OpenAI trial begins its second day with Musk, Altman in attendance: Live updates

Molo, Musk’s lawyer, faced the jury the entire time he presented his opening arguments. He spoke clearly, and he did not use technical language as he talked.

He is wearing a charcoal grey suit with a purple tie.

— Ashley Capoot

The courtroom where the proceedings are happening is not very big. I am seated on a wooden bench on the left side of the room with other members of the media. There are six benches on the left side, and three benches on the right.

Judge Gonzalez Rogers sits on a chair that is elevated above the rest of the courtroom. Lawyers for Musk and OpenAI are gathered in leather chairs around two rectangular tables. The tables are in front of a gate, so they are separated from the benches where I am sitting. Laptops, binders, chargers and bottles of water are covering the tables.

The jury also sits in front of the gate. They are seated in two rows of leather chairs on the left side of the room, which is decorated with portraits.

— Ashley Capoot

Musk’s lawyer just concluded his opening statement, and Gonzalez Rogers ordered the court to recess for 20 minutes.

When the proceedings resume, it will be time for a lawyer representing OpenAI, Altman and Brockman to present their opening arguments.

Altman is still in the courtroom, and he’s typing on his phone. Musk is seated at a table with some of his attorneys. Brockman left the room.

— Ashley Capoot

Molo asks the jury to keep three questions in mind throughout the trial.

“First: Did OpenAI have a charitable mission to operate as a non-profit, to develop safe AI, open source, for the good of humanity?”

Second: “Did Altman and Brockman violate that mission through what they’ve done with the for-profit business?”

And third: “Did Microsoft know about the charitable mission and substantially assist Altman and Brockman in breaching it?”

– Jeffrey Kopp

As Molo was presenting his opening arguments, his microphone and the screen where he has been showing images went down.

“What can I tell you? We are funded by the federal government,” Gonzalez Rogers joked, which was met with laughter in the courtroom.

Proceedings are back underway.

— Ashley Capoot

Molo says Musk provided the financial backing and vision that set the stage for OpenAI’s success.

“Without Elon Musk, there would be no OpenAI, pure and simple,” he says.

Musk’s efforts included hiring and training leading AI scientists and contributing $38 million in early funding to the company, Molo says.

— Samantha Subin

Musk’s lead trial lawyer, Steven Molo, is delivering his team’s opening statement to the jury. Molo is urging jurors to set aside any preconceived opinions they have about the Tesla CEO.

“Everybody seems to know Mr. Musk and have an opinion of Mr. Musk,” he says. “Not everybody’s opinion is good, not everybody’s is bad.”

Molo argues that the case is being decided for the “benefit of mankind as a whole,” rather than financial gain. He also called Musk a “legend in the tech world,” briefly touching on Musk’s upbringing and business ventures, such as SpaceX and Tesla.

— Samantha Subin

Judge Gonzalez Rogers is walking the nine jurors through basic court know-how.

“Anything you may see or hear when we are not in session is not evidence… you are to decide solely on the evidence received,” she said.

Gonzalez Rogers told jurors to take into account several factors, including the witnesses’ memory, bias, and interst in the outcome of the case.

— Samantha Subin

Of the 26 claims that Musk asserted in his 2024 lawsuit, only two remain: breach of charitable trust and unjust enrichment.

For the trust claim, Musk’s lawyers will argue that the roughly $38 million he donated to OpenAI formed a charitable trust that required the company to remain a nonprofit in perpetuity.

For the unjust enrichment claim, Musk’s attorneys will try to prove that OpenAI, Altman and Brockman used those contributions for unauthorized commercial purposes.

— Ashley Capoot

I just took my seat inside the courtroom. Musk, Altman and Brockman are here for the proceedings, and all three of them are wearing suit and tie.

Opening arguments will kick off shortly.

— Ashley Capoot

Gonzalez Rogers divided the trial into two parts: a liability phase and a remedies phase.

During the liability section, Gonzalez Rogers will determine whether OpenAI, Altman and Brockman are at fault. The jury will weigh in during this phase only, and its verdict will be advisory, which means Gonzalez Rogers will make the final decision.

If the liability phase is decided in Musk’s favor, the trial will proceed to the remedies phase. Gonzalez Rogers will hear arguments about what the appropriate consequences and next steps should be. Jurors will not participate in this phase, so they won’t hear any discussion about remedies. 

— Ashley Capoot

There is a long line of press, lawyers and members of the public waiting to get inside the federal courthouse before opening arguments begin.

