Elon Musk’s Lawsuit Against OpenAI Dismissed by Jury
In a significant ruling, a jury in Oakland decided against Elon Musk in his $150 billion lawsuit against OpenAI. The nine-member jury found that Musk had waited too long to file his case, thereby clearing CEO Sam Altman, President Greg Brockman, and the organization of accusations that they misappropriated a charity Musk helped establish. Microsoft, named in the suit for allegedly assisting in this act, was also dismissed on similar grounds regarding the timing of the lawsuit. The jury arrived at their decision in roughly two hours.
The three-week trial saw many high-profile figures, including Musk, leaders from OpenAI, and Microsoft CEO Satya Nadella, take the stand. The courtroom sessions largely revolved around the examination of emails, texts, and other documents exchanged between the parties. Musk notably responded “I don’t recall” over 150 times during cross-examination.
Judge Yvonne Gonzalez Rogers accepted the verdict promptly, but Musk was absent during the announcement, as were Altman and Brockman. Musk had aimed for an impressive outcome: $150 billion in damages, the removal of Altman from the OpenAI board, and the dismantling of OpenAI’s for-profit structure, but he achieved none of these.
Timing Was Key in the Ruling
The decision boiled down to a matter of timing rather than the case’s actual merits. According to California law, a breach-of-charitable-trust claim must be filed within three years of when the plaintiff became aware of the issue. Musk’s legal team struggled to prove that he was unaware of OpenAI’s decisions related to its structure before August 2021. The jury determined he had been aware and had delayed action for years.
Similarly, his claim against Microsoft, which was filed four months later, faced the same timing restrictions and was also dismissed.
Musk’s Delayed Lawsuit: Five Years Lapsed
Musk co-founded OpenAI with Altman in December 2015, aiming to create a nonprofit to balance Google’s influence in AI. He contributed around $38 million over the next two years but resigned from the board in February 2018 after failing to gain majority control. By March 2019, OpenAI announced a plan to form a capped-profit branch to secure funding for AI research, attracting $1 billion from Microsoft shortly after.
Musk’s assertion that this change constituted a betrayal had become widely known and documented by that time. Court evidence indicated that Musk had even proposed a for-profit model for OpenAI in 2017. His lawsuit, however, didn’t surface until summer 2024, almost five years after OpenAI reorganized. The jury concluded that Musk’s delayed action was a significant issue, leaving unresolved the question of whether OpenAI still aligned with its original mission.
Implications for Musk and OpenAI
For Musk, the verdict resulted in a total loss; he received none of his desired outcomes. His own venture, now part of SpaceX and known as SpaceXAI, is reportedly preparing for an IPO valued at over $1.75 trillion, countering suggestions that his lawsuit was a strategy to undermine a competitor before going public.
For OpenAI, this ruling provides a clean slate. The company can now move forward with plans for an IPO that could potentially reach a valuation of $1 trillion. If Musk had succeeded, it might have led to the dissolution of OpenAI’s for-profit arm, complicating its position against competitors like Google and Anthropic. Altman retains his board role, and Brockman keeps his significant stake in the company. Microsoft also maintains its essential partnership with OpenAI, which has invested heavily in the collaboration.
