In a federal courtroom in Oakland, California, on May 11, Microsoft CEO Satya Nadella took the stand. His words landed like a series of precise strikes. They appeared to weaken key elements of Elon Musk’s long-running lawsuit against OpenAI, Sam Altman and, notably, Microsoft itself.
The trial, now in its third week, centers on claims that Altman and OpenAI co-founder Greg Brockman misled Musk. They allegedly turned a nonprofit dedicated to safe artificial intelligence research into a commercial powerhouse. Musk, who contributed about $38 million in OpenAI’s early days before departing in 2018, accuses the pair of breaching a charitable trust. He further alleges Microsoft aided that shift through investments now exceeding $13 billion.
But Nadella, called as a witness by Musk’s legal team, offered testimony that painted a different picture. One of early collaboration. Of no objections raised in real time. Of a partnership rooted in commerce from the start. Direct. Unflinching.
“We have each other’s phone numbers,” Nadella told jurors, according to CNBC. He said Musk never contacted him with concerns about Microsoft’s growing financial commitments to OpenAI. Not in 2019 when the initial $1 billion deal was struck. Not when that relationship expanded with a revenue-sharing agreement. And not even after the additional $10 billion commitment announced in 2023.
This absence of complaint stands in contrast to Musk’s court arguments. Musk has portrayed Microsoft’s deepening ties as the decisive factor that corrupted OpenAI’s original mission. Yet Nadella described the investments as commercial bets, not charitable gifts. He expressed pride that Microsoft stepped up when others hesitated. “No one else was willing to bet on the fledgling lab,” he said.
And Musk himself once welcomed that support. An August 2017 email shown to the jury captured Musk thanking Nadella after OpenAI’s AI system triumphed in a Dota 2 world championship match. Microsoft had provided discounted access to its Azure cloud infrastructure, taking a roughly $15 million loss in the process to fuel the young organization’s work. “Very much appreciated,” Musk wrote. “Will make sure that people know about Microsoft’s help.”
That gratitude, offered while Musk still sat on OpenAI’s board, complicates his current narrative. The partnership evolved. It delivered real revenue. A Microsoft executive’s video deposition played in court noted the company has recognized about $9.5 billion from the arrangement so far.
But the testimony didn’t stop at financial details. Nadella addressed the chaotic events of November 2023, when OpenAI’s board abruptly ousted Altman as CEO. Musk’s lawyers have highlighted that episode as evidence of instability and untrustworthiness at the company’s highest levels. Nadella saw it differently.
He called the board’s handling “amateur city.” The phrase drew attention in the courtroom. Nadella said he received no clear explanation for the move despite pressing for details. The board’s public statement cited Altman as “not consistently candid.” That language fell short for the Microsoft chief. “They never gave me, that I remember, a specific reason,” he testified. He suspected jealousies and communication breakdowns played a larger role.
Nadella worried about the fallout. He feared OpenAI employees might depart en masse. Such an exodus would harm both organizations. So he focused on stability. He offered Altman and Brockman roles at Microsoft if needed. He discussed potential new board members in texts with Microsoft’s chief technology officer Kevin Scott and even with Altman. Names like Sue Desmond-Hellmann, who later joined the board, came up. Nadella opposed others, including former Google Cloud CEO Diane Greene, due to competitive conflicts.
His famous remark from that period also resurfaced. In an interview with New York magazine, Nadella had declared that if OpenAI “disappeared tomorrow,” Microsoft held the intellectual property rights and capabilities to continue. “We are below them, above them, around them,” he said then. On the stand, he framed those words as reassurance to customers. Products like Copilot would persist uninterrupted. The statement had nothing to do with exerting control over OpenAI, he insisted. It concerned continuity.
Internal Microsoft communications revealed additional caution. In an April 2022 email, Nadella voiced concern about the balance of power in the relationship. He did not want Microsoft to become “the next IBM” while OpenAI assumed the role of the dominant innovator, echoing how IBM once partnered with a young Microsoft on personal computers only to see the software giant eclipse it. The $10 billion investment represented a “one-way door,” Nadella explained. Microsoft could not afford to build duplicate supercomputing capacity. It accepted heavy dependence on OpenAI for core intellectual property development.
A January 2023 memo from Microsoft President Brad Smith projected a potential $92 billion return on the cumulative investment, with accelerating gains expected from 2025 onward. Nadella acknowledged the risk. The return could have been zero. Still, the partnership had generated substantial value. He noted under cross-examination that he was unaware of any full-time employees at the OpenAI nonprofit entity before March 2026 or of significant grants or open-sourced research it had produced in recent years.
These revelations add texture to a trial already rich with Silicon Valley drama. Musk testified earlier. So did other figures. After Nadella stepped down, Musk’s side called OpenAI co-founder Ilya Sutskever, who departed following the 2023 power struggle. Sutskever’s appearance wrapped the plaintiff’s case. OpenAI then began presenting its defense, starting with board chairman Bret Taylor, who stressed the company’s ongoing commitment to humanity’s benefit.
Sam Altman is expected to testify soon. His turn on the stand could prove among the most anticipated moments. Closing arguments may arrive as soon as Thursday. The nine-person jury will ultimately decide whether deception occurred. Whether a charitable mission was betrayed. And whether Microsoft’s role crossed any legal lines.
Nadella’s hours on the witness stand delivered no knockout blow. Yet they chipped away at Musk’s portrayal. They suggested a founder who participated in the early Microsoft collaboration. Who raised no alarms as stakes and dollars climbed. Who watched the for-profit transition unfold without direct protest to the partner at the center of it.
The broader stakes extend past this one dispute. The case has exposed raw tensions in artificial intelligence’s development. Questions of governance. Of profit versus public good. Of how much influence big tech should wield over frontier research labs. Microsoft’s massive bet has powered OpenAI’s rapid advances. It has also invited scrutiny over whether such alliances can preserve founding ideals.
Observers following the proceedings note the testimony’s potential impact. Business Insider outlined four specific ways Nadella’s statements appeared to undermine Musk’s arguments, from the 2017 thank-you email to the lack of complaints despite easy access. The Wall Street Journal highlighted Nadella’s focus on intellectual property rights rather than operational control. “It had nothing to do with control,” he said. “It had to do with just the strategic partnership which gave us the rights to the I.P.”
GeekWire reported on the IBM parallel and the one-way door nature of the investment decision. These accounts, published within hours of the testimony, captured fresh details that prior coverage had missed. They show how the trial continues to yield new insights even as it nears its end.
Whatever the jury decides, the proceedings have already illuminated the messy realities behind artificial intelligence’s ascent. Personalities clash. Billions flow. Missions evolve under pressure. Nadella’s measured responses reminded everyone that partnerships of this scale involve calculated risks on all sides. Musk built rockets and cars by embracing them. Now he tests whether courts will view OpenAI’s transformation through the same lens.
The final witnesses will speak. Arguments will conclude. A verdict will follow. For an industry racing toward ever more powerful systems, this courtroom battle offers a rare pause. It forces examination of how the technology’s biggest players struck their earliest deals. And whether those agreements hold up under later regret.
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