OpenAI's Founding: A Billion-Dollar Bet on AI for Humanity
The story begins back in December 2015, when Elon Musk gathered the leading AI talent, including Sam Altman, Greg Brockman, and more, to launch a 501(c3) non-profit called OpenAI, with one goal in mind: advance digital intelligence to benefit all of humanity. At the time, nearly $1 BILLION was pledged by various backers, including Elon Musk, and was positioned as a counterbalance to big tech.
WIRED
@WIRED
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If OpenAI stays true to its mission, it will act as a check on companies like Google and Facebook
[From wired.com](https://t.co/0lihinLkZE
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The Rift That Changed OpenAI
By late 2017, the first cracks started to appear... building AGI (Artificial General Intelligence) would require boatloads of money, hundreds of thousands of GPUs, and massive data centers, as well as employing the world’s top talent. Internally, many investors discussed shifting the company towards a for-profit company so more capital could be raised. Many feared such a change would hinder OpenAI’s independence due to fiduciary obligations to investors. Ultimately, this led to Elon Musk withholding funding and stepping away. Publicly, the falling out was labeled a conflict of interest due to Musk's work with Tesla's AI team, but behind closed doors it was a power struggle over control and the company’s true mission.
CNBC
@CNBC
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Elon Musk is leaving the board of OpenAI, a non-profit dedicated to safe machine learning
[From cnbc.com](https://t.co/7Qfnuc5S6M
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Roughly a year after Elon Musk's departure, the company pivots and creates a 'capped-profit' limited partnership subsidiary -- which at the time was still technically controlled by its original non-profit board. Essentially, the goal was to open the door for investors. Nearly immediately, Microsoft invested $1 billion; others followed suit. During this time, OpenAI found major success with its GPT-3 model, launching the company in an upwards trajectory.
Sam Altman
@sama
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Wow just got access to GPT-3 and \my mind is blown\. Here are my thoughts on how everything is going to change:
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A Change of Mission?
Flash forward to 2025, the company shifts yet again with its new commercial arm becoming a Public Benefit Corporation (PBC), and with Microsoft grabbing roughly a 27% stake, causing OpenAI's valuation to soar, with estimates between $80 billion on the low end and $500 billion on the high. At the core, the non-profit still owns the controlling slices, but now Microsoft, a for-profit company, sits at the table.
OpenAI
@OpenAI
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We’ve created OpenAI LP, a new “capped-profit” company that allows us to rapidly increase our investments in compute and talent while including checks and balances to actualize our mission.
https://openai.com/blog/openai-lp/
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In February 2024, after observing the non-profit’s shift towards a more profit-oriented model, Elon Musk filed a lawsuit in California court against OpenAI, Sam Altman, and other related entities. He accused them of breaching the company’s founding agreement, violating their fiduciary duties, and abandoning the non-profit’s mission to assist Microsoft in its financial endeavors. Interestingly, Elon Musk isn't asking for a single penny from this lawsuit and wants all the earnings to go straight back to the non-profit. In defense, OpenAI released 2017 emails alleging that Elon Musk himself pushed for a for-profit structure early on.
Elon Musk
@elonmusk
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Btw, the proceeds of any legal victory in the OpenAI case will be donated to charity. I will in no way enrich myself.
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The Courtroom Showdown:
As of today, April 28, 2026, the jury selection has kicked off this week in court. Opening arguments are expected to be heard any day now, and the full trial is expected to run through mid-May. Elon Musk has dropped the fraud claims in order to streamline the fight, with only the core claims remaining. The jury will have to decide on whether the matter is a breach of charitable trust and unjust enrichment.
In the wake of the lawsuit, Microsoft and OpenAI released a massive amended partnership deal with Microsoft no longer being OpenAI's exclusive cloud provider, opening doors for the company to sell its technology to Amazon, Google, and other companies. The timing has drawn immediate attention from court watchers, coming on the very day the case accusing Microsoft of helping turn OpenAI into a profit-driven machine finally reached the jury.
Insider Paper
@TheInsiderPaper
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Microsoft and OpenAI announced a major revision of their landmark partnership on Monday, freeing the ChatGPT-maker to serve customers across competing cloud platforms.
[From insiderpaper.com](https://t.co/N1Tw5zIkoA
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Whats to come?
Regardless of the lawsuit outcome, the whole world will be watching, as this lawsuit will decide whether the AI revolution's founding promise of true altruism will hold up to time and corporate interests. Which side are you on?
Sources:
- BBC
- CNBC
- OpenAI (official blog)
- CNBC
- OpenAI (official blog)
- Courthouse News Service
- X (Elon Musk’s official post)
- Insider Paper
- Microsoft (official blog)
- Reuters
- Business Insider
