Microsoft CEO Satya Nadella testifies in Musk-OpenAI trial:

OAKLAND, Calif. — Microsoft CEO Satya Nadella took the witness stand Monday in a trial over control of artificial intelligence startup OpenAI, making him the third tech billionaire to testify in the closely watched trial in as many weeks.

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Nadella’s testimony follows earlier appearances by Elon Musk, CEO of Tesla and SpaceX and co-founder of OpenAI, and Greg Brockman, chairman and co-founder of OpenAI.

A fourth billionaire, Sam Altman, co-founder and CEO of OpenAI, is expected to testify later this week.

The lawsuit centers on Musk’s claims that OpenAI, the creator of ChatGPT, has strayed from its original mission as a nonprofit research center. Musk claims Altman and Brockman are enriching themselves at the expense of what he says was supposed to remain a charity.

Altman and Brockman say 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 lawsuit after launching his own AI company, xAI, which is now part of SpaceX. They also say that Musk agreed with them on the need to create a for-profit arm, but wanted to be the one to control it.

Microsoft is a co-defendant in this case thanks to its partnership with OpenAI. Musk alleges that Microsoft had 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 said it was not aware of any conditions that Musk, as a donor to OpenAI, might have imposed on his charitable contributions. The company says it therefore did not intend to encourage Altman and Brockman to violate their obligations.

On the witness stand, Nadella said OpenAI maintains its independence even as the Microsoft-OpenAI partnership deepens over time.

“OpenAI had all the rights and resources they’ve ever 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 released ChatGPT.

Musk complained publicly in 2020 that OpenAI appeared to have been captured.

“This seems to be the opposite of open. OpenAI is essentially captured by Microsoft,” Musk wrote on Twitter, now X, in September of that year.

The following month, according to notes from an October 2020 meeting presented as pretrial evidence, Nadella discussed Musk’s views on “closed openings” and said it was worth thinking about, after not wanting to “get drawn into something,” according to notes from the October 2020 meeting presented during the pretrial meeting. U.S. District Judge Yvonne Gonzalez Rogers cited the notes as “considerable evidence” in sending the case against Microsoft to trial.

The closeness between Microsoft and OpenAI has been evident at other times. In 2023, when Altman was briefly ousted as CEO of OpenAI, Nadella highlighted in a podcast 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, Shivon Zilis, an advisor to Elon Musk and former OpenAI board member, cited this podcast interview as a moment when the Microsoft-OpenAI partnership gave him pause.

Nadella testified Monday that his statement on the podcast came in the context of Microsoft customers fearing that OpenAI would disappear during the November 2023 crisis at the company.

“It’s my job to try to make customers understand that they can count on Microsoft,” he said. “It had nothing to do with control.”

Musk filed a lawsuit in 2024, claiming his past donations to OpenAI totaling $38 million gave him a vested interest in it remaining a nonprofit research center. He had also founded xAI a year earlier.

Nadella became CEO of Microsoft in 2014, succeeding Steve Ballmer. He has a net worth of $1.3 billion, according to Forbes magazine.

Evidence in the trial is expected to conclude Wednesday, with closing statements to the nine-member jury expected Thursday.