Nadella's Testimony Puts Microsoft's OpenAI Ties at Center of Musk Trial

• By John K. Waters
• 05/11/2026

Microsoft Chief Executive Satya Nadella took the stand on Monday in Elon Musk’s civil trial against OpenAI, giving jurors a close look at the partnership that helped turn the AI lab Musk once backed into one of the most powerful companies in technology.

The testimony opened what appears to be a critical late phase in the federal court fight between Musk, OpenAI, Chief Executive Sam Altman, and other defendants. The case centers on Musk’s claim that OpenAI abandoned its founding nonprofit mission as it expanded into a commercially driven AI company with deep ties to Microsoft. OpenAI denies the claims and argues that Musk is using the case to damage a rival while building his own AI company, xAI.

Nadella was questioned about Microsoft’s relationship with OpenAI, its financial backing of the company, and the 2023 leadership crisis in which Altman was briefly removed before being reinstated. According to The Wall Street Journal, Nadella testified that Microsoft’s agreement gave it rights to OpenAI's intellectual property, not control over the company.

The distinction matters because Musk’s side has sought to portray Microsoft’s investment and commercial partnership as evidence that OpenAI drifted away from the charitable purpose that helped define its founding. Microsoft has invested heavily in OpenAI, and the partnership has made OpenAI’s models central to Microsoft products while giving the software giant a leading position in the generative AI race.

Nadella also testified about the turmoil surrounding Altman’s firing and reinstatement in 2023. The Wall Street Journal reported that Nadella said he was concerned at the time that Altman or members of his team might join a rival such as Google or start a competing company.

The trial has repeatedly returned to the same question: whether OpenAI’s structure evolved to support the development of advanced AI or violated the nonprofit commitments that attracted early backers, including Musk. AP reported that U.S. District Judge Yvonne Gonzalez Rogers has warned lawyers not to turn the proceedings into a broad trial over the dangers of artificial intelligence, even as testimony has touched on those risks.

Musk, who co-founded and helped fund OpenAI, has accused Altman, OpenAI President Greg Brockman, OpenAI, and Microsoft of misleading him as the organization moved from a nonprofit research lab toward a more profit-oriented structure. OpenAI has denied the allegations and said Musk had previously considered or supported for-profit options as the company sought the money and computing power needed to compete.

The courtroom has already heard from Musk, Brockman, former OpenAI board member Shivon Zilis, and other witnesses. Zilis, a former OpenAI board member and longtime Musk associate, testified last week and denied allegations that she secretly funneled information to Musk while serving on OpenAI’s board.

Brockman’s testimony focused in part on OpenAI’s mission, the company’s structure, and Musk’s role in its early evolution. AP reported that Brockman testified that OpenAI’s work was larger than any individual or corporate structure, while OpenAI has argued that Musk sought greater control over the company before leaving.

The trial began in Oakland federal court after a nine-person jury was selected on April 27. Theproceeding is scheduled to continue through late May, with closing arguments expected to begin Thursday, May 14.

Several major questions remain unresolved as the case moves toward its conclusion. The expected testimony from former OpenAI chief scientist Ilya Sutskever, Nadella, and Altman could shape the jury’s view of OpenAI’s internal governance, the 2023 Altman ouster, and whether the company’s evolution amounted to a betrayal of its founding commitments.

Because the case is civil, the jury will not decide guilt or innocence. Jurors will decide liability and compensation, while Gonzalez Rogers will determine any remedies if Musk prevails. Remedies sought by Musk have included changes to OpenAI’s structure and leadership, although it remains unclear what the court would order if he were to win.

For the AI industry, the trial has become more than a fight among Silicon Valley founders. It is testing how courts, investors, and juries understand the uneasy bargain behind frontier AI: nonprofit language, commercial capital, corporate partnerships, and the enormous costs of building systems that their creators say could reshape the global economy.