Altman's Sworn Testimony Puts OpenAI's Nonprofit-to-Profit Conversion on Trial
First sworn public account of OpenAI's governance breakdown creates legal precedent risk for nonprofit-to-capped-profit conversions across the AI industry.
4. Altman's Sworn Testimony Puts OpenAI's Nonprofit-to-Profit Conversion on Trial
Sam Altman took the stand in federal court on May 13, 2026, offering the first sworn public account of OpenAI's founding breakdown with Elon Musk. Altman testified that after Musk departed the OpenAI board in 2018, the nonprofit was effectively "left for dead," with Musk unwilling to provide the capital needed to compete at scale. Musk, who filed suit against Altman and co-founder Greg Brockman, claims the two attempted to "steal a charity" by engineering the 2019 conversion to a capped-profit structure that now underpins OpenAI's $300 billion valuation.
The strategic weight here sits with regulators, not just the courts. California and Delaware attorneys general have both signaled scrutiny of OpenAI's pending full conversion to a for-profit public benefit corporation. Altman's testimony, now part of the public record, hands those offices a detailed internal account of governance decisions made when OpenAI controlled far fewer resources and far less market power. It also sets a template for how any AI nonprofit considering a similar structural shift will face questions about founder intent, donor expectations, and fiduciary duty. The nonprofit-to-profit conversion model, already used by Anthropic in structuring its public benefit corporation, is now contested legal territory.
Watch two things. First, whether the court compels disclosure of board communications from 2017 to 2019, which could surface details about fundraising promises made to early donors. Second, how OpenAI's ongoing conversion process in Delaware responds to the evidentiary record being built in this case. A ruling that finds even partial merit in Musk's "stolen charity" framing would give state regulators a legal hook to demand structural concessions before approving the conversion, slowing OpenAI's path to conventional equity financing.
Source: Altman details Musk's OpenAI fallout, says nonprofit was 'left for dead'