Federal Judge Rules Musk’s Lawsuit Against OpenAI to Proceed

A federal judge in California has decided that Elon Musk’s lawsuit against OpenAI and its CEO, Sam Altman, has enough merit to go to trial. This ruling came as Judge Yvonne Gonzalez Rogers rejected attempts by OpenAI’s legal team to dismiss the case.

During a hearing on Wednesday, the judge indicated her intention to deny a motion from Altman’s attorney aimed at dropping Musk’s lawsuit. With this decision, the trial is currently set to take place in March.

The lawsuit, initially filed by Musk in 2024, revolves around claims that OpenAI misled him regarding its change from a nonprofit to a profit-oriented business model. Musk alleges that he contributed around $38 million to the company, under the impression he was supporting an entity focused on benefiting humanity through AI technology, versus one seeking commercial gain.

Musk is seeking financial restitution and a ruling that would nullify OpenAI’s licensing agreement with Microsoft. His complaints assert that OpenAI’s collaboration with Microsoft and its shift toward profit motives represent a significant betrayal of its initial mission to early supporters.

Judge Gonzalez Rogers pointed out that there appears to be considerable evidence substantiating Musk’s claims during the hearing, although she acknowledged that much of this evidence is circumstantial. He noted that it’s common for circumstantial evidence to feature in such cases.

On Wednesday, the judge remarked that the evidence suggests promises were made regarding OpenAI’s organizational structure that later seemed to be unfulfilled. She also highlighted the possibility that crucial information had been withheld from Musk. Nonetheless, she recognized that OpenAI’s defense had presented a strong counterargument, emphasizing that a jury would ultimately need to resolve the factual discrepancies involved.

OpenAI’s legal representatives have continuously denied Musk’s allegations, arguing that he was made aware of the company’s shift toward a for-profit model back in 2018. They maintain that despite the structural changes, the organization still operates under a nonprofit framework. In a statement, an OpenAI spokesperson dismissed Musk’s lawsuit as baseless, framing it as part of a broader pattern of harassment. They also affirmed their commitment to the OpenAI Foundation, which they describe as one of the most well-funded nonprofits around.

Stephen Moro, Musk’s attorney, expressed appreciation for the court’s ruling and stated that the defense team looks forward to presenting their evidence regarding the alleged misconduct to the jury.

This lawsuit is just one of several Musk has initiated against OpenAI. In September, xAI, the AI company Musk founded, filed a separate lawsuit against OpenAI, claiming it stole confidential information and aimed to poach xAI employees. An OpenAI spokesperson at that time labeled it as further harassment from Musk.

Musk’s involvement with OpenAI began in 2015 as one of its founding members, but he departed in 2018, citing potential conflicts of interest between his roles at OpenAI and Tesla’s AI initiatives. Since leaving, he has been openly critical of both Altman and OpenAI, especially concerning their organizational structure and business decisions.