Musk v Altman 4:24-cv-04722

OpenAI's 2016 IRS Form 1023 confirms Altman 'founded Hydrazine Capital' before his OpenAI role; found in Microsoft-produced discovery document MSFT MUSK000036559

OpenAI's September 1, 2016 IRS Form 1023 tax exemption application (Supplemental Responses), produced in discovery as MSFT MUSK000036559 (Hawes Decl. Ex. 24, filed as Doc 379-95), states Sam Altman's qualifications as Director include: 'Mr. Altman also founded Hydrazine Capital. He studied computer science at Stanford, and while there worked in the AI lab.' This is the primary identified filing-of-record reference to Hydrazine Capital in this case.

Altman appointed himself manager of OpenAI Startup Fund I, L.P. ($175M fund), in which Microsoft also holds a significant interest

Altman named himself as manager of OpenAI Startup Fund I, L.P., which raised $175,250,000 and in which Microsoft holds a significant ownership interest. SAC ¶123. The OpenAI Startup Fund I, L.P. is one of the for-profit entities in which Altman allegedly controls an interest and from which he stands to personally profit. OpenAI Startup Fund Management, LLC managed the fund (formed Jul 16, 2021, principal at 3180 18th Street, SF, CA 94110).

OpenAI transferred substantially all IP and employees from nonprofit to for-profit (OpenAI LP) in 2019 without disclosing to Musk; profit cap set 'north of $250 billion'

After Musk resigned Feb 20, 2018, OpenAI transferred substantially all IP 'that was developed at the nonprofit at that point' and all employees to the for-profit entity OpenAI LP (publicly announced March 11, 2019). The nonprofit retained an uncapped residual equity interest. The LP's profit cap was 'north of $250 billion' — effectively giving investors all returns until that cap, with residual only then going to the nonprofit. OpenAI never disclosed to Musk that it had transferred 'substantially all' assets. Source: SJ Order Doc 390 pp.5-6.

Microsoft invested $13.75B total in OpenAI (2019-2024) with target redemptions of $92B+ and broad IP/computing rights through JDCAs

Microsoft committed $1B to OpenAI LP (July 2019) with $20B target redemption (20x multiple); $2B additional in March 2021 with $12B target (6x); $10B in January 2023 to OpenAI Global LLC with $60B target (increasing 20%/yr from Jan 2025); additional $750M in late 2024. Each investment accompanied by Joint Development and Collaboration Agreement (JDCA) granting Microsoft exclusive cloud computing, IP commercialization, and supercomputing build rights. Total target redemption across investments: $92B+. Source: SJ Order Doc 390 pp.7-8; Pretrial Statement Doc 427 ¶¶30-47.

Altman holding companies own 15% of Humane (hardware) and he held a significant interest in Rain AI when OpenAI signed a $51M chip deal — alleged undisclosed self-dealing

SAC ¶138: In 2020, Altman invested in hardware company Humane (which plans to power devices with OpenAI software). Holding companies controlled by Altman own 15% of Humane's equity — a greater amount than each of the company's founders. SAC ¶137: In 2019, Altman caused OpenAI to sign a $51 million AI chip deal with Rain AI, a company in which he held a significant interest. Source: SAC Doc 170 ¶¶137-138.

Aestas LLC (employee vehicle) received $150B target redemption in OpenAI Global, LLC on Jan 23, 2023; mechanism for employee/founder equity interests

Aestas, LLC (OpenAI's employee vehicle, formerly Aestas, L.P.) became a member of OpenAI Global, LLC on January 23, 2023 and received a membership interest entitling it to receive a target redemption amount of $150 billion. OpenAI Holdings, LLC members include Aestas, LLC and 'various individuals.' Aestas Management Company, LLC (formed Feb 10, 2023) is managed by OpenAI GP, L.L.C. Source: Pretrial Statement Doc 427 ¶45; SAC Doc 170 ¶119.

Altman and Brockman allegedly hold significant ownership interests in Stripe, which OpenAI selected as its payment processor in March 2023

SAC ¶140: On or before March 15, 2023, OpenAI selected Stripe as its commercial partner to process payments as OpenAI monetized ChatGPT. On information and belief, both Altman and Brockman hold 'significant ownership interests' in Stripe. Source: SAC Doc 170 ¶140.

Altman holds ~7.6% of Reddit; OpenAI-Reddit deal boosted Altman's position by ~$69M — alleged undisclosed self-dealing conflict

SAC ¶135: Altman induced OpenAI to strike a deal with Reddit (2024) to license Reddit content for ChatGPT training. On information and belief, Altman and/or entities he controls own approximately 7.6% of Reddit — making him one of its largest outside shareholders. After the deal was announced, Reddit stock rose 10%, boosting Altman's stake by ~$69M. Reddit posted its first profit Oct 29, 2024 (40%+ stock increase), partly due to OpenAI revenue. Source: SAC Doc 170 ¶135.

