All of Musk’s claims in lawsuit against OpenAI rejected in federal trial

A federal judge dismissed all of Tesla CEO Elon Musk’s claims against OpenAI on Monday after a jury found that he exceeded the statute of limitations in a lawsuit against the artificial intelligence company.

The decision is an outright win for OpenAI in a trial that pitted Musk against the maker of ChatGPT and two of the men with whom he co-founded the company in 2015: OpenAI’s chief executive, Sam Altman, and its president, Greg Brockman. Musk left OpenAI in 2018 after a conflict with Brockman and Altman over who would control the organization. (The Washington Post has a content partnership with OpenAI). 

After a three-week trial in Oakland, California, that featured hundreds of pages of documents and hours of testimony from Musk, Altman and a parade of former OpenAI executives and board members, the jury deliberated for just two hours.

After the jurors’ advisory verdict was read, the judge, who held the ultimate authority to decide the case, confirmed the decision and threw out Musk’s claims that Altman and Brockman had betrayed OpenAI’s founding mission and turned the company into a for-profit entity for personal enrichment.

The decision removes a significant potential threat to OpenAI’s ability to keep up in the hotly contested AI race.

“It is a major pie in the face for the world‘s wealthiest man. He had top legal counsel, and to lose on statute-of-limitations grounds is extremely embarrassing,” said Andrew Stoltmann, a corporate litigation lawyer who was not involved in the case. “Conversely, this is a massive win for Altman, who went toe-to-toe with the world’s wealthiest man and won.”

OpenAI had argued in court that Musk’s lawsuit was motivated in part by a desire to hurt a competitor to his own, for-profit AI venture, xAI, founded in 2023.

Hours after the verdict was read, Musk criticized the judge’s decision in a post on X, his social media platform, and said he would appeal.

“This illustrates why the ruling by the terrible activist Oakland judge, who simply used the jury as a fig leaf, creates such a terrible precedent,” he wrote. “She just handed out a free license to loot charities if you can keep the looting quiet for a few years!”

Bill Savitt, OpenAI’s lead attorney, said to reporters outside the courthouse after the verdict was read that Musk’s suit was “a hypocritical attempt to sabotage a competitor and to overcome a long history of very bad predictions about what OpenAI has been and what it will become.”

In his lawsuit in the U.S. District Court for the Northern District of California, Musk had demanded that Brockman and Altman step down and that all equity in OpenAI’s for-profit entity be returned to its nonprofit parent company.

That would have led to paralysis for OpenAI, which relies on billions of dollars from outside investors to pay its employees and continue the hugely expensive work of training and running AI models. OpenAI is expected to go public later this year or early next year.

For Musk, the decision is a rebuke of his years-long campaign against OpenAI and Altman. The two men co-founded OpenAI with Brockman and others in 2015 to develop AI to benefit all of humanity as a counterweight to Google, which was the leader in the industry at the time.

But the men soon realized OpenAI would need more than donations to keep up in the AI race. They argued over who should control the company if it were to take on more traditional investment, and Musk left OpenAI in 2018, saying it had no chance of succeeding on its own.

Since then, OpenAI has taken billions in funding from investors, including Microsoft, and kicked off the AI arms race with its release of ChatGPT in late 2022. Musk argued during the trial that he had become suspicious of OpenAI’s actions during that period but that it was only in 2023 that he realized the company had fundamentally changed and was now enriching its leaders rather than focusing on its mission.

OpenAI’s attorneys pointed to evidence during the trial that showed Altman keeping Musk apprised of developments at the company even after he left, including the investments from Microsoft. Musk said during his testimony that he didn’t read the entirety of a document sent to him providing details of one of Microsoft’s investments.

Musk was present in court for most of the first week of the trial, including on days he did not testify. He later flew to China as part of the business delegation accompanying President Donald Trump during his visit to the country last week, despite technically still being required to appear again in court if called.

Though Musk ultimately lost, the trial shone a spotlight on Altman and provided a new venue for claims by former colleagues that he was not a trustworthy business partner.Altman’s investments in start-ups that do business with OpenAI were brought up repeatedly during the trial.

The proceedings also disclosed new data illustrating the immense riches created by OpenAI’s success. Brockman testified that his stake in the company is worth around $30 billion.

Filings in the case revealed unflattering details from private messages by Musk and other tech figures, including Meta chief executive Mark Zuckerberg. Details of Musk’s private life were aired through the testimony of Shivon Zilis, who for years worked for the Tesla CEO and was his primary connection to OpenAI but later also became mother to four of his children.

It’s unclear whether Musk will indeed appeal the ruling or whether such an appeal would be taken up by a higher court after the statute-of-limitations findings. The billionaire has said in the past that it is important to file lawsuits out of principle, even if they are unlikely to win on their legal merits.

The jury’s unanimous verdict came abruptly, while the judge was holding a hearing with the two sides to determine potential consequences for OpenAI if Musk were to win. The court clerk read the verdict, and the judge, Yvonne Gonzalez Rogers, confirmed the decision seconds later.

“I think it’s an important issue to be tried,” Gonzalez Rogers said. “It’s important to have trials. They bring clarity.”