Federal court rejects Elon Musk’s claims against OpenAI, saying he filed his lawsuit too late

OAKLAND, Calif. (AP) — A federal court on Monday dismissed claims filed against OpenAI and its top executives by Elon Musk, who accused them of betraying a shared vision for it to remain a nonprofit dedicated to guiding artificial intelligence’s development for the good of humanity.

The nine-person jury found Musk waited too long to file his lawsuit and missed a statutory deadline. After a three-week trial, the jury deliberated less than two hours.

Musk, the world’s richest man, was a co-founder of OpenAI, which launched in 2015 and went on to create ChatGPT. After investing $38 million in its first years, Musk accused OpenAI CEO Sam Altman and his top deputy of shifting into a moneymaking mode behind his back.

The jury served in an advisory role, but Judge Yvonne Gonzalez Rogers accepted the verdict Monday as the court’s own and dismissed Musk’s claims.

Musk posted on his social media platform X that he would file an appeal. He said the judge and jury never weighed in on the merits of the case, just “a calendar technicality.”

“There is no question to anyone following the case in detail that Altman & Brockman did in fact enrich themselves by stealing a charity. The only question is WHEN they did it!” he wrote.

Musk’s lawyer, Steven Molo, said Musk’s feud with OpenAI was far from resolved. He compared Monday’s verdict to moments in U.S. history like the Siege of Charleston and the Battle of Bunker Hill which were “major losses for Americans, but who won the war?”

OpenAI argued it came down to a business rivalry

The trial in Oakland, California shed light on the bitter falling-out between the two Silicon Valley titans and the beginnings of OpenAI, now a company valued at $852 billion and moving toward potentially one of the largest initial public offerings in history.

Altman and OpenAI claimed there was never a promise to keep OpenAI a nonprofit forever. In fact, they argued, Musk knew this and filed his lawsuit because he couldn’t have unilateral control over the fast-growing AI developer.

OpenAI argued the lawsuit aimed to undercut the company’s rapid growth and bolster Musk’s xAI, which he launched in 2023 as a competitor.

Outside court Monday, OpenAI lawyer William Savitt told reporters that jurors determined the lawsuit was an “after-the-fact contrivance” that amounted to Musk trying to sabotage a competitor and ”to overcome a long history of very bad predictions about what OpenAI has been and will become.”

Microsoft, an OpenAI investor and a co-defendant in Musk’s lawsuit, said it welcomed the decision and remains “committed to our work with OpenAI to advance and scale AI for people and organizations around the world.”

Musk was seeking damages to be paid to the altruistic efforts of OpenAI’s charitable arm as well as Altman’s ouster from OpenAI’s board. Musk’s decision to stop funding the company contributed to the rift between the former allies. Musk says he was responding to deceptive conduct that OpenAI’s board picked up on when it fired Altman as CEO in 2023 before he got his job back days later.

The trial saw testimony from Musk, Altman and his top lieutenant Greg Brockman, along with Microsoft CEO Satya Nadella and a slew of others in the tech titans’ orbit.

Musk told jurors on his first of three days on the stand that, fundamentally, “I think they’re going to try to make this lawsuit … very complicated, but it’s actually very simple,” Musk said. “Which is that it’s not OK to steal a charity.”

Musk’s lawsuit claimed that, in addition to “breach of charitable trust,” Altman and Brockman unjustly enriched themselves from the windfall as the ChatGPT maker soared in valuation. Brockman revealed during the trial that his stake in OpenAI is worth about $30 billion.

The trial detailed a clash between tech titans

Altman and Musk both vied to be OpenAI’s CEO in its early years. In his testimony, Altman said he had concerns about Musk’s attempts to gain more control over OpenAI, which was aiming to safely build a better-than-human form of AI called artificial general intelligence.

“Part of the reason we started OpenAI is we didn’t think AGI could be under the control of any one person, no matter how good their intents are,” Altman said.

The trial also shed light on Altman’s removal from the OpenAI board in 2023, before he returned to his role a few days later. Several witnesses including two ex-board members, Helen Toner and Tasha McCauley, said there were concerns about Altman’s truthfulness.

Near the end of his testimony, Altman said that before things turned sour, he had thought very highly of Musk.

“I felt like he had abandoned us, not come through on his promises, put the company in a very difficult place, jeopardized the mission, didn’t really care about the things I thought he cared about,” Altman said. “It’s been an extremely painful thing for me … to have someone that I respected so much not acknowledge that and continue to publicly attack us.”