In a pivotal moment of Elon Musk’s federal lawsuit against OpenAI, Microsoft CEO Satya Nadella took the stand on Monday, offering testimony that undercut OpenAI’s nonprofit defense. Musk accuses OpenAI and its president Sam Altman of defrauding him out of tens of millions of dollars by luring him into a nonprofit venture that later pivoted to a for-profit model, with Microsoft allegedly aiding the scheme. Nadella’s statements revealed that Microsoft always viewed its $13 billion relationship with OpenAI as a commercial deal — not a charitable partnership.
Key testimony from Nadella: He told the jury that Microsoft’s involvement with OpenAI was “risky, innovative, and lacking sufficient funding,” and that the company was excited because “no one else was willing.” Crucially, Nadella emphasized that Microsoft never made donations; it was a “commercial arrangement.” This directly challenges Musk’s claim that OpenAI betrayed its nonprofit charter. A January 2023 internal Microsoft memo, projected to the board by President Brad Smith, showed the company expected a $92 billion return on its cumulative investment. That stake is now worth an estimated $135 billion — a 27% share of OpenAI’s for-profit arm, valued at $852 billion after a March 2026 funding round.
Musk’s lead attorney, Steven Molo, used Microsoft’s own documents to paint a picture of a calculated takeover. An email from Nadella in April 2022 revealed he did not want Microsoft to become the next IBM, with OpenAI seizing the dominant role. “With all due respect to Microsoft, do you really want Microsoft controlling digital superintelligence?” Musk asked from the stand. Yet Nadella maintained he was unaware of any full-time employees at OpenAI’s nonprofit as of March 2026, or of any grants, research, or open-sourced technology it produced.
Under cross-examination, Microsoft attorney Jay Jurata walked Nadella through three major milestones — the 2019 announcement, the 2020 GPT‑3 exclusive license, and the 2023 $10 billion investment — and asked each time whether Musk objected. Nadella said no each time. He also noted he and Musk have each other’s phone numbers.
The trial continues with Sam Altman expected to testify Tuesday or Wednesday. The advisory jury could reach a verdict by the week of May 18, with Judge Yvonne Gonzalez Rogers making the final ruling. A decision favoring Musk could imperil OpenAI’s planned IPO and potentially strip the for-profit arm of up to $180 billion, transferring it back to the nonprofit parent.
