OpenAI trial reveals 1 CEO's 'chaos' amid $150 billion lawsuit

Testimony from a former top executive alleges CEO Sam Altman intentionally fostered chaos and distrust within OpenAI's leadership.

A former technology chief for OpenAI testified that CEO Sam Altman cultivated an environment of "persistent chaos" and distrust among senior executives, according to videotaped testimony presented Wednesday in a California federal court. The testimony adds a contentious new layer to the $150 billion lawsuit filed by Elon Musk against the artificial intelligence powerhouse.

"My concern was about Sam saying one thing to one person and completely the opposite to another person," Mira Murati, who briefly served as OpenAI's interim CEO, said in the recorded deposition. Murati, who has since left to co-found a new AI startup, accused Altman of being deceptive and pitting executives against one another, which she said put the company at "catastrophic risk of falling apart."

The testimony is a central element of the trial stemming from Musk's 2024 lawsuit, which argues OpenAI betrayed its founding mission by transitioning from a nonprofit to a for-profit entity. Musk, a co-founder who was crucial to the startup's early funding, is seeking $150 billion in damages from OpenAI and its key investor, Microsoft Corp., to be funneled back into the original nonprofit. The lawsuit pits OpenAI directly against Musk's own competing startup, xAI.

This legal battle could reshape the future of the generative AI sector, where OpenAI's ChatGPT has become a dominant force, influencing everything from business software to government operations. The internal turmoil, first exposed during Altman's brief ouster by the board in November 2023, now carries a specific price tag, highlighting the immense financial stakes tied to the governance of the world's leading AI company.

Leadership Under Fire

Murati's testimony paints a picture of a dysfunctional executive suite, corroborating claims of deep-seated conflicts among the company's leadership. She affirmed that Altman undermined her authority as technology chief and created internal strife. Despite this, she testified that she wished for him to remain as CEO and had pressed the board for a clearer explanation for his sudden removal, fearing the company would "completely blow up."

The trial has become a public airing of the company's internal fractures. Testimony from co-founders like Musk and OpenAI President Greg Brockman has detailed a series of disagreements over the company's direction and growth. Revelations have included Musk's failed attempt to settle with Brockman just days before the trial and Musk's own admission of feeling like "a fool" for his early financial backing of the startup.

Investor and Market Implications

The ongoing courtroom drama creates significant uncertainty for OpenAI and its primary commercial partner, Microsoft. While the legal proceedings directly threaten OpenAI's corporate structure, the detailed accounts of executive infighting could have a more immediate impact on investor confidence and talent retention. The stability of the leadership team that produced ChatGPT is now in question, potentially affecting the company's product roadmap and its ability to execute.

For Microsoft, which has integrated OpenAI's technology across its product suite, the trial represents a major governance risk in a key partner. The outcome could hinder the commercial ambitions of a primary competitor to other tech giants and Musk's xAI, which recently merged with SpaceX. The proceedings serve as a stark reminder of the governance risks inherent in the fast-moving, high-stakes world of artificial intelligence development.

This article is for informational purposes only and does not constitute investment advice.