Musk Wanted OpenAI as Tesla Subsidiary, Girlfriend Testifies

Shivon Zilis, Elon Musk's current partner and former OpenAI board member, testified Wednesday in a California courtroom that Musk once expressed his desire for OpenAI to become a subsidiary of Tesla. The testimony, delivered during cross-examination in Oakland, adds explosive new detail to the escalating legal battle between the world's richest man and the company behind ChatGPT.

Zilis also faced pointed questions about whether she secretly funneled confidential board information to Musk during her tenure at the AI nonprofit — allegations that could reshape public understanding of the bitter feud between Musk and OpenAI CEO Sam Altman.

Key Takeaways From the Testimony

• Musk reportedly wanted OpenAI to operate as a Tesla subsidiary, merging the AI lab's research with his electric vehicle empire
• Zilis was accused of leaking board information to Musk while serving as an OpenAI director
• An OpenAI executive alleged Zilis failed to disclose that Musk was the father of her twin children during her board tenure
• Zilis defended herself by stating: 'I have always been committed to making AI benefit humanity'
• The testimony took place in Oakland, California, as part of the ongoing Musk vs. OpenAI legal proceedings
• The case centers on Musk's claim that OpenAI abandoned its nonprofit mission by partnering closely with Microsoft

Zilis Faces Accusations of Secret Information Sharing

The courtroom drama intensified when OpenAI's legal team pressed Zilis on her dual loyalties. As a board member of the AI research organization, she held fiduciary duties to act in OpenAI's best interest. Yet her personal relationship with Musk — one of OpenAI's co-founders and most prominent critics — raised serious questions about potential conflicts of interest.

OpenAI executives have alleged that Zilis did not properly disclose the nature of her relationship with Musk, particularly the fact that he fathered her twins. This omission, they argue, represents a fundamental breach of board governance norms. In most corporate settings, directors are expected to disclose any relationships that could create conflicts or the appearance of bias.

Zilis pushed back against these characterizations during her testimony. She emphasized her personal commitment to beneficial AI development, framing her involvement with OpenAI as mission-driven rather than strategically motivated. However, the revelation that Musk wanted OpenAI folded into Tesla suggests the billionaire had far more ambitious plans for the AI lab than previously known.

The Tesla Subsidiary Bombshell Changes the Narrative

Perhaps the most significant revelation from Wednesday's testimony was Musk's reported desire to make OpenAI a Tesla subsidiary. This detail fundamentally reframes the narrative around Musk's ongoing lawsuit against the organization.

Musk has publicly argued that OpenAI betrayed its founding mission as a nonprofit dedicated to developing artificial general intelligence for the benefit of humanity. He has positioned himself as a champion of open-source AI and a critic of OpenAI's increasingly commercial direction, particularly its $13 billion partnership with Microsoft.

But the subsidiary revelation suggests Musk's frustrations may stem less from ideological disagreements and more from a failed power play. If Musk sought to bring OpenAI under Tesla's corporate umbrella, his current legal challenge takes on a different character — one motivated by commercial ambition rather than altruistic concern.

This distinction matters enormously for the case. OpenAI's legal team can now argue that Musk's real grievance is not that the organization became too commercial, but that it became commercial without him at the helm. The irony of a billionaire suing a company for pursuing profits — while simultaneously wanting to absorb it into his own for-profit empire — is unlikely to be lost on the judge.

How This Fits Into the Broader Musk vs. OpenAI Battle

The Musk-OpenAI conflict has become one of the most closely watched legal battles in the technology industry. Understanding the full context requires looking at several interconnected threads:

• 2015-2018: Musk co-founded OpenAI as a nonprofit and contributed approximately $50 million before departing the board
• 2019-2023: OpenAI created a 'capped profit' subsidiary, partnered with Microsoft, and launched ChatGPT, becoming one of the most valuable startups in the world
• 2024: Musk filed his initial lawsuit alleging breach of the founding agreement, later withdrawing and refiling with expanded claims
• 2025: The case has progressed to trial, with witnesses including Zilis, former OpenAI employees, and potentially Altman himself

The legal proceedings come at a critical moment for OpenAI, which is reportedly in discussions to convert fully to a for-profit structure — a move that would represent the final abandonment of the nonprofit model Musk helped establish. The company's valuation has soared past $150 billion following the success of its GPT-4 and GPT-4o models, making it one of the most valuable private companies in the world.

