A federal jury in San Francisco will begin deliberating as early as Monday, June 2, on whether to remove Sam Altman as OpenAI’s chief executive and unwind the company’s conversion from a nonprofit into a for-profit entity backed by roughly $500 billion in committed capital. Closing arguments wrapped late last week in the United States District Court for the Northern District of California, and the stakes extend far beyond the two men at the center of the fight: a verdict for Elon Musk could call into question one of the largest corporate restructurings in American history, while a verdict for OpenAI would validate a governance model that other AI startups are already copying.
What Musk is asking the jury to do
Musk’s legal team has asked jurors to find that Altman breached fiduciary obligations rooted in OpenAI’s founding nonprofit charter when he oversaw a restructuring that introduced equity-linked incentives for investors and employees. In closing arguments, Musk’s lawyers told the jury that early donors and co-founders were promised OpenAI would prioritize broad public benefit over financial return, and that the promise was gutted once the organization began courting hundreds of billions of dollars in outside investment.
The remedies Musk seeks are extraordinary. He wants Altman removed from the CEO role, the for-profit restructuring reversed, and the nonprofit’s original mission restored as the binding framework for OpenAI’s operations. If the jury agrees, the ruling would force OpenAI to untangle commitments tied to its Stargate infrastructure partnership and renegotiate or void agreements with investors who participated in the recapitalization.
OpenAI’s defense
OpenAI’s attorneys have argued that the governance changes were properly approved by the board and designed to let the company compete for the talent and computing power needed to build safe AI systems. They point to provisions that give the nonprofit parent authority to appoint and remove directors of the for-profit arm, impose caps on investor returns, and intervene if safety commitments are threatened.
Central to OpenAI’s case are regulatory clearances from two state attorneys general. California Attorney General Rob Bonta issued a formal statement announcing he would not oppose the recapitalization after OpenAI agreed to preserve nonprofit control and board authority over the new corporate structure. Delaware Attorney General Kathleen Jennings completed a separate review with independent advisors and issued a public notice of no objection in October 2025, noting that the nonprofit retains the power to appoint and remove board members.
OpenAI’s lawyers have treated those approvals as dispositive: if two state regulators examined the restructuring and concluded it preserved the nonprofit’s mission, Musk’s demand to unwind the deal lacks a legal foundation. They have also highlighted Musk’s competing financial interest as the founder of xAI, a rival artificial intelligence company, suggesting his lawsuit is driven at least in part by commercial rivalry rather than charitable concern.
The legal question at the heart of the case
The trial turns on an issue that neither side’s public filings fully resolve: whether a nonprofit’s founding charter creates enforceable obligations that survive a board-approved restructuring, or whether state attorney general review and consent effectively ratify the change and extinguish earlier claims.
Musk’s side contends that the original charter imposed stricter obligations than any negotiated framework can satisfy, and that AG concessions do not erase duties owed to founding contributors. OpenAI counters that the recapitalization was the only realistic path to funding frontier AI research at scale, and that the governance safeguards negotiated with regulators preserve the spirit of the mission even as the corporate form evolves.
The jury’s answer could set a precedent that reaches well beyond OpenAI. A ruling for Musk would signal that founding donors and contributors can challenge nonprofit-to-for-profit conversions even after state regulators have signed off. A ruling for OpenAI would affirm that governance concessions negotiated with state officials can satisfy fiduciary duties over the objections of original stakeholders.
What the public can and cannot see
Public access to the proceedings has been unusually broad. The Northern District of California has provided live audio of the trial, a step enabled by an amended Local Rule 77-3 that now allows remote listening to civil jury trials. Anyone with an internet connection can hear the proceedings in real time.
But several critical documents remain out of public view. Internal OpenAI board minutes and the memorandum of understanding referenced by both attorneys general appear to be sealed. Without those records, outside observers cannot independently assess how much authority the nonprofit actually retains or whether the concessions OpenAI made to regulators match the commitments described in public statements. Jury instructions and the verdict form, which will define the exact questions jurors must answer, also had not appeared on the court’s public docket as of late May 2026.
What a verdict would mean
If the jury sides with Musk, the immediate fallout would be enormous. OpenAI would face pressure to remove Altman, restructure its leadership, and potentially renegotiate or unwind investor agreements worth hundreds of billions of dollars. Microsoft, which has committed billions to OpenAI and integrated its technology across its product line, would need to reassess its partnership. Employees holding equity tied to the for-profit structure would face deep uncertainty about the value of their compensation.
If the jury sides with OpenAI, the company’s restructuring stands, and the ruling would give legal cover to other nonprofits considering similar conversions in the AI sector and beyond. Altman would remain CEO, and the Stargate infrastructure buildout would proceed without the legal cloud that has hung over it for months.
Either way, the verdict will clarify how much legal force founding charters and early mission statements carry once a nonprofit grows into a global technology powerhouse. Deliberations could begin as soon as Monday morning, and a decision could come within days.
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*This article was researched with the help of AI, with human editors creating the final content.
