OpenAI lawsuit narrows
- Elon Musk dropped fraud and constructive fraud claims against OpenAI, Sam Altman and Greg Brockman on April 24, leaving a federal trial in Oakland to focus on two remaining claims. - U.S. District Judge Yvonne Gonzalez Rogers said the case will proceed on unjust enrichment and breach of charitable trust, with jury selection set for April 27 and openings expected April 28. - The lawsuit still targets OpenAI’s nonprofit-to-commercial shift and its Microsoft ties, even after Musk cut 24 of 26 claims. (usnews.com)
Elon Musk cut the fraud claims from his lawsuit against OpenAI days before trial, narrowing the case but not ending it. (usnews.com) U.S. District Judge Yvonne Gonzalez Rogers dismissed Musk’s fraud and constructive fraud claims on April 24 at his request in federal court in Oakland, California. Jury selection is scheduled for Monday, April 27, with opening statements expected Tuesday, April 28. (usnews.com) (straitstimes.com) That leaves two claims from Musk’s November 2024 complaint: unjust enrichment and breach of charitable trust. Bloomberg reported the judge agreed to Musk’s request to “streamline” a case that had grown to 26 claims. (bloomberglaw.com) (usnews.com) Musk says OpenAI broke its founding promise by moving away from its original nonprofit mission after creating a capped-profit structure and taking major backing from Microsoft. He is asking for damages that recent coverage has put at about $134 billion, with the money directed to OpenAI’s charitable arm. (businesstoday.in) (cnbc.com) He is also seeking structural remedies, including restoring OpenAI’s nonprofit status and removing Altman and Brockman from leadership roles. Reuters, via U.S. News, said Musk argued dropping the fraud counts would keep jurors focused on whether OpenAI became a “wealth machine.” (usnews.com) (businesstoday.in) OpenAI, Altman, Brockman and Microsoft deny the allegations. OpenAI has described Musk’s late changes to the case as a “legal ambush” and tied the fight to his rival artificial intelligence company, xAI, which Musk launched in 2023. (businesstoday.in) (engadget.com) The case reaches trial after months of discovery that turned up internal messages, emails and diary entries about OpenAI’s early governance and fundraising. The Washington Post reported this week that those filings exposed private exchanges among Musk, Altman and other OpenAI figures before the courtroom showdown. (washingtonpost.com) CNBC reported the trial lands as OpenAI prepares for a possible public offering later this year and as Musk readies a SpaceX listing. Even with the fraud counts gone, the trial still centers on who controls one of the most powerful companies in artificial intelligence and what its founding promises legally required. (cnbc.com)
