[0:00] Yesterday in a federal courthouse in
[0:01] Oakland, the trial of the century, Musk
[0:04] versus Altman, began its closing
[0:06] arguments. And so far, this trial has
[0:08] felt like a Silicon Valley episode
[0:10] written by someone on bath salts. The
[0:11] richest and sexiest man alive, Elon
[0:14] Musk, is currently suing a poor gay man,
[0:16] Sam Altman, and his friends at OpenAI
[0:18] and Microsoft for $134 billion.
[0:21] Elon says they stole an open-source
[0:23] charity and turned it into a
[0:25] closed-source money printer. While
[0:26] Altman says he owns no OpenAI equity and
[0:29] is just doing this because he loves it.
[0:31] I I'm doing this cuz I love it. The
[0:33] supporting cast includes Greg Brockman,
[0:35] who somehow owns $30 billion of the
[0:37] thing Sam doesn't own. Ilya Sutskever,
[0:39] the vibes-based AI safety priest. Mira
[0:42] Murati, Sam's Brutus. And Saadia
[0:44] Natella, the only adult in the room. And
[0:46] every single one of them has their
[0:47] texts, emails, and private diary entries
[0:50] entered into evidence. In today's video,
[0:52] we'll break down all the absurdities
[0:53] discovered throughout this lawsuit and
[0:55] find out who's going to win, probably.
[0:57] It is May 15th, 2026, and you're
[1:00] watching The Code Report. The Musk
[1:01] versus Altman lawsuit was filed 2 years
[1:03] ago in 2024, but the drama goes back
[1:06] over a decade. In 2015, Elon, Sam, Greg
[1:09] Brockman, and Ilya Sutskever founded
[1:11] OpenAI as a nonprofit to save humanity
[1:13] from evil. Elon donated $38 million,
[1:16] then tried to take it over, lost, rage
[1:18] quit the board in 2018, and started xAI.
[1:21] Meanwhile, OpenAI pulled this trick
[1:23] where they bolted a for-profit
[1:24] subsidiary onto the nonprofit, it cashed
[1:27] a $13 billion check from Microsoft, and
[1:29] is now approaching a valuation of nearly
[1:31] $1 trillion. In 2024, Musk couldn't take
[1:34] it anymore.
[1:39] I just can't do it. I can't take this
[1:41] no more, man. His claim is that
[1:43] Altman and Brockman stole a charity,
[1:45] breached a charitable trust, and
[1:47] Microsoft aided and abetted them. What
[1:49] he wants in return is a disgorgement of
[1:51] up to $134 billion, and plus they need
[1:54] to unwind the for-profit conversion and
[1:56] remove Altman and Brockman. But now
[1:58] here's the fun part. This trial's
[1:59] discovery has basically been a giant
[2:01] group chat leak between all these
[2:03] executives. In exhibit A, we have emails
[2:05] between Sam and Elon where we find out
[2:07] that OpenAI was almost called something
[2:09] entirely different. Elon wanted to call
[2:11] it Freethink and Sam wanted to call it
[2:13] Axon. But in hindsight, the best name
[2:15] for it would have been ClosedAI. In
[2:17] exhibit B from 2017, OpenAI's tech had
[2:19] just beat the best humans on Earth at
[2:21] Dota 2. Elon got a mega huge boner and
[2:23] emailed the team that it's time to take
[2:25] the next step for OpenAI, which
[2:27] translated into converting it from
[2:28] non-profit to for-profit with Elon as
[2:30] CEO and as the majority shareholder. But
[2:33] the craziest part is the meeting
[2:34] location. Quote, "The haunted mansion I
[2:36] just bought near San Francisco."
[2:38] According to Brockman's testimony under
[2:40] oath, the house was still littered with
[2:42] confetti and red solo cups from a party
[2:43] the night before and Amber Heard was
[2:45] there serving whiskey. And just a few
[2:47] weeks earlier, Elon had gifted each
[2:49] co-founder a brand new Tesla Model 3.
[2:51] But all this buttering up didn't work
[2:53] and eventually the other co-founders
[2:55] proposed equal equity. Ilya Sutskever
[2:57] had even commissioned a painting of a
[2:59] Tesla to give to Musk as a peace
[3:00] offering. But according to Brockman,
[3:02] their proposal made Elon furious. He
[3:04] quote, "stood up and stormed around the
[3:06] table. I thought he was going to hit me.
