Microsoft (MSFT) CEO Satya Nadella is set to testify in a California federal court on Monday, May 11, as the high-stakes lawsuit filed by Tesla (TSLA) CEO Elon Musk against ChatGPT creator OpenAI heads into a key phase. The testimony will center on claims that Microsoft knowingly backed OpenAI’s shift from a nonprofit to a for-profit business — the core claim driving Musk’s lawsuit.
Claim 55% Off TipRanks
Looking for exposure to SpaceX & Anthropic? Check out AGIX ETF
Emails Set to Expose Microsoft’s Role in OpenAI’s Shift
Musk’s legal team plans to rely on internal Microsoft emails from January 2018 to argue that the tech giant backed OpenAI only once profit seemed likely. In the disclosed emails, Nadella questioned the value of offering the AI firm cheaper access to Microsoft’s Azure cloud platform.
He added he could not tell what research OpenAI was doing or how it would help Microsoft compete. Nadella further noted what Musk was telling people at the time, that the AI firm was close to a major artificial general intelligence (AGI) breakthrough.
Shortly after, OpenAI launched a for-profit arm to attract outside funding. Microsoft then invested $1 billion in 2019 and went on to commit $13 billion in total. That stake is now valued at about $228 billion, representing a 27% share of the private company‘s for-profit unit.
Musk’s lawyers allege this timeline shows Microsoft knew it was helping pull OpenAI away from its nonprofit roots, which they plan to use to make Nadella’s questioning a key moment in the trial.
Microsoft’s Defense Already on the Table
Ahead of Nadella’s testimony, Microsoft has already laid out its defense in earlier court proceedings. Its lawyers argued the firm did not and could not have aided any alleged breach of a charitable trust.
They also said Musk had Nadella’s personal phone number but never raised concerns about the partnership for five years.
They further pointed to a 2020 post by Musk on X in which he described OpenAI as “essentially captured by Microsoft.” They said this showed he knew about the commercial ties long before filing the case in 2024.
Nadella’s testimony will likely be followed by OpenAI CEO Sam Altman taking the stand later this week. Meanwhile, an advisory jury is set to give its view on wrongdoing by the week of May 18. After that, the U.S. District Judge Yvonne Gonzalez Rogers will issue the final ruling on liability and remedies.
Is Microsoft a Buy or Sell?
TipRanks’ current forecast for Microsoft (MSFT) shows a Strong Buy rating from 35 Wall Street analysts. Of those, 33 recommend a Buy, 2 suggest a Hold, and 0 advise a Sell. Their projected 12-month average price target for MSFT is $559.98, implying a 34.90% upside from the current price. For more information on this stock’s ratings, performance metrics, and forecast, visit the TipRanks Stocks Comparison Center.
