Musk loses OpenAI lawsuit

Elon Musk lost his lawsuit against OpenAI on Monday after a federal jury in Oakland, California, found that he waited too long to sue over the company’s shift away from its original nonprofit structure. The nine-person advisory jury deliberated for less than two hours before U.S. District Judge Yvonne Gonzalez Rogers adopted the verdict and dismissed the claims. Musk had accused OpenAI, Chief Executive Sam Altman, co-founder Greg Brockman and Microsoft of betraying the founding mission of the artificial intelligence lab. Musk said on X after the verdict that he would appeal, calling the decision a “calendar technicality.” ### Why did Musk lose without the jury deciding whether OpenAI broke its mission? California’s three-year statute of limitations decided the case. Jurors found Musk’s claims were filed outside the legal deadline, and Rogers accepted that finding immediately after the verdict. The court therefore did not rule on whether OpenAI in fact breached any charitable obligations or whether Altman and Brockman improperly enriched themselves. (cnbc.com) CNBC reported that Rogers said there was “a substantial amount of evidence” supporting the jury’s finding on timeliness. NBC News reported that Musk’s lawyer Steven Molo told the court, “We want to get going on the appeal,” and later described the ruling as focused on “technical legal issues.” ### Who exactly was Musk suing? Musk sued OpenAI, Altman, Brockman and Microsoft. (cnbc.com) His case argued that OpenAI had abandoned the founding idea that it would remain a nonprofit dedicated to developing artificial intelligence for humanity’s benefit, and that Microsoft had aided the shift through its investment relationship with OpenAI. Musk helped found OpenAI in 2015 and left its board in 2018. He sued in 2024, alleging that the company and its leaders had violated commitments tied to OpenAI’s original structure. Microsoft, which invested in OpenAI as early as 2019, was also named in the suit. ### What did the verdict say about Microsoft and the other defendants? (cnbc.com) The unanimous verdict cleared all of the named defendants in this case on timeliness grounds. NBC News reported that the jury rejected Musk’s claim that Microsoft aided and abetted Altman and Brockman in an alleged breach of duty to OpenAI. Microsoft said in a statement that “the facts and the timeline in this case have long been clear” and welcomed dismissal of the claims as untimely. (cnbc.com) AP and Reuters both reported the result as a broad courtroom win for OpenAI and its executives after a three-week trial in federal court in Oakland. Reuters said the verdict removed an obstacle as OpenAI considers a possible initial public offering. That IPO point is based on Reuters’ reporting about company plans, not on any court finding. (nbcnews.com) ### What did Musk say after the loss? Musk said on X that “the judge & jury never actually ruled on the merits of the case, just on a calendar technicality.” CNBC separately reported that he wrote there was “no question” Altman and Brockman had enriched themselves, while disputing only the timing issue decided at trial. Marc Toberoff, another lawyer for Musk, told CNBC outside the courthouse that the case was “about preserving charities from this kind of exploitation.” Molo said the legal team hoped an appeals court would reverse rulings and jury instructions tied to the statute of limitations. (apnews.com) ### Why does this case matter for OpenAI right now? (cnbc.com) OpenAI is one of the world’s most valuable private technology companies, and Reuters has reported that it has considered a possible IPO. Reuters said Monday’s verdict removed a legal obstacle to those plans because Musk’s suit had challenged the company’s move away from its original nonprofit mission. (cnbc.com) NBC News reported that the verdict preserved the status quo for OpenAI after a trial that had drawn broad attention across the technology industry. The company behind ChatGPT still faces scrutiny over its governance and structure, but this case no longer blocks it at the trial-court level. ### What happens next in court? (usnews.com) The next step is an appeal to the 9th U.S. Circuit Court of Appeals, which Musk and his lawyers said they intend to pursue. Judge Rogers entered judgment after adopting the advisory jury’s findings on May 18 in Oakland, and the appeal will focus on the statute-of-limitations rulings and related jury instructions, according to Musk’s lawyers. (cnbc.com) (nbcnews.com)