Nadella Testifies Musk Never Raised Microsoft Investment Concerns as OpenAI Trial Continues

Microsoft CEO Satya Nadella concluded his testimony Monday in the Musk v. Altman trial in federal court in Oakland, California, stating that Elon Musk never contacted him with concerns that Microsoft's investments in OpenAI violated any special terms or commitments.

Nadella answered questions for several hours covering Microsoft's early partnership with OpenAI, his understanding of the relationship between the two companies, and his role during the turbulent days in November 2023 when Sam Altman was briefly removed as OpenAI's chief executive.

In 2024, Musk sued OpenAI, Altman, and OpenAI President Greg Brockman, alleging they abandoned their commitment to protect the company's nonprofit structure and charitable mission. Microsoft is named as a defendant in the lawsuit, with Musk accusing the company of aiding and abetting OpenAI's alleged breach of charitable trust.

Microsoft has invested more than $13 billion in OpenAI, comprising a $1 billion investment in 2019, $2 billion in 2021, and $10 billion in 2023. Nadella testified he was "very proud" that Microsoft took the risk to invest when "no one else was willing" to back the early-stage lab.

When Musk took the stand late last month, he identified Microsoft's $10 billion investment as the moment he concluded OpenAI was violating its nonprofit mission. "I was concerned they were really trying to steal the charity," Musk said from the stand.

Nadella pushed back on that framing, testifying that he never considered Microsoft's investments to be donations and that a commercial dimension was built into the partnership from its inception. In the early years, he said, Microsoft gave OpenAI significant discounts on computing resources and expected to receive marketing benefits in return.

In a separate video deposition played in court Monday morning, Michael Wetter, a corporate development executive at Microsoft, said the company has recognized approximately $9.5 billion in revenue to date through its OpenAI partnership.

Nadella described being "pretty surprised" by the OpenAI board's decision to remove Altman in November 2023, and said his immediate focus was preserving continuity for Microsoft customers. He said he suspected jealousy and poor communication played a role in the board's decision, and he sought more detail from board members beyond the public statement that Altman had been "not consistently candid" in his communications with the board.

"It was sort of amateur city, as far as I'm concerned," Nadella testified.

The trial is unfolding against a backdrop of shifting dynamics between Microsoft and OpenAI. In October, OpenAI completed a recapitalization cementing its structure as a nonprofit with an equity stake in its for-profit business. At that time, Microsoft disclosed it held roughly a 27% stake in OpenAI's for-profit unit, valued at approximately $135 billion.

On the same day jury selection began in the Musk v. Altman case late last month, the two companies announced a revamped partnership agreement allowing OpenAI to cap revenue-share payments and serve customers across any cloud provider — a move that underscored the evolving nature of the relationship.

Musk co-founded OpenAI alongside Altman, Brockman, and others in 2015, before departing the board in 2018 following disagreements over the company's direction. He subsequently launched competing AI startup xAI, which he merged with his other ventures earlier this year. He has said he is not entirely opposed to OpenAI operating a for-profit unit, but testified that it became "the tail wagging the dog."

The trial is expected to continue with additional witnesses in the coming days, as the court weighs whether OpenAI and its backers breached the obligations of its founding charitable mission.

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