Elon Musk Sam Altman OpenAI lawsuit: Tesla owner loses case

Elon Musk waited too long to sue OpenAI and its leaders, a jury ruled, after a lawsuit he filed was barred by the statute of limitations

The jury made its decision after about 90 minutes of deliberation and their verdict was advisory, but Judge Yvonne Gonzalez Rogers said she agreed.

“The court now confirms its previous indication that it would accept the jury’s findings as its own,” Rogers said.

“I believe there is a significant amount of evidence to support the jury’s findings, and therefore I was prepared to dismiss on the spot.”

Musk helped found and fund OpenAI, raising US$38 million ($53 million) in its early years.

He sued CEO Sam Altman, company president Greg Brockman and OpenAI in February 2024, arguing that they “stole a charity” and wrongfully enriched themselves when they switched to a for-profit division structure.

“I was a fool,” Musk told the court earlier this month. “I gave them free funding to create a start-up.”

Musk’s case threatened to derail the ChatGPT maker as it planned what could be a blockbuster IPO. The jury’s decision is a victory for OpenAI and its founders, Altman and Brockman.

OpenAI’s lawyers argued that the company’s mission had not changed, that it was still run by a nonprofit foundation board, and that Musk waited to file the lawsuit until after he founded his own competing artificial intelligence company, xAI.

The jury agreed, finding that Musk was aware of the conduct discussed in the lawsuit as early as 2021.

“The jury’s findings confirm that this lawsuit was a hypocritical attempt to sabotage a competitor,” OpenAI attorney William Savitt said after the verdict.

“The fact is that OpenAI is a non-profit, mission-driven organization that is and will remain true to that mission.”

OpenAI’s lawyers also argued during the trial that Musk’s donations did not come with a promise to remain a nonprofit and that Tesla’s CEO at several points insisted that OpenAI create a for-profit entity to compete with Google.

They also said Musk tried to gain control of the profitable entity and left the company when he failed.

Musk asked the court to force OpenAI to repay more than $130 billion to OpenAI’s nonprofit, remove Altman and Brockman from their leadership roles and complete the corporate restructuring that made OpenAI one of the most valuable technology companies in the world.

OpenAI co-founder Ilya Sutskever and Shivon Zilis, an executive at Musk’s companies, former OpenAI board member and mother of four of Musk’s children, were among the high-profile witnesses who testified.

Hundreds of pages of private emails, text messages and minutes of internal meetings were submitted into evidence, including Brockman’s personal diaries and text messages between Musk and Meta CEO Mark Zuckerberg discussing potentially purchasing OpenAI together.

The trial revealed Google’s role in the creation of OpenAI as the AI ​​lab sought to surpass what was then considered the leader in the emerging AI race.

It also revealed the many fundraising options OpenAI was considering to support its computing and infrastructure needs, including cryptocurrency.

Musk’s romantic relationship was also in the spotlight, as Zilis’ testimony revealed that the two were romantically linked for much longer than previously known.

Details of how she acted as a conduit for Musk on OpenAI after his departure were also revealed in court.

Microsoft was also named as a co-defendant for “aiding” the claims through its investments in OpenAI. Musk left OpenAI in 2018 and started his own AI company, xAI, in 2023.

“The facts and timeline in this case have long been clear, and we are pleased with the jury’s decision to dismiss these claims as premature,” a Microsoft spokesperson said in a statement after the jury’s decision.

“She just gave out a free license to loot charities, if you can keep the looting quiet for a few years!” he wrote.

Musk’s lead attorney, Marc Toberoff, said at a news conference after the ruling that they planned to appeal.

“This is essentially a travesty, but for Musk they are getting away with it and they shouldn’t,” Toberoff said.