[3:08] He grabbed the painting and started to
[3:09] storm out of the room. And then he
[3:11] turned around and said, 'When will you
[3:12] be departing from OpenAI?'" Six months
[3:14] later, he would stop making donations
[3:16] and leave the OpenAI board. Now, in the
[3:18] years that followed between 2019 and
[3:20] 2021, Microsoft entered with a $1
[3:23] billion investment. Even though CEO
[3:24] Nadella was pretty skeptical of the
[3:26] actual value of this investment.
[3:28] Eventually he would double down though
[3:29] and in 2022 said he didn't want
[3:31] Microsoft to become the next IBM while
[3:34] OpenAI became the next Microsoft. But
[3:36] then around this time, we get another
[3:37] crazy character popping up, Shivon
[3:39] Zilis. And she's the mother of four of
[3:41] Elon's 14 children and used to be on the
[3:44] OpenAI board and kept Elon up to date on
[3:46] what was going on there, which became a
[3:47] big conflict of interest when he
[3:49] launched xAI. But this next exhibit is
[3:51] perhaps the most complex and
[3:53] In November 2023, Sam Altman was fired
[3:56] from OpenAI for 4 days before a pattern
[3:59] of behavior related to his honesty and
[4:01] candor. Ilya wrote a memo accusing him
[4:03] of a consistent pattern of lying and
[4:05] pitting his execs against each other.
[4:07] Meanwhile, Mira Murati snaked him from
[4:09] the inside. At the height of the chaos,
[4:11] Altman texted Mira, "Can you indicate
[4:13] directionally, good or bad?" Her reply
[4:15] is now immortal, "Directionally, very
[4:17] bad." Altman was fired and Mira took his
[4:19] place temporarily. But, Sam Altman was
[4:21] then reinstated a few days later after
[4:23] receiving a ton of support from OpenAI
[4:25] employees and other powerful people. As
[4:27] Satya Nadella, watching $13 billion of
[4:29] Microsoft's money swing in the wind,
[4:31] described the entire situation as,
[4:33] quote, "A sort of amateur city as far as
[4:35] I'm concerned." And that brings us to
[4:37] yesterday, the closing arguments of the
[4:38] trial. Elon himself wasn't there because
[4:41] he was on Air Force One flying to
[4:42] Beijing with Trump, but his lawyer
[4:44] focused on Altman's lack of
[4:45] trustworthiness and how he's been able
[4:47] to enrich himself through various deals
[4:49] in other companies he owns that are
[4:50] connected to OpenAI. But, on the flip
[4:52] side, OpenAI's lawyers claimed Elon is a
[4:54] guy who never cared about the nonprofit
[4:56] structure and only cared about winning.
[4:58] And he seems to have selective amnesia
[5:00] about his past dealings with the OpenAI
[5:02] founders. Basically, both sides are
[5:04] terrible, but who's actually going to
[5:05] win? Polymarket is giving Elon a 32%
[5:08] chance of winning, but I think it's even
[5:10] lower than that. The jury in this case
[5:11] is advisory, so that means it ultimately
[5:13] comes down to this judge, Yvonne
[5:15] Gonzalez Rogers. And I can tell just by
[5:17] looking at her that she's not going to
[5:18] like Elon. Her husband worked for the
[5:20] Obama administration, so this was over
[5:22] before it even started. But, even if
[5:24] Hulk Hogan was the judge, Elon's case is
[5:26] still pretty weak. What they've done to
[5:27] OpenAI is messed up, but here's the
[5:29] problem. Elon himself tried to make
[5:31] OpenAI for profit back in 2017. There
[5:33] was also never a hard contract that
[5:35] OpenAI would stay nonprofit forever. And
[5:37] even worse, he admitted under oath that
[5:40] xAI and Grok did steal OpenAI models,
[5:43] and that makes this whole lawsuit feel
[5:44] like it's trying to a competitor
[5:46] as opposed to rescuing a charity. No
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[6:41] the Code Report. Thanks for watching and
[6:43] I will see you in the next one.