– Ashley Capoot

Musk has sought several different remedies since he filed his lawsuit in 2024. Most recently, he’s asked for Altman and Brockman to be removed from their roles at OpenAI. He’s also asked Gonzalez Rogers to unwind the company’s October recapitalization, which solidified its structure as a nonprofit with a controlling stake in its for-profit business. 

In a January filing, Musk’s lawyers said he should receive up to $134 billion worth of “wrongful gains.” He has since asked to funnel “all ill-gotten gains” back into the OpenAI charity. 

The jury will not hear any discussion about Musk’s desired outcomes during the trial. Gonzalez Rogers will hear arguments about remedies if OpenAI, Altman and Brockman are found liable. 

— Ashley Capoot

Opening arguments will begin today. Attorneys for both parties will have time to present an overview of their case to the jury. 

The court will be in session from 8:30 a.m. PT to 1:40 p.m. PT, Gonzalez Rogers said Monday. If opening arguments conclude before then, Musk’s lawyers could call their first witness to the stand to testify.

It is not yet known who that witness would be, but both parties submitted their witness lists back in February. Musk’s attorneys named Musk, Brockman, Microsoft CEO Satya Nadella and a number of other executives and researchers.

— Ashley Capoot

CNBC’s Kate Rooney reports on the latest news ahead of the second day of the trial, with Elon Musk expected to take the witness stand.

Hours after the first day of trial wrapped up, the Wall Street Journal reported that OpenAI is falling short of internal revenue and user growth goals as it eyes an initial public offering later this year.

The report raises concerns about the company’s ability to support spending plans for its massive AI datacenter buildout, which is tied to technology giants such as Oracle and Nvidia. Shares of chip companies are lower on Tuesday following the report, dragging down the Nasdaq Composite.

OpenAI recently closed a massive $122 billion funding round at a $852 billion valuation.

— Samantha Subin

As court proceedings were getting set to begin on Monday, OpenAI announced a new wrinkle to its longtime relationship with key investor Microsoft.

As part of a revamped deal, OpenAI can cap the amount of revenue it shares with Microsoft when it comes to ChatGPT — and other — subscriptions. It will also be able to serve its products across any cloud provider. 

The agreement is the latest sign that the two companies are going their own way. In 2024, Microsoft started calling OpenAI a competitor in its financial filings, and the two frenemies have since found themselves battling in various areas.

— Ari Levy

Gonzalez Rogers was appointed by former President Barack Obama to U.S. District Court for the Northern District of California in 2011. 

She has overseen several high-profile lawsuits involving technology companies, including the 2021 antitrust case between Epic Games and Apple. 

During jury selection on Monday, Gonzalez Rogers was firm and made it clear that she intends to stick to a schedule. She cracked a few jokes, seemingly in an effort to make prospective jurors feel more comfortable.

Gonzalez Rogers got her undergraduate degree from Princeton University in 1987, and her law degree from the University of Texas in 1991.

—Ashley Capoot

Musk and Altman were close friends when they were among a group of techies who started OpenAI in 2015 as a nonprofit lab, “to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.” 

Three years later, Musk was out, after a failed effort to acquire OpenAI at his electric vehicle company Tesla. Then, in late 2022, OpenAI launched ChatGPT, and the commercialization race was on. Already backed by Microsoft, OpenAI raised tens of billions of dollars at valuations that have stretched far into the hundreds of billions.

Musk, for his part, founded xAI in 2023 to try and build a competitor to OpenAI, before suing Altman and the lab he helped start the next year.

Since the suit was filed, the two sides have been engaged in a bitter and public war of words, with Musk referring to his ex-friend as “Scam Altman,” and Altman posting in February that he was, “Really excited to get Elon under oath in a few months, Christmas in April!”

— Ari Levy

Nine jurors were seated for the trial after several hours of questioning on Monday.

Gonzalez Rogers and lawyers for both parties asked prospective jurors about their views on AI, Altman and Musk. Many said they were not familiar with OpenAI or its executives but expressed dislike for Musk, particularly because of his political activities. 

Musk spent more than $250 million to help President Donald Trump win the 2024 election. He also served a chaotic stint as the head of the Department of Government Efficiency, or DOGE, which aimed to dramatically slash government waste and spending. 

“The reality is people don’t like him,” Gonzalez Rogers said during the proceedings on Monday. She said she is confident that the jurors who were seated will respect the judicial process and the facts of the case.

— Ashley Capoot