FOR IMMEDIATE RELEASE
Jury Rules Musk Waited Too Long to Sue OpenAI, Dismisses Landmark Case
OAKLAND, CA – A federal jury in Oakland, California, has ruled that Elon Musk waited too long to sue OpenAI, its CEO Sam Altman, and President Greg Brockman, dismissing his claims that the company breached its founding nonprofit mission by converting to a for-profit structure.
The jury deliberated for less than two hours before reaching a unanimous advisory verdict.
Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California accepted the jury's finding and dismissed the case. Musk has stated he will appeal.
Verdict and Legal Basis
The nine-person jury found that Musk's claims were barred by the three-year statute of limitations. The jury determined that Musk had sufficient knowledge of the alleged breach of trust more than three years before filing the lawsuit in 2024.
The jury did not address the substance of Musk's allegations regarding breach of charitable trust, unjust enrichment, or breach of contract. Judge Rogers stated there was "a substantial amount of evidence to support the jury's finding."
Core Allegations
Musk's lawsuit, filed in August 2024, alleged that Altman and Brockman violated a founding agreement when OpenAI restructured from a nonprofit to a for-profit entity. Musk claimed he was deceived into providing approximately $38 million in early funding under the pretense that OpenAI would remain a nonprofit dedicated to developing artificial intelligence for humanity's benefit.
He argued that the organization's partnership with Microsoft and its creation of a for-profit arm enriched insiders at the expense of the charitable mission.
OpenAI's Defense
OpenAI's legal team argued that Musk was aware of plans to create a for-profit entity as early as 2017. They stated that Musk himself sought majority control of a for-profit subsidiary, initially proposing 90% equity, and left the company in 2018 after those efforts failed.
OpenAI's lawyers characterized the lawsuit as a "harassment campaign" and a "hypocrite's hypocritical attempt to sabotage a competitor." They maintained that Musk only objected to the for-profit structure after launching his own competing AI company, xAI, in 2023.
Trial Proceedings
The trial took place over three weeks in federal court in Oakland, California. Testimony was provided by over a dozen witnesses, including Musk, Altman, Brockman, Microsoft CEO Satya Nadella, and former OpenAI board members and employees.
Key Witness Testimony
Elon Musk testified for three days. He described his concerns about AI safety and stated he founded OpenAI as a counterweight to Google. He acknowledged agreeing to a for-profit arm to raise funds but testified that Microsoft's $10 billion investment in 2023 went too far, calling the nonprofit "looted." During cross-examination, Musk had tense exchanges with OpenAI's legal team.
Sam Altman testified that the co-founders did not want a single person to control AGI and that Musk was not a good fit for the company. Altman stated that Musk had proposed taking 90% equity in the for-profit subsidiary and suggested control could pass to his children upon his death. Altman denied the characterization of "stealing a charity," stating, "We created one of the largest charities in the world."
Greg Brockman testified about a 2017 meeting at Musk's Hillsborough estate where Musk demanded full control of a planned for-profit arm. Brockman stated that when his demand was refused, Musk left the meeting angrily. Brockman's personal diary was entered into evidence, containing entries about the moral implications of converting OpenAI and personal ambitions regarding wealth.
Satya Nadella testified that Musk thanked him for Microsoft's financial support of OpenAI in 2016 and never complained about the growing partnership. Nadella described the November 2023 board ouster of Altman as "amateur city" and stated he intervened to facilitate Altman's return.
Shivon Zilis, a former OpenAI board member and mother of four of Musk's children, testified that she did not funnel confidential information to Musk while on the board. Text exchanges showed her asking Musk whether to "stay close and friendly to OpenAI to keep info flowing."
Former OpenAI board members and employees testified regarding Altman's candor and leadership. Former board member Tasha McCauley stated Altman fostered a "culture of lying and deceit." Former chief scientist Ilya Sutskever confirmed he told the board Altman exhibited a "consistent pattern of lying."
Relief Sought
Musk sought up to $150 billion in damages, the removal of Altman and Brockman from their leadership positions, and an order reverting OpenAI to full nonprofit status. The dismissal renders these remedies moot for the current case.
Background
OpenAI was founded in December 2015 as a nonprofit organization by Musk, Altman, Brockman, and others, with a mission to develop AI for humanity's benefit. Musk contributed approximately $38 million in funding between 2016 and 2020. He left the organization's board in February 2018 after disagreements over leadership and direction.
In 2019, OpenAI created a for-profit subsidiary to raise capital, with Microsoft making initial investments. Microsoft has invested over $100 billion in its partnership with OpenAI, receiving a 27% ownership stake in the 2025 restructuring. Musk launched his competing AI company, xAI, in July 2023.
Implications
The dismissal removes a significant legal threat to OpenAI, which has raised billions in funding at an $852 billion valuation and may pursue an initial public offering. Musk's separate claims regarding monopoly and antitrust violations against OpenAI and Microsoft remain pending.
Musk has stated he will appeal the jury's verdict.
Legal analysts note that the case did not resolve the broader question of whether OpenAI's restructured model aligns with its original charitable mission.