Elon Musk was grilled for nearly three hours by OpenAI’s lawyer on his second day of testimony in a high-stakes civil trial — and he will face more cross-examination on Thursday.
Here are the biggest takeaways from his time on the stand on Wednesday as he was questioned about how much control he wanted over OpenAI; his lawsuit against the company and cofounders Sam Altman and Greg Brockman; and communications with his now-partner Shivon Zilis.
Musk explained why he waited years to sue
One of the biggest questions about Musk’s 2024 lawsuit is why he waited so long to sue after leaving OpenAI in 2018. On the stand, the Tesla CEO sought to explain the gap.
During cross-examination, Musk told OpenAI counsel William Savitt that he didn’t have a problem with nonprofit OpenAI establishing a for-profit subsidiary “as long as the for-profit is in service of the nonprofit,” but later discovered that “the tail is wagging the dog.”
Musk told Savitt that he “reacted quite negatively” the moment he became aware of Microsoft’s $10 billion investment in OpenAI in the fall of 2022.
“Microsoft would only put $10 billion — which is a huge sum of money — into something if they feel like they will get a return,” Musk said. “There’s no way Microsoft is just giving that as a donation or any kind of charitable way. That’s an amount of money that doesn’t make any sense.”
“I texted Sam Altman and said, ‘What the hell is going on?’ — something to that effect,” Musk added. “I think I said, ‘This is a bait and switch.'”
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Altman’s lawyer had a lot of questions about Shivon Zilis
Musk’s communications with Shivon Zilis — his former chief of staff, senior advisor, and mother to four of his children — came under scrutiny.
Zilis’ meeting notes entered into evidence say that in August 2017, after Musk and other OpenAI board members met at his “haunted mansion” in San Francisco, he instructed Zilis to help form an OpenAI C-corporation — which would be a for-profit structure — and “make the next step” with it.
“That’s not my recollection,” Musk said when asked about the notes.
Savitt also questioned Musk about a message to Zilis in February 2018 in which he asked Zilis to stay “close and friendly” to OpenAI, to “keep information flowing,” and seek to “move three or four people” from OpenAI to Tesla.
“Well, I wanted to know what’s going on,” Musk testified.
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Musk rejected the CEO title at OpenAI
In the early days, Musk saw his role at OpenAI as akin to a CEO, along with Altman, newly released exhibits showed. They reveal he rejected the title because he was concerned about the optics.
“In terms of title, what about me as chair and you as CEO or us both as co-chairs?” Musk wrote in a November 2015 email to Altman when discussing the structure of OpenAI. “My main concern about being called a co-CEO, even if that is de facto true, is that it might cause problems at SpaceX and Tesla, where they know I’m already overbooked.”
On Wednesday, Musk said Tesla was experiencing financial difficulties between 2017 and 2018.
“Tesla particularly was having a lot of difficulty and was on the verge of bankruptcy,” Musk said. “I basically slept on the factory floor until it was no longer on the verge of bankruptcy.”
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OpenAI compensation plans revealed
OpenAI was a nonprofit, but Musk and Altman planned to pay the staff well and discussed cash salary and bonuses, with an option to convert cash into stock, the evidence shows. Musk suggested giving employees the option to convert cash compensation into Y Combinator or SpaceX stock.
“I’m also fine if they want to convert some or all to SpaceX stock. I can pretty much do what I want on the SpaceX side, as it is private (thank goodness).” Musk wrote in a November 2015 email to Altman.
Savitt questioned Musk about a July 2017 email in which he made the offer to give “free Teslas” — Founder Series Model 3 —to some OpenAI employees. They include John Schulman, now the chief scientist of Thinking Machines Lab, who at that time responded in an email that it was an offer he couldn’t refuse.
“To make it clear, I paid full price for the Teslas,” Musk told Savitt. “I didn’t get a discount or anything.”
