OpenAI beats Musk in court

A U.S. jury in Oakland, California, on May 18 rejected Elon Musk’s lawsuit against OpenAI, Sam Altman and other defendants, finding the case was filed too late. Judge Yvonne Gonzalez Rogers adopted the advisory jury’s unanimous verdict and dismissed Musk’s claims, according to Reuters, the Associated Press and other outlets. The case had centered on Musk’s accusation that OpenAI abandoned its founding nonprofit mission and used assets he helped fund for commercial gain. The ruling removes one of the company’s biggest legal overhangs as it continues to expand its business and weigh future corporate options. ### Why did Musk lose without the jury deciding OpenAI’s original mission fight? The nine-member jury found Musk’s claims were barred by the statute of limitations, not that the broader dispute over OpenAI’s mission had been resolved on the merits. Reuters reported the verdict was unanimous, and MIT Technology Review said Musk later argued on X that the court had ruled on a “calendar technicality.” Judge Gonzalez Rogers accepted the jury’s recommendation shortly after it was returned. (usnews.com) Elon Musk had sued in 2024, arguing that OpenAI’s leaders breached commitments to keep the organization focused on developing artificial intelligence for humanity rather than private profit. CNBC’s trial coverage said Musk claimed roughly $38 million in contributions had been diverted to unauthorized commercial purposes after OpenAI created a for-profit subsidiary following his 2018 departure from its board. (usnews.com) ### Which people and companies were at the center of the case? Sam Altman and Greg Brockman were among the central figures named in the dispute, alongside OpenAI and Microsoft. Musk had sought to remove Altman from leadership and argued that OpenAI’s restructuring enriched executives and partners at the expense of its original charter, according to Texas Public Radio and the Associated Press. Microsoft, which was tied to the case through its partnership with OpenAI, welcomed the outcome, PBS reported. (cnbc.com) OpenAI was founded in 2015 as a nonprofit research lab, and Musk was one of its co-founders before leaving years before ChatGPT made the company a global consumer brand. The lawsuit became one of the most visible public breaks between Musk and Altman, who have been at odds over OpenAI’s direction and over the broader commercial race in artificial intelligence. (tpr.org) ### What does the ruling change for OpenAI right now? Reuters said the verdict removes an obstacle to a possible eventual OpenAI initial public offering, because it clears away a lawsuit that had challenged the company’s corporate evolution. That does not end OpenAI’s legal exposure. The New York Times reported on May 19 that the company still faces dozens of other lawsuits even as it celebrates the Musk win. (apnews.com) The Los Angeles Times reported that the trial was the latest chapter in a bitter feud over whether OpenAI had transformed a charitable project into a profit-seeking company. That question remains politically and commercially sensitive even after the dismissal, because OpenAI continues to rely on investors, cloud partners and regulators as it scales its products. That last point is an inference based on the company’s business position and ongoing litigation, rather than a court finding. (usnews.com) ### If the lawsuit is over, what pressure is still on OpenAI? The New York Times said rivals including Anthropic and Google are improving their systems while OpenAI deals with litigation and scrutiny over its structure. Business Insider reported that, with the Musk case out of the way, OpenAI’s rivalry with Anthropic is moving closer to the center of the company’s fight for market share and public-market credibility. (latimes.com) Musk has indicated he plans to appeal, according to MIT Technology Review, so the legal fight may not be fully finished even after the May 18 verdict. In the nearer term, OpenAI’s next milestones are likely to be tracked through any appeal filings, further court proceedings in its other cases, and any future disclosures about fundraising or corporate structure involving Altman, Microsoft and other investors. (technologyreview.com) (nytimes.com)