Pretrial battle in OpenAI lawsuit centers on Elon Musk’s dual role as Microsoft partner and plaintiff – GeekWire
Microsoft’s move to collaborate with Elon Musk’s XAI at the same time the tech mogul is being sued has gone through the motions of being a potential court witness.
In a series of pretrial motions ahead of the highly anticipated trial, lawyers for Microsoft and OpenAI are scrambling to present xAI’s recent business deals — including the integration of its Grok 4 model into Microsoft’s Azure AI Foundry — as evidence in their defense.
Microsoft says the partnership proves its business model is simply a neutral host for competing AI models. OpenAI goes further, arguing that Musk’s dual role as partner and plaintiff reveals a financial motive that undermines its claim to due process.
Musk asked the judge to exclude the evidence as a “miniscule case” that was disturbing.
His claim is that OpenAI abandoned its founding mission as a non-profit organization dedicated to advancing AI for the benefit of humanity, and that Microsoft aided and abetted that betrayal.
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Microsoft has invested more than $13 billion in OpenAI and held a 27% equity stake in its new venture ahead of the ChatGPT maker’s latest funding round. That round includes an investment of up to $50 billion in OpenAI from Amazon, which is not involved in the dispute.
The trial will begin on April 27 in federal court in Oakland, Calif.
Microsoft is asking the judge to admit several exhibits on this topic, including a shareholder letter that refers to Azure AI Foundry’s list of AI partners, and Musk’s X social media post by Microsoft CEO Satya Nadella welcoming Grok 4 to Azure AI Foundry.
The partnership begins in May 2025, when Nadella announced the addition of Grok models to Azure AI Foundry at Microsoft’s Build developer conference. Musk appeared alongside Nadella in a video shown at the event, talking about topics including xAI’s commitment to AI safety, an issue that has become a key point of contention in the case.
Hosting multiple AI models from competing developers, Microsoft says, is “core to our Microsoft DNA” and helps explain why it partnered with OpenAI in the first place. That Musk is simultaneously suing Microsoft over that relationship while his company benefits from the same space, Microsoft says, goes directly to his credibility as a witness.
OpenAI advocates are taking an aggressive approach, seeking to present evidence of a major procurement effort. According to a court filing, Musk and a group of investors promised to buy all of OpenAI’s assets for $97.375 billion in a letter of intent by February 2025.
These are the same assets that he now claims were required by law to remain anonymous and confined within the nonprofit organization. A judge, OpenAI argues, must weigh that conflict.
OpenAI also wants to present evidence about xAI’s security record, saying Musk can’t put OpenAI’s security practices to the test while shielding his own company from the test. Musk has called AI safety central to the case and plans to testify about his commitment to the issue.
Musk relied on previous court orders to keep the xAI record out of court entirely. The judge previously divided the trial into two phases, reserving the competition claims for Phase Two. Musk says his xAI launch in 2023 and his recent commercial partnership with Microsoft are part of that second phase, not before the judge in April.
Musk’s own deposition, made public last week, adds another dimension to the security debate.
In it, he attacked OpenAI’s security record, saying “no one killed themselves because of Grok, but apparently they killed themselves because of ChatGPT.” That was a reference to lawsuits alleging ChatGPT’s chat tactics contributed to negative mental health outcomes.
Since that entry was recorded, xAI has faced security issues, including an incident in which Grok produced illegal nude images, prompting questions from the California Attorney General and regulators in Europe, according to TechCrunch.
Microsoft has stayed out of those problems, focusing instead on the small argument that its collaboration with xAI reflects the way it does business more broadly: it hosts competing AI models from dozens of developers in the same space it uses for OpenAI.
US District Judge Yvonne Gonzalez Rogers will hear arguments on the evidentiary dispute on March 13, to decide what the jury will see and hear when the trial begins.
