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Elon Musk could lose his case against OpenAI — and still get what he wants

It’s not about who wins. It’s about the dirty laundry you air along the way.

So, what’s a guy got to do to become a billionaire around here? Greg Brockman scribbled the question in his diary, recently unsealed as trial evidence, just two years after co-founding OpenAI as a charity in 2015: “Financially, what will take me to $1B?”

For Brockman, now OpenAI’s president, the answer was a yearslong restructuring saga in which OpenAI metamorphosed from a nonprofit research lab into a corporate behemoth on the verge of a massive public offering. Elon Musk, another co-founder who left OpenAI in 2018, is suing OpenAI, CEO Sam Altman, and executives like Brockman for this transformation, alleging that he was misled about the company’s profit motives when he donated tens of millions of dollars to it in its early days. Brockman testified on Monday that he was eventually awarded a slice of OpenAI for the “blood, sweat, and tears” — but, notably, not money — he poured into building OpenAI. His portion of the behemoth is now valued at about $30 billion on paper. (Disclosure: Vox Media is one of several publishers that have signed partnership agreements with OpenAI. Our reporting remains editorially independent.)

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Musk — who is himself known to be an unreliable narrator at times — will have an uphill battle when it comes to proving his case, legal experts say, especially if he wants a judge to reverse OpenAI’s for-profit restructuring. But the mega-billionaire vs. multibillionaire courtroom cage match might actually be beside the point. If the evidence Musk presents in trial is damning enough to convince a couple of attorneys general to take a second look at the deals they struck with OpenAI to finalize its for-profit transformation last fall, then he might not need to win his case at all. Musk could lose in court tomorrow, and potentially still get what he mostly seems to want: a hobbled OpenAI, more beholden to its nonprofit roots, just as it’s looking to go public.

Last October, California and Delaware attorneys general made a deal to allow OpenAI to turn its for-profit arm into a public benefit corporation, paving the way for a highly rumored IPO. OpenAI is based in California, but incorporated its for-profit arm in Delaware, as do most large corporations. It would be very unusual, perhaps unprecedented, for a federal judge to usurp that regulatory decision by forcing OpenAI to unwind........

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