OpenAI lawsuit moves to trial
- U.S. District Judge Yvonne Gonzalez Rogers dismissed Elon Musk’s fraud claims against OpenAI, Sam Altman and Greg Brockman on April 24, while letting the case proceed to trial on two narrower claims. - Jury selection is set for Monday in Oakland, with opening arguments Tuesday, after Musk cut his case to breach of charitable trust and unjust enrichment from 26 claims in his complaint. - The fight now centers on OpenAI’s shift from nonprofit lab to for-profit structure and its ties to Microsoft, a risk OpenAI flagged to investors. (cnbc.com)
A federal judge in Oakland narrowed Elon Musk’s lawsuit against OpenAI on Friday and sent the remaining claims to trial next week. (usnews.com) U.S. District Judge Yvonne Gonzalez Rogers dismissed Musk’s fraud and constructive fraud claims after Musk asked to drop them, leaving breach of charitable trust and unjust enrichment for a jury. Jury selection is scheduled for Monday, April 27, and opening arguments for Tuesday, April 28. (usnews.com) (finance.yahoo.com) Musk’s lawsuit seeks to unwind OpenAI’s for-profit conversion, remove Sam Altman and Greg Brockman from leadership, and return what he calls “ill-gotten gains” to OpenAI’s nonprofit arm. CNBC reported the suit values the fight at $134 billion. (cnbc.com) The case turns on a basic question from OpenAI’s 2015 founding: whether the lab was set up as a nonprofit that could later build commercial subsidiaries, or whether its backers promised it would stay nonprofit in perpetuity. Musk says the founders made the second promise. OpenAI says no such binding promise existed. (findlaw.com) (openai.com) Judge Gonzalez Rogers’ January summary-judgment order kept Musk’s charitable-trust claim alive against OpenAI and Altman, while trimming some claims against Microsoft. The order says Musk donated about $38 million to OpenAI in its early years, including quarterly payments in 2016 and 2017 and office-space support through 2020. (findlaw.com) OpenAI was founded in December 2015 by Musk, Altman, Greg Brockman and Ilya Sutskever as a nonprofit focused on artificial intelligence research for the public benefit. In 2019, OpenAI created OpenAI LP, a capped-profit subsidiary, and said at the time that Musk had left the board in February 2018. (findlaw.com) (openai.com) The trial arrives after Musk and Altman went from co-founders to direct rivals. Musk launched xAI in 2023, and OpenAI has told the court and the public that his lawsuit is part of a campaign to slow a competitor. (cnbc.com) (openai.com) OpenAI has also framed the litigation as a business risk while it weighs a public offering later this year. CNBC reported that investor materials described the Musk case as a potential risk to the company’s operations. (cnbc.com) The courtroom fight now looks smaller than Musk’s original complaint but more focused than before. By Tuesday, jurors are expected to hear a stripped-down case about whether OpenAI’s money-making pivot violated the nonprofit mission Musk says he helped fund. (bloomberg.com) (usnews.com)
