UPDATE 3-Elon Musk testifies at trial that OpenAI's nonprofit status gave it 'halo'

The world's richest person was testifying for a ‌second day in a high-stakes trial over a lawsuit he brought against OpenAI co-founder and Chief Executive Sam Altman and President Greg Brockman over the 2019 decision to create a for-profit entity. Under questioning by his lawyer, Steven Molo, Musk acknowledged that most technology companies were for-profit entities.

​Elon Musk testified on Wednesday that OpenAI's nonprofit status had a "halo effect" that gave the impression it was developing artificial intelligence for the public good, a mission that Musk alleges the company abandoned in pursuit of profits. The world's richest person was testifying for a ‌second day in a high-stakes trial over a lawsuit he brought against OpenAI co-founder and Chief Executive Sam Altman and President Greg Brockman over the 2019 decision to create a for-profit entity.

Under questioning by his lawyer, Steven Molo, Musk acknowledged that most technology companies were for-profit entities. But he said OpenAI sought to use its nonprofit status to reassure the public it was developing ‌AI safely, while at the same time allowing its for-profit arm to become the "main event." "Where you can't do it is have your cake and eat it too," Musk told ‌a nine-person jury in Oakland, California, federal court, wearing a dark suit over a white shirt. Later, he is expected to be cross-examined by a lawyer for OpenAI, which has argued that Musk is motivated by a compulsion to control the company.

OpenAI has said it created a for-profit entity to allow it to buy computing power and pay top scientists. MUSK SAYS 'I'M NOT A YELLER' The trial highlights the depth of the rupture between Musk and Altman. ⁠The two ​Silicon Valley icons once partnered in the ⁠quest to develop the fast-growing AI technology, a pillar of growth in the U.S. economy that is also fueling anxiety about job losses.

The pair co-founded OpenAI in 2015 to create a benevolent steward of the technology and ⁠fend off rivals such as Alphabet Inc's Google. Musk, the chief executive of Tesla and SpaceX, left OpenAI in 2018 after investing $38 million. Microsoft, also a defendant, invested $10 billion in OpenAI in 2023. Lawyers for OpenAI and ​other defendants have argued that Musk is seeking to bolster his own AI company, SpaceX unit xAI, which lags OpenAI in user adoption. They have also said ⁠AI safety was not a priority for Musk when he was with the company and that he derided employees who focused on it as "jackasses."

Asked by Molo if he had ever called an OpenAI employee a "jackass," Musk said ⁠it ​was possible. "I don't lose my temper. I'm not a yeller. I don't yell at people," Musk testified. "Sometimes you have to use language that gets people out of their comfort zone."

MUSK SEEKS $150 BILLION IN DAMAGES The trial comes as OpenAI prepares for a potential initial public offering that could value it at $1 trillion, Reuters has reported. The company also faces growing ⁠competition from rivals including Anthropic, while a Wall Street Journal report that OpenAI had missed some internal performance targets weighed on the tech-heavy Nasdaq Composite on Tuesday.

Musk is seeking $150 billion ⁠in damages from OpenAI and Microsoft, with any ⁠award going to OpenAI's charitable arm. He also wants OpenAI to revert to a nonprofit, with Altman and Brockman removed as officers and Altman removed from the board. His claims include breach of charitable trust and unjust enrichment.

OpenAI is currently structured as a public benefit corporation, in ‌which the nonprofit and other ‌investors including Microsoft hold stakes.