Musk Nonprofit Protection Gambit

Musk's 'Nonprofit Protection' Gambit: The Irony at the Center of the $134 Billion OpenAI Trial

He left the board in 2018. He founded a rival in 2023. Now Elon Musk wants a court to restore the nonprofit he abandoned — and remove the people running it.

The last thing OpenAI wanted two weeks before trial was another curveball from Elon Musk. On Friday night, it got one.

In a court filing submitted late in the evening, OpenAI accused Musk of staging a "legal ambush" just weeks before jury selection begins in the high-stakes lawsuit over the company's conversion to a for-profit structure. The filing, reported by Bloomberg, said Musk had "suddenly changed direction" on what he is seeking from the case, and that his stated objectives "appear to be aimed at sandbagging the defendants and injecting chaos into the proceedings, while trying to recast his public narrative about his lawsuit."

Musk's lawyers had submitted an amended remedies proposal earlier in the week that marked a significant rhetorical shift. Rather than seeking damages personally, the filing now states that "any assets obtained at the charity's expense belong to the OpenAI charity and must be returned to it." Musk, the world's richest person, is no longer asking to be enriched. He is asking the court to restore the nonprofit he claims was wronged and remove Sam Altman and Greg Brockman from the for-profit entity he helped found in 2015.

The gambit is transparent, and OpenAI called it out. "Elon is pretending to change his tune about attacking the nonprofit OpenAI Foundation," the company posted on X. "The truth is that this case has always been about Elon generating more power and more money for what he wants."

Whatever the motivation, the amendment changes the litigation calculus. If Musk is seeking to return damages to the nonprofit rather than pocket them, he insulates himself from the most obvious counter-narrative: that a Silicon Valley billionaire is using a nonprofit lawsuit to harm a competitor. Musk controls xAI, the company he founded in 2023 as a direct rival to OpenAI.

The trial itself is set to begin with jury selection on April 27 in federal court in Oakland, California, before U.S. District Judge Yvonne Gonzalez Rogers. The case has been building for two years. Musk sued Altman, Brockman, and OpenAI in 2024, alleging he was manipulated into donating roughly $38 million to the nonprofit with the promise that it would remain true to its mission of developing artificial general intelligence for the public benefit. He claims the subsequent Microsoft investment and for-profit restructuring betrayed that purpose.

The damages sought have grown substantially. Musk's lawyers now say he is owed up to $134 billion from OpenAI and Microsoft, representing what they characterize as wrongful gains derived from his early involvement. That figure would be catastrophic if awarded. OpenAI has said it could "cripple the nonprofit" foundation at the center of the case.

The restructuring at the heart of the dispute was finalized in October 2025, when OpenAI converted its for-profit arm into a public benefit corporation controlled by the nonprofit. Microsoft holds approximately 27 percent of the for-profit entity under the new structure. California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings reviewed the plan and declined to object, after OpenAI made certain governance commitments to both states.

Musk wants that arrangement unwound entirely. His Tuesday filing specifically requests an order removing Altman as a director from the nonprofit board and removing both Altman and Brockman as officers of the for-profit. It also asks the court to restore OpenAI's status as a nonprofit research organization. Meanwhile, the restructuring that the AGs approved remains in place.

OpenAI's response has been twofold. On the legal front, it is fighting the case on its merits. On the political front, it is asking the same state attorneys general who blessed its restructuring to investigate Musk's conduct. In a letter sent Monday to Bonta and Jennings, OpenAI chief strategy officer Jason Kwon alleged that Musk has engaged in "improper and anti-competitive behavior" and has attempted "to wrest control of the nonprofit for his personal gain."

"Whether there is room in the industry for a company subject to the mission and structure outlined in the October agreements, or whether that ground must be ceded to Mr. Musk and his co-conspirators," Kwon wrote.

The "co-conspirators" language is notable. Kwon's letter suggested Musk has been coordinating with Meta CEO Mark Zuckerberg in his efforts to block the restructuring. A previous court filing from August indicated Musk tried to enlist Zuckerberg in a consortium bid for OpenAI that ultimately failed. OpenAI rejected a $97.4 billion unsolicited bid to acquire its nonprofit assets.

What OpenAI is really asking the AGs to do is go back and scrutinize a deal they already approved. Kwon wrote that Musk's filings "suggest that your offices did not thoroughly investigate OpenAI's plan to recapitalize and merely relied on promises about what OpenAI will do in the future." A spokesperson for Bonta said his office is reviewing the letter. A representative for Jennings and a lawyer for Musk did not immediately respond to requests for comment.

The timing of the "ambush" filing is not incidental. Opening arguments are weeks away. Both sides have been sparring over motions and procedural issues for months, but the last-minute remedies amendment appears to have caught OpenAI off guard. The company is now in the unusual position of arguing that Musk's pivot toward the nonprofit is itself a form of litigation misconduct.

What happens next is not subtle. On April 27, a jury will hear arguments about whether OpenAI defrauded a cofounder, whether Microsoft improperly benefited from a nonprofit's charitable status, and whether the entire restructuring of one of the most valuable AI companies in the world was executed in bad faith. The damages number is headline-grabbing. The governance structure of the AI industry may hinge on the answer.