Okay, I am not a lawyer so I only understood about half of what just happened. But I am fairly sure, given the context, that Elon Musk’s lawyers may have just fucked up big.
Jared “James Brickhouse” Birchall, Musk’s finance guy and all-around fixer, took the stand after Musk today. Most of his testimony was dull and seemed to exist primarily to get some documents read into the record, which sucks but is a normal part of sitting through trials. But at the very end of his boring testimony something interesting happened. I believe we all got a surprise, something that rarely happens in courtrooms.
The lawyer conducting his direct examination was passed a note by another member of the team, and asked Birchall what was apparently contained on the note: was he familiar with the xAI bid for OpenAI’s assets?
“Sam Altman was on both sides of the table.”
“As I recall, a lawyer we were working with had asked the attorney general of California to ensure that in their fiduciary duty, proper value was being given to the assets of the nonprofit of OpenAI,” Birchall said. In his understanding, there was a negotiation “between Sam Altman and himself on both sides of the table, the for-profit and the non-profit, attempting to discount the value of the non-profit assets. And we made that bid in an attempt to properly account for the value the foundation had, and create a market bid that would need to be considered by the attorney general.”
Here’s some lore: in February 2025, a Musk-led coalition made a $97.4 billion bid for the non-profit that controls OpenAI. The bid was submitted by Marc Toberoff, one of Musk’s lawyers in the current case. This bid happened as OpenAI was restructuring itself so that the for-profit arm could be cleared to go public. In Birchall’s testimony, that bid was made because Musk, Birchall, and others, thought Altman might undervalue the nonprofit as the company restructured itself. (I’m not really sure why that would be a problem for Musk and xAI, frankly, but whatever.)
The defense counsel objected, and Birchall’s rant was struck for lack of foundation. So we did this piece by piece to establish the foundation, ending with Birchall saying, again, “Sam Altman was on both sides of the table.”
On cross-examination, Bradley Wilson from Wachtell Lipton — OpenAI’s lawyers — picked the thread back up. Wilson asked how much of this Birchall had learned from sources other than lawyers. Birchall said he’d have a hard time being able to untangle that. After a few more exchanges, Wilson moved to strike all of Birchall’s testimony about the xAI bid on grounds that would not be discussed in front of the jury.
“You must have been very convincing. You’re not very convincing today.”
The jury got to leave early while the lawyers duked it out, and this is where it got weird. Judge Yvonne Gonzalez Rogers started asking Birchall questions herself, and it clearly was making Birchall nervous. Birchall said he doesn’t remember discussing the xAI bid with Musk or Sharon Zilis or any other principal of the Musk organization. It sure sounded like Musk’s lawyers hadn’t given OpenAI proper discovery on this topic in the depositions, and so we were doing a fast and dirty deposition with the judge right then. At one point, Gonzalez Rogers told the plaintiff’s counsel to quit coaching the witness.
Birchall said he’d spoken to the other members of the consortium about the bid, but that he wasn’t involved in discussions with Musk about when to send the bid letter. He claimed he’d heard some things from Toberoff, but that he wasn’t aware that Toberoff represented some of the other bidders. He didn’t know if xAI was aware that Toberoff represented some of the other bidders, either.
Birchall didn’t know whether other investors had first-hand information about OpenAI, he claimed. No one had documents from inside OpenAI as far as he knew. Gonzalez Rogers remained unconvinced. “I’m still struggling with how you can have conversations with these individuals to raise $97.5 billion but have no recollections even in a general sense,” she said. Birchall said he had a general sense — he called each of the people involved to see if they were interested in joining Musk on the bid.
“Why would they do that?” Gonzales Rogers asked. Birchall said these were people with whom Musk et al had longstanding relationships. “You must have been very convincing,” she said. “You’re not very convincing today.”
Birchall said there were no numbers besides the topline one floated when he called prospective investors, and that after speaking with him, they were passed off to lawyers. He didn’t remember who chose the $97.4 billion number, and said he got it from the legal team, telling Gonzalez Rogers he didn’t get it from Musk. Gonzalez Rogers asked if that analysis was created by anyone besides Toberoff. Birchall said not that he could recall.
“Did a lawyer tell you this was part of litigation?” Gonzalez Rogers asked.
No, Birchall said. It was strictly a business deal.
Apparently Steven Molo, who’d been defending Musk during the deposition, had made multiple objections to questions about the deal, citing privileged communications. Business deals, apparently, aren’t privileged. But all discovery into the xAI bid for OpenAI had been blocked before the trial began. Unfortunately, by asking Birchall about the xAI deal at the very end of the direct examination, Musk’s team may have opened the door for more digging into it. You may be wondering, “open the door to what” and your guess is as good as mine. More discovery? Maybe something about anticompetitive behavior from Musk? It doesn’t sound like it’s going to be good for Musk, I can tell you that much.
Gonzalez Rogers then asked who’d passed the note, and all the lawyers just sat there like guilty children. Finally, the guy responsible said he’d passed it, but he didn’t write it; a junior lawyer did. Who wrote it? More silence. Finally Toberoff — hardly a junior lawyer — stood up and took responsibility. Why had he done it? “I thought it was appropriate.”
“Sounds like you wanted to open the door, then,” Gonzalez Rogers said. We adjourned while she said she’d consider what to do with this testimony. She will probably rule on it tomorrow.
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