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Reading: Internal Struggles at OpenAI: The 2017 Conflict That Sparked Musk’s Lawsuit
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Internal Struggles at OpenAI: The 2017 Conflict That Sparked Musk’s Lawsuit

News Desk
Last updated: May 6, 2026 9:37 pm
News Desk
Published: May 6, 2026
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In late August 2017, significant discussions unfolded within OpenAI, then a nascent nonprofit research lab, as its founding members considered the establishment of a for-profit entity to commercialize the organization’s pioneering technology and secure the necessary funding to pursue artificial general intelligence (AGI). Elon Musk, one of the co-founders, was adamant about obtaining full control of this for-profit arm, a demand that sparked intense negotiations among the group.

During the tense meeting, Musk, who had just gifted a Tesla Model 3 to each co-founder, expressed his desires with forcefulness. Meanwhile, CTO Greg Brockman noted the atmosphere around Musk’s attempt to woo his colleagues while he and Sam Altman were jockeying for influence over OpenAI’s future. In a bid to foster goodwill, OpenAI’s head of research, Ilya Sutskever, had even arranged to present a painting of a Tesla to Musk.

However, the meeting quickly turned confrontational when Musk was informed that the other founders would not acquiesce to his demand for command over the company. Brockman recounted Musk’s abrupt reaction, describing an unsettling moment when Musk angrily declared, “I decline,” before laboriously pacing around the table. Tensions escalated as Musk snatched the painting and ominously asked Brockman about his timeline for departing OpenAI.

Despite the mounting pressure, Brockman and Sutskever chose to stand their ground, ultimately deciding against aligning with Musk’s vision. In the fallout, Musk halted his contributions to OpenAI’s operating budget and stepped down from the board within six months, although he continued financially supporting the shared office space with Neuralink until 2020.

As the ongoing legal struggle regarding the future of OpenAI unfolds, attention has turned to that pivotal period in 2017, characterized by discord among the original co-founders regarding the governance of the organization. Although Sam Altman has yet to publicly address these matters, Brockman provided testimony over two days, referencing a personal journal that reveals the inner workings of a tech executive caught in a fierce battle with Musk.

Reflecting on the fallout, Brockman expressed the emotional toll of the trial’s publicity, labeling the contents of his journal as intimate thoughts meant for private contemplation rather than public display. Despite this discomfort, he maintained that there was nothing within the writings for which he felt ashamed.

The revealing exchanges between Musk and the OpenAI team have shed light on the cutthroat dynamics often concealed within the tech startup world, particularly as OpenAI evolved into a company of global significance. Tensions resurfaced with the disclosure of a text message Musk sent to Brockman two days before trial proceedings commenced, ominously warning that both Brockman and Altman would become “the most hated men in America” if events unfolded as he feared.

While this threatening message may not enter the jury’s consideration, Musk’s legal team has attempted to frame the narrative such that Altman and Brockman are portrayed as having wronged Musk, claiming that they effectively “stole a charity” from him. Conversely, OpenAI’s defense aims to illustrate that Musk had similar aspirations to commercialize the organization.

The friction stemmed partly from a breakthrough when an OpenAI model bested the world’s leading player in the video game DOTA II, leading to the recognition within the organization that the right computational resources were crucial for developing advanced AI tools. Brockman asserted that the existing nonprofit structure would not suffice for necessary fundraising initiatives. Musk sought uncompromising control over the proposed for-profit subsidiary, while the other co-founders suggested a more equitable ownership structure.

Disagreements magnified, culminating in a schism in their partnership when Musk was denied the control he sought, leading to their eventual split. Brockman’s testimony highlighted his reflections during that tumultuous period, revealing concerns over whether one individual should wield absolute power over OpenAI. This insight extended to discussions around possibly removing Musk from the board, which ultimately never materialized.

Musk voluntarily departed the board in February 2018, expressing doubts about OpenAI’s future and indicating his intention to redirect his focus to AI initiatives at Tesla. Brockman later shared personal musings on his ambitions and desires, contemplating his fulfillment in the tech leadership role and hinting at his aspirations for a future worth a billion dollars.

This self-reflection drew scrutiny from Musk’s attorneys, who seized upon Brockman’s contemplation of wealth to suggest he was prioritizing personal financial gain over the mission of the nonprofit. Brockman, whose stake in the company has ballooned to nearly $30 billion, defended his decisions by emphasizing OpenAI’s substantial valuation fueled by collective hard work.

The courtroom drama continued as Musk’s legal team attempted to highlight inconsistencies in Brockman’s commitments to contribute financially to OpenAI, juxtaposing them against his prominent donations to a political action committee supporting former President Donald Trump, though this aspect was not explored in detail during the trial.

As the proceedings advance, Musk’s legal counsel has portrayed Brockman as lacking a thorough understanding of governance, a claim that Brockman refuted by asserting Musk’s ignorance regarding AI developments. Brockman recounted Musk’s lack of insight during a presentation of early software that ultimately evolved into ChatGPT, asserting that such oversight posed risks in a rapidly evolving environment.

The legal saga began in earnest following the establishment of OpenAI’s for-profit subsidiary in 2019, where the organization successfully raised $1 billion from Microsoft, followed by an additional $13 billion over the ensuing years—solidifying OpenAI as a leader in the AI sector. However, the lucrative deals further fueled Musk’s suspicions that he had been outmaneuvered, leading him to file a lawsuit against his co-founders in 2024. The trial is poised to continue for the ensuing week as the legal battle for the future of OpenAI unfolds.

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