OpenAI Group PBC formed Oct 28, 2025 at ~$500B valuation; Microsoft received equity stake in new public benefit corporation

OpenAI recapitalized its for-profit subsidiaries into OpenAI Group PBC (public benefit corporation, Delaware) on October 28, 2025. Valuation at recapitalization: approximately $500 billion. Microsoft and other investors received equity stakes. Microsoft entered a nonbinding MOU in September 2025 to potentially convert investments to equity in the successor PBC. Source: SJ Order Doc 390 p.8; Pretrial Statement Doc 427 ¶55.

Plaintiff's damages range: $78.8B to $134.49B disgorgement (OpenAI + Microsoft) plus punitive damages, per Wazzan expert methodology

Plaintiff's pretrial statement sets disgorgement range at $65.50B-$109.43B from OpenAI defendants and $13.30B-$25.06B from Microsoft, totaling $78.80B-$134.49B. Expert: Dr. C. Paul Wazzan. Methodology: quantifies 'portion of Defendants' profits or enrichment that may fairly be attributed to Mr. Musk's contributions.' Punitive damages also sought. Source: Pretrial Conference Statement Doc 427, p.5.

Altman's 2025 declaration: confirmed confidentiality-tied investor restrictions on competing investments — key to antitrust Phase 2 claims and xAI trade secrets litigation

October 2024 OpenAI closed a $6.6 billion funding round. Altman declared (under perjury, Doc 107-1) that he did NOT condition investor participation on forgoing investment in xAI, but admitted certain investors granted ongoing access to OpenAI confidential information were told their information rights would be terminated if they made 'non-passive investments' in OpenAI competitors. This restriction is at issue in xAI's related trade secrets action (3:25-cv-08133) and in the Phase 2 antitrust claims.

OpenAI counterclaims allege Musk poached employees, used confidential access, and launched unsolicited $97.4B bid for OpenAI assets in early 2025

OpenAI filed Amended Counterclaims against Elon Musk and X.AI Corp. (Dkt. #229, Aug 15, 2025) alleging: (1) Musk deployed and poached OpenAI employees for his for-profit companies; (2) Musk pressured OpenAI to abandon the organization and pursue AGI at Tesla; (3) after leaving in 2018, Musk invoked status as former contributor to gain access to confidential OpenAI information while covertly building xAI; (4) Musk launched an 'unsolicited bid for OpenAI, Inc.'s assets in early 2025.' These counterclaims in Phase 2 will be tried separately.

xAI filed separate trade secrets action against OpenAI (Sep 2025, same judge YGR); related to employee poaching claims in both directions

X.AI Corp. v. OpenAI, Inc. et al., 3:25-cv-08133-YGR (N.D. Cal., filed Sep 24, 2025) — trade secrets misappropriation action. Also, 3:25-mc-80299 (N.D. Cal., Sep 26, 2025) — xAI application for subpoena to OpenAI. Both before Judge YGR (same judge as Musk v. Altman). OpenAI's Phase 2 counterclaims also include tortious interference with prospective economic advantage and unfair competition against Musk/xAI.

Plaintiff moving to exclude AG decisions at trial; CA AG (Bonta) and DE AG (Jennings) are named parties — both approved the OpenAI PBC conversion

Plaintiff's Motion in Limine No. 1 seeks to exclude 'Evidence of Attorney General Decisions' (Dkt. 402). This reflects that there exist AG decisions — likely California and/or Delaware AG approvals of the OpenAI for-profit conversion/PBC recapitalization — that OpenAI wishes to use as evidence at trial. The two AGs (Rob Bonta, CA; Kathleen Jennings, DE) are both named parties in the case, suggesting they intervened to address the for-profit conversion.

Brockman September 2017 personal journal: contemplated getting out from Musk and asked 'what will take me to $1B?' while publicly committing to nonprofit structure

Brockman wrote in his personal files in September 2017, while simultaneously assuring Musk OpenAI would remain a nonprofit: 'This is the only chance we have to get out from Elon. Is he the glorious leader that I would pick? We truly have a chance to make this happen. Financially, what will take me to $1B? ... Accepting Elon's terms nukes two things: our ability to choose (though maybe we could overrule him) and the economics.' Cited in SJ Order Doc 390 at p.4, Hawes Decl. Exs. 46, 24; Brockman Dep. Tr. 218:11-219:7.

