OpenAI wins court fight with Musk

OpenAI beat Elon Musk in federal court on Monday, when a jury in Oakland rejected his lawsuit over the company’s shift from nonprofit roots to a for-profit business. The verdict removed what Reuters described as the biggest immediate legal threat to OpenAI as it weighs a possible public offering. But the trial also produced days of testimony from former colleagues and associates who challenged Chief Executive Sam Altman’s credibility under oath. Separate lawsuits over copyright, safety and wrongful death remain pending against the ChatGPT maker. ### How did Musk lose the case? A nine-member jury in Oakland rejected Musk’s claims after finding he had waited too long to sue, according to Reuters and other reports. Musk had sought about $150 billion and accused OpenAI, Altman, President Greg Brockman and Microsoft of abandoning the organization’s founding mission as a nonprofit built for the benefit of humanity. Elon Musk said after the verdict that the judge and jury had not ruled on the merits of his allegations and that he would appeal to the 9th U.S. Circuit Court of Appeals. In a post cited by Deseret News, Musk said the case had been decided on “a calendar technicality.” ### Why was the testimony damaging even in victory? (money.usnews.com) Reuters reported on May 19 that Sam Altman won in court but had to sit through testimony from former colleagues who called him a liar repeatedly under oath. During cross-examination, Musk’s lawyer cited comments from eight witnesses, including Musk, who said Altman had misled or lied to others, Reuters said. (deseret.com) Altman denied that account on the stand. “I believe I am an honest and trustworthy businessperson,” he testified, according to Reuters. OpenAI’s lawyers argued that Musk’s team had resorted to a “character assassination” campaign instead of proving its claims. (money.usnews.com) ### What did OpenAI gain from the verdict? Reuters said the ruling simplified OpenAI’s path toward an initial public offering by removing a case that had threatened both its leadership and a potential payout of roughly $150 billion. Trial lawyer James Rubinowitz told Reuters that the verdict removed “the single largest legal threat” to a public offering, even as the public record now contains more material about the company’s governance. (money.usnews.com) The New York Times reported that OpenAI employees celebrated at the courthouse after the jury rejected Musk’s suit in less than two hours. The paper said the decision cleared one major hurdle as the company pursues growth in a more crowded AI market. ### What legal fights are still ahead for OpenAI? The New York Times reported on May 19 that OpenAI is still dealing with dozens of lawsuits, including copyright cases and wrongful-death allegations. (money.usnews.com) The paper said those disputes come as rivals such as Google and Anthropic intensify competition in generative AI. A federal court order in the Southern District of New York shows that multiple copyright cases against OpenAI and Microsoft have been grouped around claims by authors, news organizations and other rights holders over training data and model outputs. (nytimes.com) Separately, CBS News and Bloomberg Law reported this month on a wrongful-death suit alleging ChatGPT provided drug-related advice before a teenager’s fatal overdose. ### Why does this case matter beyond the two men? Reuters described the Oakland trial as a public airing of the dispute between two OpenAI co-founders at a moment when the company is seeking investor trust and defending its governance. The testimony turned the case into a direct fight over whether Altman or Musk had tried to control the organization’s future. (courthousenews.com) The New York Times said the company now faces tighter competition, mounting litigation and fresh scrutiny over how it balances commercial growth with safety promises. Those questions are likely to continue in court filings, appeal papers and any future IPO documents tied to OpenAI, Musk, Microsoft and the pending copyright and wrongful-death cases. (nytimes.com) (money.usnews.com)