Musk and Altman Take Their Battle From Court to Wall Street Ahead of Landmark IPOs
Some breakups end with blocked numbers and passive-aggressive Instagram posts. This one ended with a $150 billion lawsuit, three weeks of courtroom testimony, six billionaires on the stand, and a jury that needed less than two hours to say, essentially, "You waited too long."
The breakup, of course, is between Elon Musk and Sam Altman, two men who co-founded OpenAI in 2015 as a nonprofit with a grand promise to build artificial intelligence "for the benefit of humanity," and who have since become the most high-profile frenemies in Silicon Valley history.
Now, with the courtroom chapter abruptly closed, the fight moves to a much bigger arena: Wall Street. Both men are racing to take their companies public in what are expected to be the largest initial public offerings in history, and only one can go first.
Think of it like two rival chefs who used to run a restaurant together, had a messy falling out, and are now opening competing flagship locations on the same street within months of each other. Except the restaurants are worth, collectively, nearly $3 trillion.
This is the story of how a jury verdict in Oakland, California just reshaped the financial landscape of artificial intelligence, and what it means for the rest of us watching from the sidelines.
The Verdict That Changed Everything
On May 18, 2026, a nine-member federal jury in Oakland delivered a verdict so swift it left observers stunned. After an 11-day trial packed with private emails, billionaire testimony, and even street protesters, the jury took less than two hours to dismiss every single claim Elon Musk had brought against OpenAI, Sam Altman, and President Greg Brockman.
The jury didn't rule on whether OpenAI actually betrayed its nonprofit mission. They didn't need to. They simply found that Musk had known about the company's shift toward commercialization since at least 2021, and filing suit in 2024 meant he missed the three-year legal deadline.
"The jury decided this on a technicality," Musk posted on X shortly after, vowing to appeal to the Ninth Circuit. But legal experts quickly poured cold water on that idea. Judge Yvonne Gonzalez Rogers, who adopted the jury's finding as her own within minutes, noted that appeals based on factual questions (like whether a filing deadline had passed) face an "uphill battle."
For Altman and OpenAI, the emotional release was immediate. Lawyers representing OpenAI and Microsoft exchanged hugs in the hallway outside the courtroom.
Why the Case Collapsed on a Technicality
Here's what a "statute of limitations" dismissal actually means, in plain English: the court never answered the question everyone showed up for.
Musk had accused Altman and OpenAI of "stealing a charity", taking his $38 million in donations, promising to keep AI research open and nonprofit, then pivoting to a for-profit model and locking in billions from Microsoft.
It was a dramatic claim. But the trial revealed something awkward for Musk's side: evidence of OpenAI's commercialization was discussed as early as 2017, and Musk, who was on the board at the time, participated in those conversations.
Think of it like seeing a crack in your windshield, driving the car for three more years, then demanding the manufacturer replace it. At some point, the law says you had your chance.
The result? OpenAI's IPO path was instantly cleared of what one analyst called a "$134 billion overhang."
OpenAI's Path to a $1 Trillion IPO
With the legal storm behind it, OpenAI is now sprinting toward what could be the largest technology IPO in history. The company is targeting a fourth-quarter 2026 listing with an eye-popping valuation goal of up to $1 trillion, aiming to raise roughly $60 billion from public investors.
That would surpass every previous tech IPO by a wide margin. To put it in perspective: Alibaba's 2014 debut at $169 billion was considered audacious at the time. OpenAI is targeting nearly 6x that.
The groundwork is extensive. In March, OpenAI closed a $122 billion private funding round at a post-money valuation of $852 billion, with SoftBank, Amazon, and Nvidia among the anchor investors, the largest single fundraising round in Silicon Valley history.
The Numbers Behind the Ambition
OpenAI's growth story is genuinely staggering, and genuinely complicated.
The company now generates roughly $2 billion per month in revenue and has more than 900 million weekly active ChatGPT users, a scale that would make most SaaS executives weep with envy.
But there's a catch, and it's a big one.
OpenAI is burning cash at an almost unfathomable rate. HSBC projects cumulative losses of $115 billion through 2029, with the company not reaching profitability until 2030. The company has committed to over $1.15 trillion in long-term infrastructure spending.
Translation: OpenAI is a rocket ship powered by money that it hasn't earned yet. Investors who buy into the IPO at $1 trillion are essentially betting that AI demand 5-10 years from now will justify a price that looks extreme by any metric available today.
Governance Risks That Won't Disappear
The trial may be over, but the testimony left scars.
During the three-week proceeding, multiple witnesses, including former board members, described Altman as untrustworthy, with one reportedly characterizing a "toxic culture of lying."
These are not small details for potential public investors. When a company's CEO has his credibility questioned under oath by former colleagues, underwriters and institutional buyers take notice. Governance risk is becoming a core part of how AI companies are valued, and OpenAI's governance story just got messier, not cleaner.
CFO Sarah Friar has reportedly told colleagues the company is "not ready" for a public listing, warning that revenue growth won't support current spending plans. Over 600 employees cashed out $6.6 billion in secondary-market shares ahead of the IPO, a move some market watchers interpret as a bearish signal.
Musk's $1.75 Trillion Answer: SpaceX-xAI
If you're Elon Musk and you just lost a high-profile lawsuit against your former protégé, what's your next move?
