OAKLAND, Calif. — Microsoft CEO Satya Nadella took the witness stand Monday in a trial about control of the artificial intelligence startup OpenAI, making him the third tech billionaire to testify in the closely watched lawsuit in as many weeks.
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Nadella’s testimony follows earlier appearances by Elon Musk, the CEO of Tesla and SpaceX and a co-founder of OpenAI, and Greg Brockman, the president and co-founder of OpenAI.
A fourth billionaire, OpenAI co-founder and CEO Sam Altman, is scheduled to testify later in the week.
The lawsuit centers around Musk’s claims that OpenAI, the creator of ChatGPT, has strayed from its original mission as a nonprofit research center. Musk alleges that Altman and Brockman are enriching themselves at the expense of what he says was supposed to remain a charity.
Altman and Brockman say that OpenAI is still controlled by a nonprofit foundation, despite having a for-profit arm with outside investors. They say Musk is now harassing them as competitors via the suit after he started his own AI company, xAI, now part of SpaceX. They also say Musk agreed with them about the need to start a for-profit arm but wanted to be the one to control it.
Microsoft is a co-defendant in the case through its partnership with OpenAI. Musk alleges that Microsoft was a bad influence on Altman and Brockman, encouraging them to violate their duty to OpenAI’s nonprofit mission by signing lucrative deals in which OpenAI obtained cloud computing services.
In response, Microsoft has said it wasn’t aware of any conditions that Musk, as a donor to OpenAI, might have placed on his charitable contributions. The company says it therefore didn’t intend to encourage Altman and Brockman to violate their duty.
On the witness stand, Nadella testified that OpenAI retained its independence even as the Microsoft-OpenAI partnership deepened over time.
“OpenAI had all the rights and resources they always had,” he said.
In 2019, Microsoft agreed to invest $1 billion in OpenAI’s for-profit arm and provide cloud computing services in exchange for rights to a share of profits and an exclusive license to commercialize one of OpenAI’s models for a year. Microsoft added another $2 billion in 2021 and another $10 billion in 2023, after OpenAI had released ChatGPT.
Musk complained publicly in 2020 that OpenAI seemed to have been captured.
“This does seem like the opposite of open. OpenAI is essentially captured by Microsoft,” Musk wrote on Twitter, now X, in September that year.
The next month, according to notes from an October 2020 meeting introduced as pre-trial evidence, Nadella discussed Musk’s perspective on “closed openai” and said it was worth thinking through, after not wanting “to get caught up in something,” according to notes from the October 2020 meeting introduced in the lawsuit pre-trial. U.S. District Judge Yvonne Gonzalez Rogers cited the notes as one piece of “considerable evidence” for sending the accusation against Microsoft to trial.
The closeness between Microsoft and OpenAI has flared up at other points. In 2023, when Altman was briefly ousted as OpenAI CEO, Nadella on a podcast emphasized how tight they had become.
“We are below them, above them, around them,” Nadella said on the podcast, “On with Kara Swisher.”
On the witness stand last week, Musk adviser and former OpenAI board member Shivon Zilis quoted that podcast interview as a moment when the Microsoft-OpenAI partnership had given her pause.
Nadella testified Monday that his statement on the podcast was in the context of Microsoft customers fearing that OpenAI might disappear during the November 2023 crisis at the company.
“It goes back to me trying to communicate to customers that they can rely on Microsoft,” he said. “It had nothing to do with control.”
Musk sued in 2024, saying his past donations to OpenAI totaling $38 million gave him a special interest in seeing that it remained a nonprofit research center. He had also founded xAI a year earlier.
Nadella became Microsoft’s CEO in 2014, succeeding Steve Ballmer. He has a net worth of $1.3 billion, according to Forbes magazine.
Evidence in the trial is scheduled to wrap up Wednesday, with closing statements to the nine-member jury expected Thursday.
