A California jury unanimously rejected Elon Musk’s lawsuit against OpenAI, concluding that his claims over the company’s restructuring and alleged misconduct were filed after the legal deadline allowed under California law.
Musk had accused OpenAI chief executive Sam Altman, OpenAI president Greg Brockman, OpenAI itself, and Microsoft of improperly transforming OpenAI from a nonprofit research organization into a for-profit business structure.
The lawsuit alleged that the defendants had effectively “stolen a charity” by creating OpenAI’s for-profit affiliate and enriching themselves through the company’s commercial expansion.
Jurors, however, found that any alleged harms Musk claimed to have suffered occurred before the applicable statute of limitations expired.
Case Focused On Timing Of Alleged Harms
The trial examined internal discussions, agreements, and disputes involving OpenAI’s founding leadership and its transition toward commercial AI development.
Much of the proceedings centered on whether Altman and other defendants had made promises to Musk and later violated them.
However, the jury ultimately determined that Musk failed to establish legally actionable claims within the required filing period.
OpenAI’s legal team argued that the alleged misconduct occurred years before Musk filed the lawsuit.
According to court proceedings, the relevant filing deadlines differed by claim but generally required harms to have occurred after dates in 2021 or 2022.
For one count, the deadline required harms after August 5, 2021. Another claim required events after August 5, 2022, while a third required harms after November 14, 2021.
Jurors accepted OpenAI’s statute of limitations defense after a relatively brief deliberation period.
“There was a substantial amount of evidence to support the jury’s finding, which is why I was prepared to dismiss on the spot,” Judge Yvonne Gonzalez Rogers said following the verdict.
OpenAI And Microsoft Respond To Verdict
The ruling removes a significant legal challenge that could have complicated OpenAI’s corporate structure and reported plans for a future public offering.
OpenAI lead attorney Bill Savitt criticized the lawsuit after the decision.
“It did not take [the jury] two hours to conclude … that Mr. Musk’s lawsuit is nothing more than an after-the-fact contrivance that bears no relationship to reality,” Savitt said.
“They kicked it exactly where it belongs — just to the side. This lawsuit is a hypocritical attempt to sabotage a competitor,” he added.
Microsoft, which Musk accused of aiding and abetting OpenAI’s alleged breach of charitable trust, also welcomed the outcome.
A spokesperson for Microsoft said the company “remained committed to our work with OpenAI to advance and scale AI for people and organizations around the world.”
Judge Questioned Musk’s Damages Analysis
The verdict was delivered while the court was separately hearing arguments regarding potential damages that Musk could have received had the jury ruled in his favor.
Those discussions became irrelevant after the dismissal.
During the damages hearing, Judge Gonzalez Rogers questioned the methodology used by Musk’s expert witness, C. Paul Wazzan, who estimated OpenAI and Microsoft’s alleged wrongful gains at between $78.8 billion and $135 billion.
“Your analysis seems to be devoid of connection to the underlying facts,” the judge told Wazzan.
Musk’s legal team had attempted to compare his charitable contributions to investments in a for-profit startup structure.
Musk Says He Will Appeal
Following the ruling, Musk argued on X that the dismissal rested on procedural timing issues rather than the substance of his allegations.
“There is no question to anyone following the case in detail that Altman & Brockman did in fact enrich themselves by stealing a charity. The only question is WHEN they did it!” Musk wrote.
He also said he plans to appeal the decision to the Ninth Circuit Court of Appeals.
“I will be filing an appeal with the Ninth Circuit, because creating a precedent to loot charities is incredibly destructive to charitable giving in America,” Musk wrote.
Featured image credits: Flickr
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