OpenAI defeats Musk lawsuit

Elon Musk lost his lawsuit against OpenAI on May 18 after a federal jury in Oakland, California, found that he had waited too long to sue. The unanimous verdict found OpenAI, Chief Executive Sam Altman and President Greg Brockman not liable on Musk’s claims because the case was barred by the statute of limitations. U.S. District Judge Yvonne Gonzalez Rogers accepted the jury’s finding and dismissed the claims. (cbsnews.com) Reuters reported the decision removed a legal obstacle to a possible OpenAI initial public offering. (nbcnews.com) Musk had accused OpenAI’s leaders of abandoning the company’s founding nonprofit mission and enriching themselves through its for-profit structure. The ruling did not resolve that broader governance argument on the merits. Musk said after the verdict that the judge and jury ruled on “a calendar technicality,” and not on the substance of his allegations. ### Why did Musk lose? The jury found that Musk filed too late under the applicable limitations periods. CBS reported that the nine-person jury, serving in an advisory role, found Musk missed a three-year window to file his claim, and that OpenAI had argued he could not claim harm occurring before August 2021. (cbsnews.com) NBC reported the same limitations ruling also defeated Musk’s claim that Microsoft aided and abetted Altman and Brockman. Judge Gonzalez Rogers said in court there was “a substantial amount of evidence” supporting the jury’s finding, according to Reuters. (cbsnews.com) She said she was prepared to dismiss the case immediately, and Reuters said she indicated Musk could face a difficult appeal because the limitations question was factual. ### What was Musk trying to prove? Musk’s 2024 lawsuit said Altman, Brockman and OpenAI broke a promise to keep the organization focused on benefiting humanity as a nonprofit. Reuters reported Musk said he had been manipulated into contributing $38 million in OpenAI’s early years before the company added a for-profit arm and later took large investments from Microsoft and others. (cbsnews.com) MIT Technology Review said Musk sought to unwind OpenAI’s 2025 restructuring into a public benefit corporation and remove Altman and Brockman from leadership roles. (usnews.com) OpenAI was founded in 2015 by Altman, Musk and others, and Musk left its board in 2018. Reuters said OpenAI created a for-profit business in 2019. That sequence mattered because OpenAI argued Musk had reason to know of the challenged conduct years before he sued. ### How fast did the verdict come back? Jurors deliberated for less than two hours before returning a unanimous verdict. CBS, NBC and Reuters all reported the short deliberation. None of the tech billionaires was in court to hear the verdict, NBC said. (usnews.com) OpenAI lawyer William Savitt said outside court that the lawsuit was “a hypocritical attempt to sabotage a competitor,” CBS reported. Microsoft said it welcomed the decision dismissing the claims as untimely. (usnews.com) ### Did the ruling answer the fight over OpenAI’s mission? Musk said it did not. In a post on X after the verdict, he said the case had not been decided on the merits and said he would appeal. His lawyer Steven Molo told reporters he viewed the ruling as a narrow decision on “technical legal issues,” NBC reported. (cbsnews.com) Reuters framed the effect more narrowly than the rhetoric around the trial. It reported the verdict simplified OpenAI’s path toward a possible IPO, but the ruling itself rested on timing rather than a broad judicial endorsement of OpenAI’s governance model. (cbsnews.com) ### What happens next? Musk said on May 18 that he plans to appeal the dismissal. Reuters said OpenAI is now freer to pursue a possible public offering that could value the company at $1 trillion, while CBS reported the company had been expected to go public later this year. (nbcnews.com) (cbsnews.com) (usnews.com)