Elon Musk Labels Sam Altman “Scam Altman” in New OpenAI Clash
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Lawsuit moved into jury selection in Oakland as of this week: Elon Musk seeks $150 billion in damages, wants OpenAI returned to nonprofit and leaders removed; Musk previously provided about $38 million in seed funding (2016–2020); fraud claims were dropped on April 24. - High-profile testimonies expected from Musk, Sam Altman and Microsoft CEO Satya Nadella; court filings highlight internal governance and control disputes, posing risks to investor sentiment, fundraising and adoption for AI-linked projects and related crypto/token investments. - OpenAI amended its Microsoft partnership: Microsoft remains primary cloud partner but IP license is now non-exclusive through 2032, revenue-share terms changed (Microsoft no longer pays OpenAI; OpenAI pays Microsoft through 2030 subject to a cap), and OpenAI can serve products across any cloud—this strategic shift may affect cloud adoption, integrations and market dynamics for AI/crypto infrastructure.
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Elon Musk escalated his dispute with OpenAI on Monday by calling chief executive Sam Altman “Scam Altman” in a post on X as jury selection began in Oakland, California, for the lawsuit over OpenAI’s shift from nonprofit lab to commercial AI company. The new insult landed as the case moved from pretrial sparring into court and as OpenAI answered online that it was ready to make its case before a jury.
OpenAI’s public response was direct. In a post on X, the company said “the truth and the law are on our side” and called Musk’s suit “a baseless and jealous bid to derail a competitor.” Reuters reported that Altman was present for jury selection on Monday and that opening statements were expected on Tuesday.
The lawsuit centers on Musk’s claim that OpenAI, Altman, president Greg Brockman and major backer Microsoft abandoned OpenAI’s founding mission to build AI for humanity’s benefit and instead turned it into what Musk has described as a profit machine. According to Reuters, Musk is seeking $150 billion in damages, with the money intended for OpenAI’s charitable arm, while also asking that OpenAI return to nonprofit status and that Altman and Brockman be removed from leadership roles.
Trial Opens as Online Feud Moves into Court
The court fight is expected to bring several major technology figures to the stand. According to reports, Musk, Altman and Microsoft chief executive Satya Nadella are expected to testify in person, while former OpenAI board member Shivon Zilis is also expected to be a key witness. The case is being heard in federal court in Oakland before Judge Yvonne Gonzalez Rogers.
Internal records already filed in the case have added to the tension around the trial. Reuters reported that one of the documents includes a 2017 diary entry from Brockman that questioned Musk’s leadership and described a need to get away from his influence. Other court filings say one source of tension inside OpenAI was Musk’s desire to become chief executive, something OpenAI now points to as evidence that the dispute was also about control, not only mission.
The case comes after a narrower pretrial ruling last week. On April 24, Musk voluntarily dropped fraud claims against OpenAI, Altman and Brockman, leaving the remaining trial focused on other claims tied to contract, governance and corporate structure. That change reduced part of the case but did not alter the core dispute over whether OpenAI’s evolution broke with the vision presented when Musk helped launch it.
Microsoft Partnership Reset Adds a Fresh Backdrop
The trial opened on the same day OpenAI announced a major amendment to its partnership with Microsoft. As we reported, OpenAI said Microsoft remains its primary cloud partner and OpenAI products will still ship first on Azure unless Microsoft cannot or chooses not to support the required capabilities. At the same time, OpenAI said it can now serve all of its products across any cloud provider.
OpenAI also said Microsoft’s license to OpenAI intellectual property will continue through 2032 but is now non-exclusive. The statement added that Microsoft will no longer pay a revenue share to OpenAI, while OpenAI will continue paying Microsoft a revenue share through 2030 at the same percentage, subject to a total cap. Reports described the amended deal as a meaningful loosening of one of the AI sector’s most important alliances.
That revised Microsoft arrangement matters because Musk’s lawsuit is rooted in OpenAI’s move from a nonprofit research group into a commercial company able to attract outside capital. Reuters reported that OpenAI formed a for-profit entity in 2019, after Musk left the board, and last fall shifted again into a public benefit corporation structure in which the nonprofit retained a 26% stake plus additional warrants tied to valuation targets.
Dispute Centers on Mission, Money, and Control
Court papers cited say Musk gave about $38 million in seed money to OpenAI between 2016 and 2020, mostly before he left the board.
According to reports, Musk says he helped fund the company, recruit key talent, and shape its early strategy and now argues that his support was used to build a business that no longer matches its original charitable purpose.
OpenAI rejects that account. Reuters reported that the company says Musk took part in discussions about restructuring, wanted to be chief executive, and is now using the lawsuit to damage a rival while promoting his own AI venture, xAI. Microsoft, also named in the case, says it only partnered with OpenAI after Musk had left and denies colluding with OpenAI to sideline him.
