Elon Musk testified in a U.S. District Court in Oakland, California, during a civil lawsuit alleging fraud at OpenAI [1, 2].
The case centers on whether the artificial intelligence company illegally shifted assets from its original nonprofit charity to a for-profit entity. Because the lawsuit seeks $150 billion in damages [1], the outcome could redefine the legal boundaries between charitable foundations and corporate ventures in the tech sector.
Musk took the witness stand on Tuesday, April 28, 2026 [2]. His testimony lasted more than seven hours over the course of three days [1]. During the proceedings, Musk said that OpenAI executives stole assets from the nonprofit organization that originally funded the company [1, 3].
"It's not ok to 'loot a charity,'" Musk said [2]. He further questioned the legal implications of the company's transition, asking, "Do you want to set legal precedent that it's fine to loot a charity?" [4].
Musk, a co-founder of OpenAI, expressed regret over his early involvement with the organization. "I was a fool for funding OpenAI," Musk said [3].
The lawsuit targets OpenAI and its CEO, Sam Altman, claiming the leadership defrauded investors by abandoning the organization's nonprofit mission [1, 3]. Musk said that the shift to a for-profit model constitutes a misappropriation of the assets intended for the public good, a move he describes as looting.
OpenAI's leadership has faced scrutiny over the transition, though the company has maintained its commitment to the safe development of AI. The court in Oakland will now weigh Musk's testimony against the company's defense of its corporate restructuring [1, 2].
“"It's not ok to 'loot a charity.'"”
This legal battle highlights a fundamental tension in the AI industry: the conflict between the 'open' nonprofit ideals used to attract early talent and funding and the immense capital requirements of scaling large-scale AI models. If the court finds that OpenAI misappropriated charitable assets, it could trigger a wave of similar lawsuits against other 'hybrid' tech organizations and force a stricter legal separation between nonprofit research and commercial productization.