You take your own company public first, and make it bigger.
SpaceX, which absorbed Musk's AI venture xAI in February 2026, is targeting a Nasdaq listing as early as June 12 under the ticker SPCX, aiming to raise as much as $75 billion at a jaw-dropping valuation of $1.75 trillion , which would make it the largest IPO in history, eclipsing Saudi Aramco's 2019 record.
The timeline is aggressive: a public prospectus filing is expected as early as this week, an investor roadshow beginning June 4, pricing around June 11, and the first trading day on June 12.
What Investors Are Actually Buying
Here's what makes the SpaceX-xAI entity so different from OpenAI: it has a cash cow.
SpaceX isn't just rockets and Mars ambitions. Its Starlink satellite internet business generated approximately $11.4 billion in revenue in 2025 with operating margins around 63%, serving more than 10 million subscribers across 160 countries. It is, comfortably, the largest and only consistently profitable division in the entire enterprise.
Meanwhile, xAI generated only $250 million in revenue over its last six reported months, and lost $2.5 billion in the process. The Grok AI chatbot is still finding its footing. The real xAI value proposition for investors is forward-looking: Musk's vision of orbital data centers powered by solar energy, with AI compute running on infrastructure that Earth-bound competitors can't match.
Think of SpaceX-xAI as a profitable logistics company that just bolted an ambitious-but-money-losing AI startup onto its balance sheet. The logistics arm pays the bills. The AI arm sells the dream.
Some analysts are skeptical. At $1.75 trillion, the price-to-sales multiple exceeds 100x, meaning investors would be paying over $100 for every $1 of revenue. Scottish Mortgage, one of SpaceX's most transparent public shareholders, values the company at about $1.25 trillion, a 40% discount to the IPO target.
The $3 Trillion Question: Can Markets Absorb It All?
Here's where the story gets bigger than Musk or Altman individually.
Three mega-IPOs are converging in 2026: SpaceX-xAI in June, Anthropic potentially in October, and OpenAI in Q4. Combined, these companies are targeting valuations approaching $3 trillion , and would need to raise between $432 billion and $576 billion from public markets in a single quarter.
For context: from 2016 to 2025, the entire U.S. IPO market raised only $469 billion. These three companies are asking for roughly the same amount in a single quarter.
"That is a big question in terms of how people reposition their portfolios," Marta Norton, chief investment strategist at Empower, told CNBC. "Is there room to just add AI or is this going to be kind of net-net flat and people are just repositioning within AI?"
The Dot-Com Echo
It's impossible to look at this moment and not think about the late 1990s. Companies with massive user growth, sky-high valuations, and no profits racing to go public at the peak of a speculative frenzy, the parallels write themselves.
Some of the numbers are genuinely eye-watering: OpenAI is valued at 28x projected 2026 revenue, while Nvidia, a company with near-monopoly status, high-speed growth, and ample cash flow, trades at only 12x forward earnings. As noted short-seller Jim Chanos put it bluntly: "Why give OpenAI a higher valuation than Nvidia?"
One fund strategist described the SpaceX offering as looking like a "massive liquidity grab," adding: "Private equity, VCs and other investors want out. The companies make zero sense at the valuations they're targeting."
Yet the bulls make a fair point too: what looks expensive today may look cheap in five years if AI transforms the global economy as profoundly as many expect. Apple took 48 years to build a $3 trillion market cap. These AI companies are asking for comparable valuations before proving they can be profitable at all. Is that reckless optimism, or the price of admission to the next industrial revolution?
What This Means for Everyday Investors
Even if you never buy a single share of OpenAI or SpaceX-xAI, these IPOs will affect you. Here's why:
Your 401(k) and index funds will likely hold these stocks. If the offerings go well, broad market indices get a lift. If they flop, the drag could be substantial, especially given the concentration risk. Multiple analysts have warned that if these IPOs underperform, it could deal a "significant blow" to AI investment sentiment broadly, with ripple effects across tech-heavy portfolios.
They'll reshape the competitive landscape. A well-funded, publicly-traded OpenAI is a very different animal from a privately-held one. Quarterly earnings pressure changes how companies make long-term bets. And the IPO sequencing matters: whichever company goes first gets to set the narrative that rivals have to respond to.
They'll set a price on AI's future. For all the hype, these IPOs will establish what public markets actually think artificial intelligence is worth, not what VCs in late-stage rounds believe, but what millions of everyday investors voting with their brokerage accounts decide.
The Courtroom Chapter Is Closed. The Wall Street Battle Is Just Beginning.
The symmetry is hard to ignore. Two men who co-founded OpenAI in 2015, fell out bitterly over its direction, and spent years attacking each other publicly and legally are now racing each other to the public markets, each carrying a valuation that would have seemed fantastical even two years ago.
Musk's SpaceX-xAI goes first, likely in June. Altman's OpenAI follows, likely in the fall. The jury in Oakland gave Altman the win on a technicality, but on Wall Street, there are no technicalities. There is only performance.
Musk may have lost in court. But if his IPO lands first and sets the bar, he might still win the war.
The only thing certain at this point? The AI IPO showdown of 2026 will be one of the most consequential financial events of the decade , and we'll all have a front-row seat.
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