial company, citing Nadella’s 2023 boast: “We have the people, we have the compute, we have the data, we have everything.”
That same year, when several members of OpenAI’s board ousted company founder Sam Altman, citing a tendency to be evasive, Nadella moved to support him.
“I would also try to make sure that Sam and Greg [Brockman, his co-founder] don’t create a competing company and they would join Microsoft,” he told the court.
The morning after Altman was fired, Microsoft had already set up a subsidiary company to welcome them and acquire the equity stakes of any employees who chose to follow them—a move that one co-founder estimated would have cost approximately $25 billion. After a five-day crisis, Altman was ultimately reinstated at OpenAI.
Altman is expected to take the stand on Tuesday or Wednesday, ahead of closing arguments later in the week.
An advisory jury is expected to reach a verdict on any actual wrongdoing by the week of May 18. Judge Yvonne Gonzalez Rogers will then make the final ruling on both liability and remedies after hearing the jury’s opinion. She has indicated she will likely follow their advice. If Gonzalez Rogers ultimately sides with Musk, OpenAI’s initial public offering could be jeopardized.
The trial has already heard gripping testimony. Last week, co-founder Greg Brockman—whose stake in OpenAI is valued at $30 billion—came under scrutiny over his 2017 diary entries, including one in which he appeared keen on “making money for us.” Musk’s lawyers used the entries to portray Brockman as a calculating opportunist.
Brockman also told lawyers that Musk physically threatened him in 2017 after Musk was denied absolute control of OpenAI.
Musk recently announced a major partnership with Anthropic, OpenAI’s top rival, allowing it to use the computing capacity at SpaceX’s largest data center.