The Nonprofit Holding OpenAI Together Is What Musk Is Actually Trying to Break
Musk is seeking $150 billion from OpenAI and Microsoft, according to Reuters. A jury was seated Monday. Opening statements begin Tuesday in a San Francisco courtroom. The damages number alone is larger than the GDP of most nations, but it is not the most revealing fact in the case.
A 2017 diary entry by OpenAI co-founder Greg Brockman, entered into evidence, reads: "This is the only chance we have to get out from Elon." The line is being used by Musk's lawyers to argue the for-profit pivot was a planned betrayal of the nonprofit's founding mission. It is also, depending on how the judge reads the 2025 restructuring that enabled OpenAI's IPO, the exact mechanism that made the company worth $852 billion.
Musk invested roughly $38 million in OpenAI from December 2015 through May 2017, while it operated as a nonprofit. He left the board in 2018 after a bitter internal fight over who would be CEO, one the diary shows OpenAI's co-founders believed they were losing. "Accepting Elons terms nukes two things: our ability to choose and the economics," Brockman wrote. Musk at one point proposed taking a majority stake, which would have given him direct control.
The diary also shows Brockman asking, in 2017: "Financially, what will take me to $1B?" That question predates the for-profit conversion by two years. Musk's team is now using it as evidence the mission was always secondary to personal enrichment.
The legal mechanism at the center of the case is a nonprofit established in 2025 during OpenAI's restructuring. The nonprofit holds a 26% stake in OpenAI, plus warrants triggered if the company hits certain valuation targets. The structure preserves the nonprofit's public interest obligations while unlocking the capital an IPO requires. OpenAI is the structured entity. The nonprofit is the ownership layer. The warrants are the incentive alignment device. Together they represent the asset Musk is trying to unwind.
California Attorney General Rob Bonta declined to join the lawsuit, saying his office did not see how Musk's action serves the public interest. Legal scholars have questioned whether a former donor has standing to challenge a restructuring approved by the current board and the attorney general of Delaware, where OpenAI is incorporated. The judge has not yet ruled on a motion to dismiss.
The case also sits alongside a separate criminal matter. A 20-year-old was arrested in February on attempted murder charges after throwing a Molotov cocktail at Sam Altman's San Francisco home. The suspect told investigators he was worried about artificial intelligence's effect on humanity. OpenAI has declined to comment on security measures.
What to watch next is whether the nonprofit's 26% and the warrant terms actually protect the restructuring that created them, or whether that restructuring is still open to legal challenge. Opening statements Tuesday. The case is expected to last several weeks.