Meanwhile, Musk has launched his own AI venture, xAI, which developed the Grok chatbot integrated into his social media platform X (formerly Twitter). xAI raised $6 billion in funding in late 2024, positioning it as a direct competitor to OpenAI. This competitive dynamic adds another layer of complexity to Musk's legal claims.

Governance Questions Extend Beyond This Case

The Zilis testimony highlights broader governance challenges facing AI organizations. The tight-knit nature of Silicon Valley means that board members, executives, and investors frequently share personal and professional relationships that can create conflicts.

OpenAI itself has faced governance crises before. The dramatic firing and rehiring of Sam Altman in November 2023 exposed deep fractures within the organization's board. That episode raised fundamental questions about whether a nonprofit governance structure could effectively oversee a company generating billions in revenue.

The Zilis situation presents a different but related problem. When board members maintain undisclosed personal relationships with parties who have financial or strategic interests in the organization, the integrity of board decisions becomes questionable. Key questions that emerge include:

• Did Zilis share confidential strategic information with Musk that influenced his business decisions?
• Were any board votes or discussions influenced by her relationship with Musk?
• Should OpenAI's governance processes have detected and addressed the conflict earlier?
• What precedent does this set for AI companies navigating similar governance challenges?

These questions extend far beyond the Musk-OpenAI dispute. As AI companies handle increasingly sensitive intellectual property and make decisions worth billions of dollars, robust governance becomes essential.

What This Means for the AI Industry

The trial's outcome could have far-reaching implications for the structure and governance of AI organizations. If Musk prevails, it could establish legal precedent affecting how AI nonprofits transition to commercial entities. If OpenAI wins, it would validate the 'capped profit' model that has attracted enormous investment.

For developers and businesses building on OpenAI's platform, the legal uncertainty creates risk. Any court-ordered restructuring of OpenAI could affect API pricing, model availability, and partnership terms. Companies deeply integrated with OpenAI's ecosystem — from startups using GPT-4 for customer service to enterprises deploying custom models — should monitor the proceedings closely.

The testimony also sends a signal to other AI organizations about the importance of transparent governance. Companies like Anthropic, Google DeepMind, and Meta AI all navigate complex relationships between founders, investors, and board members. The OpenAI case serves as a cautionary tale about what happens when these relationships are not properly managed and disclosed.

For the broader public, the trial offers a rare window into the power dynamics shaping the future of artificial intelligence. The decisions made by a handful of billionaires and executives in Silicon Valley will determine how AI develops, who controls it, and who benefits from it.

Looking Ahead: What Comes Next in the Trial

The trial is expected to continue for several more weeks, with additional witnesses likely to include current and former OpenAI executives. Sam Altman himself may take the stand, which would create one of the most anticipated courtroom moments in recent tech history.

Several critical questions remain unanswered. The court will need to determine whether OpenAI's founding documents create enforceable obligations that prevent its commercial transformation. It will also need to assess whether Musk has standing to bring these claims, given that he voluntarily departed the board in 2018.

The Zilis testimony has already shifted the narrative in important ways. By revealing Musk's desire to make OpenAI a Tesla subsidiary, it complicates his portrayal as a disinterested advocate for open AI development. OpenAI's legal team will almost certainly use this revelation to argue that Musk's motivations are commercial rather than charitable.

Regardless of the verdict, this trial is already reshaping how the public and the industry think about AI governance, corporate structure, and the enormous personal stakes involved in controlling the most transformative technology of the 21st century. The coming weeks of testimony promise even more revelations about the private negotiations, personal conflicts, and strategic maneuvering that have defined the AI industry's most consequential relationship.