Okay, I’m not a lawyer so I only understand half of what happened. But given the context, I’m pretty sure Elon Musk’s lawyers must have made a big mistake.
Jared “James Brickhouse” Birchall, Musk’s finance guy and all-around fixer, took the stand after Musk today. Much of his testimony was mundane and seemed to exist primarily to read some documents into the record, which sucks but is a normal part of sitting through trials. but at Very Something interesting happened at the end of his boring testimony. I believe we all got a surprise, something that rarely happens in courts.
Another member of the team passed a note to the lawyer conducting his direct investigation, and asked Birchall what the note apparently contained: was he familiar with the XAI bid for OpenAI’s assets?
“Sam Altman was on both sides of the table.”
“As I recall, the attorney we were working with asked the California Attorney General to make sure that in their fiduciary duty, the assets of OpenAI’s nonprofits were being fairly valued,” Birchall said. In his understanding, “There was a conversation between Sam Altman and those on both sides of the table, for-profit and non-profit, to try to discount the value of the non-profit’s assets. And we made that bid in an effort to get a fair accounting of the value of the foundation, and create a market bid that would need to be considered by the Attorney General.”
Here are some of the stories: In February 2025, a Musk-led coalition made a $97.4 billion bid for the non-profit organization that controls OpenAI. The bid was submitted by Mark Toberoff, one of Musk’s lawyers in the current case. The bid came 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 reorganized itself. (I’m not really sure why this would be a problem for Musk and XAI, to be honest, but whatever.)
Defense counsel objected and Birchall’s statement was rejected for lack of foundation. So we did this piece by piece to establish the foundation, at the end of which Birchall said again, “Sam Altman was on both sides of the table.”
On cross-examination, Wachtel Lipton’s Bradley Wilson – OpenAI’s counsel – retracted the thread. Wilson asked how much Birchall had learned from sources other than lawyers. Birchall said he would have difficulty solving it. After some further exchanges, Wilson dismissed 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 confident. Today you are not very confident.”
The jury had to leave early while the lawyers filed it out, and this is where it got weird. Judge Yvonne Gonzalez Rogers began asking Birchall questions herself and this was clearly upsetting Birchall. Birchall said he did not recall discussing the XAI bid with Musk or Shivon Zilis or any other head of the Musk organization. It certainly seemed like Musk’s lawyers didn’t give OpenAI proper discovery on the subject in the statement, and so we were given a quick and dirty statement. with the judge right then. At one point, Gonzalez Rogers told the plaintiff’s attorney to stop coaching the witness.
Birchall said he had talked to other members of the consortium about the bid, but he was not involved in discussions with Musk about when to send the bid letter. He claimed that he had heard some things from Toberoff, but was not aware that Toberoff represented some of the other bidders. He did not know whether xAI knew that Toberoff represented some of the other bidders.
He claimed that Birchall did not know whether other investors had direct information about OpenAI. As far as he knew, no one had documentation of the inside of OpenAI. Gonzalez Rogers remained unconvinced. “I’m still struggling with how you negotiate with these individuals to raise $97.5 billion, but even in general I don’t remember anything,” she said. Birchall said he had common sense – he called everyone involved to see if they were interested in joining Musk in the bid.
“Why would they do that?” Gonzales Rogers asked. Birchall said these were people with whom Musk and others had long-standing relationships. “You must have been very confident,” she said. “You’re not very confident today.”
Birchall said that when he called potential investors there were no numbers other than Topline, and after talking to them, they were passed on to lawyers. He did not remember who had chosen the $97.4 billion number, and while he said he got it from the legal team, he told Gonzalez Rogers that he did not get it from Musk. Gonzalez Rogers asked whether that analysis was made by anyone other than Toberoff. Birchall said not that he could recall.
“Did any lawyer tell you this was part of the litigation?” Gonzalez Rogers asked.
No, Birchall said. It was purely a business deal.
Apparently Steven Molloy, who was defending Musk during the testimony, raised several objections to questions about the deal, citing privileged communications. Apparently business deals are not privileged. But all search in the XAI bid for OpenAI was blocked before testing could begin. Unfortunately, by asking Birchall about the XAI deal at the end of the direct examination, Musk’s team may have opened the door to digging deeper into it. You may be wondering, “Open the door for who?” and your guess is as good as mine. Looking for more? Maybe something about Musk’s anti-competitive behavior? It doesn’t look like it’ll be good for Musk, that’s all I can tell you.
Gonzalez Rogers then asked who had passed the note, and all the lawyers sat there like guilty children. Ultimately, the person responsible said he passed it on, but he did not write it; A junior lawyer did it. who wrote it? More silence. Eventually Toberoff – hardly a junior lawyer – stood up and took responsibility. Why did he do this? “I thought it was fair.”
“It looks like you wanted to open the door,” Gonzalez Rogers said. We adjourned while she said she would consider what to do with this testimony. She will probably rule on it tomorrow.
Improvement, 30 April: This is Shivon Zilis, not Sharon Zilis.
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