Musk admitted: no written agreement existed with OpenAI at its founding

Elon Musk acknowledged in court that no written contract existed regarding the terms of his donations to OpenAI — neither at the time the company was founded more than a decade ago, nor later.

Founding Without Papers

OpenAI was created in 2015 as a non-profit research organization with support from several technology entrepreneurs. Musk was among the first co-founders and donors, investing significant sums to launch the project. According to him, the parties relied on verbal agreements: OpenAI was to serve humanity as a whole, remain non-profit, and not be subject to corporate shareholders' interests. Musk considered this understanding the foundation of the project — but it was never recorded on paper. In 2018, he left the board of directors, citing a conflict of interest with Tesla and SpaceX. And in doing so, no formal documents about the fate of the donations or the organization's mission were signed either.

Recognition Weakens the Lawsuit

In 2024, Musk filed a lawsuit against OpenAI, arguing that the company violated its obligations to donors by beginning a commercial restructuring. His arguments were built on the existence of some "original understanding" about the non-profit nature of the organization. Now the plaintiff himself acknowledges: no written conditions existed. This significantly complicates the legal position:

• Without a written agreement, it is difficult to prove the breach of specific conditions
• Courts reluctantly recognize oral agreements in corporate matters
• OpenAI is entitled to insist on the absence of legally binding restrictions
• The organization's non-profit status formally does not prohibit it from changing its structure

Context of the Conflict

OpenAI is actively moving toward transformation into a Public Benefit Corporation (PBC) — a form that allows attracting external investors while formally preserving the mission. In parallel, Musk is building xAI as a direct competitor and publicly criticizes OpenAI's transformation. The lawsuit is escalating: the parties have exchanged dozens of procedural documents. At the center of the dispute is the question of whether OpenAI's transformation violated the original intentions of the founders, even if not recorded on paper.

"No written agreement or contract regarding the conditions of the donation existed,"

Musk acknowledged during testimony.

OpenAI insists that it acted strictly within the scope of its charter and corporate documents, which contain no restrictions on subsequent commercialization.

What This Means

Without recorded conditions, there is formally nothing to breach — this seriously complicates Musk's position. The outcome of the case will depend on the interpretation of the founders' oral intentions and the corporate documents from 2015. The precedent is important for the entire industry: it will determine how legally obligated AI companies are to adhere to their original non-profit declarations.