Federal Jury Rules Against Elon Musk in OpenAI Case
A federal jury in Oakland, California, ruled on Monday against Elon Musk in a significant case involving OpenAI and its CEO, Sam Altman. The jury determined that Musk’s claims were filed too late, outside the statute of limitations. Musk, clearly frustrated, attributed the outcome to “the peculiarities of the calendar” and expressed intentions to appeal.
The jury deliberated for less than two hours before arriving at their verdict, concluding that Musk took too long to initiate the lawsuit against the AI entity and its CEO, along with Microsoft. District Court Judge Yvonne Gonzalez Rogers quickly accepted the jury’s decision, marking a notable setback for Musk in his dispute with his former partners in AI.
Interestingly, the court did not evaluate the main point that Musk raised—that OpenAI failed to adhere to its commitment of operating strictly as a nonprofit. Instead, the focus was solely on timing, with the jury finding Musk’s allegations of breach of charitable trust fell outside the required three-year statute of limitations for such complaints.
Reacting swiftly on his social media platform X, Musk dismissed the ruling as a mere “calendar technicality.” He added, “For those following this case closely, there is no question that Altman and Brockman did indeed steal from charity to line their own pockets. The only question is when they did it!”
Musk and his legal team wasted no time in announcing plans to appeal the verdict to the U.S. Court of Appeals for the 9th Circuit. His attorney, Stephen Moro, mentioned the option to appeal directly to Judge Gonzalez Rogers, although the judge expressed doubt about that possibility. She noted, “There is a substantial amount of evidence to support the jury’s findings,” at the conclusion of the three-week trial.
Mark Toberoff, another lawyer for Musk, spoke to reporters outside the courthouse, framing the case in broader terms. “At its core, it’s about protecting charities from this kind of exploitation. If they can get away with it, they shouldn’t do it,” he stated.
The lawsuit, launched by Musk in 2024, accused Altman and OpenAI of violating an agreement that was supposed to keep the Artificial Intelligence Institute as a nonprofit. Musk had been a co-founder of OpenAI in 2015 but stepped down from the board three years later. During the trial, he testified to donating around $38 million to OpenAI with the understanding that the organization would work on artificial intelligence for the greater good of humanity, not for personal gain.
Microsoft, which began investing in OpenAI in 2019, was also named in the lawsuit. Musk accused the tech giant of facilitating the alleged violations involving charitable trust. The court also dismissed the allegations against Microsoft.
William Savitt, the lead attorney for OpenAI, described the ruling as substantive rather than merely technical. He remarked, “You submitted your claim too late, and you did so in a complacent manner to use it as a weapon against your competitors who can’t compete in the market. So we’re glad we got it.” The legal teams for both OpenAI and Microsoft celebrated the outcome as they left the courthouse.
Microsoft’s legal representatives issued a statement welcoming the ruling. They noted, “The facts and timeline of this case have long been clear, and we welcome the jury’s decision to dismiss these claims as untimely. We remain committed to working with OpenAI to advance and scale AI for people and organizations around the world.”
As the legal battle among tech leaders continues, there’s a growing emphasis on the necessity for individuals and organizations to manage how AI impacts their lives and communities.
