Microsoft CEO Satya Nadella Testifies in Elon Musk’s OpenAI Lawsuit

Microsoft CEO Satya Nadella testified in a California federal court on Monday during the third week of Elon Musk’s lawsuit against OpenAI. Nadella stated that OpenAI executives did not provide clear reasons for firing Sam Altman as CEO in November 2023. The OpenAI board had cited Altman’s lack of consistent candor in communications as the reason for his removal.

Key Highlights

• Satya Nadella testified OpenAI gave unclear reasons for Sam Altman's 2023 firing.
• Microsoft held a 27 percent stake in OpenAI valued at about $135 billion in October 2023.
• Elon Musk accused Microsoft of aiding OpenAI in breaching charitable trust.
• OpenAI reinstated Altman after most employees threatened to leave for Microsoft.
• OpenAI co-founder Ilya Sutskever reversed his decision to remove Altman as CEO.

Microsoft, an early investor in OpenAI since 2019, held about 27 percent of OpenAI’s for-profit unit as of October 2023. This stake was valued at approximately $135 billion. Nadella told the court that the explanation for Altman’s firing was insufficient, given Microsoft’s deep partnership and investment in the company.

Microsoft’s Response to OpenAI Leadership Change

After Altman’s removal, Nadella expressed surprise at the decision. He attempted to contact OpenAI executives for more information but did not receive satisfactory answers. Nadella described the communication as unprofessional and suggested that jealousy or poor communication may have played a role.

Following Altman’s departure, Nadella announced that Microsoft would hire both Sam Altman and former OpenAI president Greg Brockman. However, OpenAI reinstated Altman as CEO after hundreds of employees threatened to leave for Microsoft.

Elon Musk’s Concerns and Court Testimony

Elon Musk’s lawsuit names Microsoft as a defendant, accusing the company of aiding an alleged breach of charitable trust by OpenAI. Musk testified that he worried Microsoft’s investment could lead to a takeover of OpenAI. He stated, “I was concerned they were really trying to steal the charity.”

Nadella testified that Musk did not contact him directly about these concerns. When asked if Musk had his contact information, Nadella confirmed they had each other’s phone numbers.

Historical Context and Internal OpenAI Decisions

During the trial, Musk’s attorney referenced a 2022 email from Nadella to Microsoft executives. Nadella wrote, “I don’t want to be IBM and OpenAI to be Microsoft.” This referred to IBM’s 1980 agreement to distribute Microsoft’s DOS, which helped Microsoft surpass IBM in prominence. Nadella agreed with the comparison in court.

OpenAI co-founder Ilya Sutskever also testified. He explained that he voted to remove Altman due to a pattern of dishonesty and internal conflict. Sutskever later changed his position after nearly all OpenAI employees threatened to leave if Altman was not reinstated. Sutskever said he supported Altman’s return to prevent the company’s collapse.

OpenAI chairman Bret Taylor also testified about the challenging period following Altman’s removal. Taylor is expected to finish his testimony on Tuesday, with Sam Altman scheduled to testify the same day.