Microsoft CEO Testifies in Musk vs. OpenAI Trial

On Monday, Microsoft CEO Satya Nadella spoke in federal court, stating that Elon Musk never reached out with concerns about Microsoft’s investment in OpenAI violating any commitments. Musk claimed that Microsoft’s profitable deals with OpenAI made him suspect that Sam Altman was “trying to steal charity.”

Nadella’s testimony lasted several hours, and he addressed the partnership between Microsoft and OpenAI, detailing the dynamics between the two organizations, especially during the period when Altman was briefly ousted as OpenAI’s CEO. Altman’s attorney is expected to testify on Tuesday.

In 2024, Musk initiated a lawsuit against OpenAI, Altman, and its president Greg Brockman, alleging they broke their promise to maintain OpenAI as a nonprofit committed to charitable purposes. Microsoft is also named in this lawsuit, with Musk accusing the company of aiding OpenAI in its supposed breach of charitable trust.

Microsoft has been a significant supporter of OpenAI since 2019, even before ChatGPT garnered attention in late 2022. The company has invested over $13 billion in OpenAI, making substantial investments across several years. These financial contributions became a focal point during the trial.

Nadella expressed pride in Microsoft’s decision to invest in OpenAI when others were hesitant to support the nascent lab. Musk had previously cited the $10 billion investment as a pivotal indication of OpenAI straying from its nonprofit mission. He mentioned this large investment as a factor that prompted him to investigate OpenAI legally, stating, “I was worried that they were really trying to steal the charity.”

Nadella maintained that Microsoft’s investment shouldn’t be viewed as a donation, emphasizing the commercial nature of their partnership. From the onset, Microsoft provided OpenAI with significant discounts on computing resources, anticipating that the collaboration would yield marketing benefits. In a separate deposition, Microsoft’s corporate development head revealed that as of March 2025, the company recognized roughly $9.5 billion in revenue from its partnership with OpenAI.

Musk was one of the co-founders of OpenAI in 2015, alongside Altman, Brockman, and others. He stepped down from OpenAI’s board in 2018 due to disagreements about the company’s direction, including a failed merger with Tesla. This year, Musk launched xAI, a competing AI startup that has since merged with SpaceX.

Shortly after Musk’s departure, OpenAI established a commercial subsidiary, facilitating the attraction of outside funding. Since then, various investors, including Microsoft, have injected billions into OpenAI, significantly boosting its valuation as a frontrunner in the AI field.

In November 2023, Altman was momentarily dismissed from his position at OpenAI due to board concerns about his transparency in communications. After intense negotiations, he was reinstated. Nadella expressed surprise at the board’s decision, underlining the importance of stability for Microsoft’s customers.

During a discussion with OpenAI board members post-firing, Nadella aimed to comprehend the board’s phrasing regarding Altman’s alleged lack of transparency. He felt that the matter was not adequately clarified, especially given Altman’s position as CEO and Microsoft’s deep investment in the company.

Nadella speculated that perhaps there were issues of jealousy or miscommunication leading to Altman’s dismissal, but the board lacked specifics. He described it as “kind of an amateur city.”