Musk mulled handing OpenAI to his children, Altman testifies

OpenAI CEO Sam Altman finally took the stand this morning to defend himself against his former co-founder Elon Musk’s lawsuit challenging OpenAI’s corporate structure.

Altman was immediately asked what he thought of Musk’s allegation that OpenAI’s other founders “stole a charity” when they launched a for-profit subsidiary to market products based on the company’s AI models.

“It feels difficult to even wrap my head around that framing,” Altman said after several seconds of silence. “We created one of the largest charities in the world. This foundation is doing incredible work and will do much more.”

Musk’s attorneys have been at pains to point out that OpenAI’s foundation, which now has assets on the order of $200 billion, didn’t have full-time employees until earlier this year. OpenAI board chair Bret Taylor testified today that was simply because of the challenge of converting OpenAI equity to cash, which was accomplished with the organization’s most recent restructuring in 2025.

The central question posed by Musk’s lawyers is whether the company’s commitment to safety had been left behind as its commercial power grew. But Altman said that in 2017, during a pivotal period when the founders wrestled with how to obtain the funding to power their AI models, Musk’s “specific plans on safety made me worry.”

He described a “particularly hair-raising moment” in the debate when Musk was asked what would happen if he died while controlling a hypothetical OpenAI for-profit. In Altman’s telling, Musk said, “Maybe OpenAI should pass to my children.”

Altman said that Musk’s focus on controlling the initial for-profit gave him pause because OpenAI was dedicated to keeping advanced AI out of the hands of a single person, and Altman, with his experience running the prominent startup accelerator Y Combinator, knew “founders who had control usually did not give it up.”

Altman also testified that Musk's management tactics, which might have worked for engineering and manufacturing, didn't work at OpenAI.

"I don't think Mr. Musk understood how to run a good research lab," Altman said. "He had demotivated some of our most key researchers. He had at one point required Greg and Ilya to make a list of the researchers and list out their accomplishments and stack rank them and take a chainsaw through a bunch. That did huge damage for a long time to the culture of the organization."

Indeed, Altman cast himself as defending the "sweat equity" of fellow co-founders Greg Brockman and Ilya Sutskever, the two people effectively running OpenAI at the time while Musk and Altman had other jobs.

After that clash went unresolved, Musk ultimately left OpenAI's board and started competing AI initiatives at Tesla and his own AI startup, xAI. But Altman kept in touch with the mercurial businessman, updating him on OpenAI's work and seeking his funding and advice.

OpenAI's lawyers noted that Musk had been kept up to date and asked to participate in the investments that his lawsuits now claim corrupted the non-profit.

During one discussion of a Microsoft investment into OpenAI in 2018, Altman said that "unlike a lot of meetings with Mr. Musk, this was a good vibes meeting," where Musk spent a "long conversation showing us memes on his phone."

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