Microsoft CEO Satya Nadella spent hours on the witness stand in the high-profile Elon Musk vs Sam Altman trial, defending Microsoft's multibillion-dollar partnership with OpenAI and pushing back against claims from Elon Musk that the company helped undermine OpenAI's original nonprofit mission. Testifying in federal court in Oakland, California, Nadella said Musk never personally raised concerns with him about Microsoft's investments in OpenAI or suggested the partnership violated the organisation's founding principles.
"Musk never contacted me with those concerns," Nadella told the court, according to CNBC. The testimony marks a significant moment in the legal battle between Musk and OpenAI CEO Sam Altman, which has increasingly turned into a broader argument over who should control the future of artificial intelligence and whether OpenAI abandoned its original charitable structure in pursuit of commercial growth.
Musk, who co-founded OpenAI in 2015 before leaving the organisation in 2018, has accused OpenAI, Altman, and Microsoft of turning a nonprofit AI lab into a profit-driven business benefiting a small group of executives and investors.
Satya Nadella defends OpenAI partnership
Nadella, however, portrayed Microsoft's relationship with OpenAI as transparent and commercially motivated from the beginning. He testified that Microsoft never viewed its investments as charitable donations and always expected strategic benefits in return. Microsoft has invested more than $13 billion into OpenAI across several funding rounds since 2019, including an initial $1 billion investment, followed by additional multi-billion-dollar commitments as OpenAI's technology became central to the AI boom.
Nadella said Microsoft took an early risk backing OpenAI when few others were willing to do so. "We were very proud that we took the risk," he said, describing OpenAI at the time as a fledgling research lab with uncertain commercial prospects.
Altman vs OpenAI board 'chaos'
One of the most striking moments of Nadella's testimony involved the dramatic November 2023 firing and reinstatement of Altman. Nadella described himself as "pretty surprised" when OpenAI's board abruptly removed Altman as CEO, saying the explanation provided by the board lacked detail and clarity.
The board had publicly stated that Altman was "not consistently candid" in his communications, but Nadella said that explanation was insufficient given Microsoft's deep partnership with the company. "This is the CEO of a company that we are invested in and deeply partnered with," Nadella testified. "I felt that they could have explained to me what are the incidents or what is the detail behind it." He went even further, characterising the board's handling of the situation as "amateur city."
Nadella also suggested that internal jealousy and poor communication may have contributed to Altman's temporary removal, though he clarified that he never explicitly demanded Altman's reinstatement.
The testimony also offered rare insight into Microsoft's competitive thinking around AI. During questioning, Nadella acknowledged sending an internal email in 2022 warning executives: "I don't want to be IBM and OpenAI to be Microsoft." The comment referenced IBM's historic decision to license Microsoft's DOS operating system in the early PC era — a deal that ultimately helped Microsoft eclipse IBM in influence and market power.
Nadella also revealed Microsoft's concerns about Google's influence in AI governance. He testified that he opposed former Google executive Diane Greene potentially joining OpenAI's board because of possible conflicts tied to Microsoft's rivalry with Google.
Nadella's testimony made one thing clear: Microsoft sees OpenAI not as a charitable experiment, but as one of the most strategically important business partnerships in the company's history.
