Jury sides with OpenAI, rejects Musk’s lawsuit

Jury Rules Against Musk in OpenAI Lawsuit

A federal jury in Oakland, California, sided with OpenAI and Sam Altman on Monday, rejecting Elon Musk’s lawsuit alleging the artificial intelligence company betrayed its nonprofit mission when it shifted toward a for-profit model. The nine-member jury found that Musk’s case was filed too late, ending the closely watched legal battle that had threatened to upend one of the most valuable private companies in the world.

Statute of Limitations Proves Decisive

The verdict turned on the threshold question that legal experts had identified as Musk’s greatest vulnerability: whether his 2024 lawsuit was filed within the statute of limitations. OpenAI’s attorneys argued throughout the trial that Musk’s $38 million in donations had been fully spent by 2020, well before the applicable deadlines, and that Musk had been aware of OpenAI’s direction for years before suing.mlex

A forensic accountant hired by OpenAI testified that all of Musk’s donations had been used before August 2021 — the key cutoff date for his breach of charitable trust claim. Musk’s legal team countered that under California’s discovery rule, the clock should not have started until he fully understood the extent of OpenAI’s commercial transformation, pointing to Microsoft’s $10 billion investment in 2023 as the triggering event.techcrunch

Three Weeks of Silicon Valley Drama

The trial, which began in late April before U.S. District Judge Yvonne Gonzalez Rogers, featured testimony from some of the biggest names in technology, including Microsoft CEO Satya Nadella and OpenAI co-founder Ilya Sutskever. Musk accused Altman and OpenAI President Greg Brockman of “misappropriating a charity” by securing billions in investment and transforming a small nonprofit laboratory into a technology giant now valued at roughly $850 billion.nytimes

OpenAI’s attorneys characterized the lawsuit as “sour grapes” from a co-founder who left the organization in 2018 and later launched a competing AI venture, xAI. The jury’s verdict was advisory, with Judge Gonzalez Rogers retaining final authority over the liability determination.cnbc

Implications for OpenAI’s Future

The ruling removes a legal cloud that had hung over OpenAI as it prepares for a potential initial public offering that could value the company at $1 trillion. Musk had sought not only billions in damages but also the removal of Altman and Brockman from their positions and the unwinding of OpenAI’s for-profit conversion. With the jury finding the case untimely, those remedies are now effectively off the table — though Judge Gonzalez Rogers will issue the final ruling on liability in the coming weeks.x