Musk's Sep 2017 ultimatum email and Altman's reassurance email that he 'remains enthusiastic about the non-profit structure' — key deception evidence

On September 20, 2017, Musk sent an email to Altman and Brockman: 'Guys, I've had enough. This is the final straw. Either go do something on your own or continue with OpenAI as a nonprofit. I will no longer fund OpenAI until you have made a firm commitment to stay or I'm just being a fool who is essentially providing free funding for you to create a startup. Discussions are over.' Altman responded the next day: 'i remain enthusiastic about the non-profit structure!' Source: SJ Order Doc 390 p.3, Wiener Decl. Exs. 41, 40.

Brockman November 2017 personal journal: admitted internally 'the true answer is that we want [Musk] out' and that committing to nonprofit would be 'a lie'

After November 6, 2017 meeting where Brockman reaffirmed commitment to nonprofit to Musk, Brockman wrote in personal notes: 'conclusion is we truly want the b-corp... cannot say that we are committed to the non-profit. don't want to say that we're committed. if three months later we're doing b-corp then it was a lie.' He further wrote: 'the true answer is that we want [Musk] out.' Days later under heading 'our plan': 'it would be nice to be making the billions' and 'we've been thinking that maybe we should flip to a for profit.' Cited: SJ Order Doc 390 pp.4-5, Hawes Decl. Exs. 43, 45, 24.

Microsoft CTO Scott March 2018 email acknowledged OpenAI donors 'can't imagine' they funded a 'closed, for profit thing' — key evidence of Microsoft's knowledge of the breach

Microsoft CTO Kevin Scott, in early March 2018 (shortly after Musk resigned from OpenAI board), emailed about Altman's plans for a commercial AI venture: 'I wonder if the big OpenAI donors are aware of these plans? Ideologically, I can't imagine that they funded an open effort to concentrate [machine learning] talent so that they could then go build a closed, for profit thing on its back.' Court cited this as evidence of Microsoft's actual knowledge in denying Microsoft's SJ on aiding/abetting. Source: SJ Order Doc 390 p.25, fn.17; Eynon Decl. Ex. 1.

Feb 2022 Altman-Microsoft communication: plan to 'Remove Nonprofit from formal control to mitigate private benefit risk' — shared with Microsoft before PBC conversion

In February 2022, Altman shared plans with Microsoft to restructure OpenAI 'to address some of the challenges we've faced with our unusual structure (a nonprofit being in control of an LLC) as we become a more commercial effort.' One objective was to '[r]emove [the] Nonprofit from formal control to mitigate private benefit risk.' Cited as evidence of Microsoft's advance knowledge of OpenAI's for-profit transition. Source: SJ Order Doc 390 p.8; Eynon Decl. Exs. 36, 37.

OpenAI Global, LLC has two members: Microsoft and OAI Corporation; OAI Corporation is 100% owned by OpenAI Holdings, LLC; OpenAI Holdings members include Aestas LLC and unnamed individuals

OpenAI Global, LLC formed Dec 28, 2022 has two members: Microsoft and OAI Corporation. Investors' interests in OpenAI LP were transferred to OpenAI Global, LLC. OpenAI Holdings, LLC (formed Mar 17, 2023) is the sole owner of OAI Corporation (converted from LLC to corporation Sep 2023). OpenAI Holdings, LLC members include Aestas, LLC and 'various individuals.' Aestas Management Company, LLC (formed Feb 10, 2023) is also managed by OpenAI GP, L.L.C. Source: SAC Doc 170 ¶¶116-122; Pretrial Statement Doc 427 ¶¶8-9.

Deannah Templeton (Microsoft VP) served dual role at OpenAI and Microsoft; Reid Hoffman sat on both OpenAI board and Microsoft board simultaneously — alleged coordination mechanism

The SAC also names Deannah Templeton (Microsoft VP of Partnerships, Washington) as a defendant, alleging she served as Microsoft's agent tasked with representing Microsoft at OpenAI, served as director or officer of OpenAI, Inc. while also serving Microsoft, and was an alter ego of Scott [presumably Kevin Scott, Microsoft CTO]. Also names Reid Hoffman: general partner at Greylock, former OpenAI board member (Mar 2019 - Feb 2023), Microsoft board member since March 2017, and co-founder of Inflection AI. Source: SAC Doc 170 ¶¶482-485, 4988-4997.

SJ Order Jan 15, 2026: All OpenAI Phase 1 claims survive; Microsoft aiding/abetting claim survives; trial proceeds April 27, 2026

Judge Gonzalez Rogers denied OpenAI defendants' motion for summary judgment on all four Phase 1 claims: breach of charitable trust, constructive fraud, fraud, and unjust enrichment. Court found genuine disputes of material fact on Musk's standing as settlor, whether charitable trust existed, whether defendants misled Musk, and limitations period. Microsoft's MSJ granted on tortious interference and unjust enrichment but denied on aiding/abetting breach of fiduciary duty.