OpenAI Defeats Elon Musk in Court as Jury Rules Lawsuit Came Too Late
OAKLAND, Calif. — A federal jury on Monday ruled in favor of OpenAI, finding that Elon Musk waited too long to file his lawsuit accusing the ChatGPT maker and its top executives of betraying the company’s founding mission as a nonprofit. The verdict removes a major legal obstacle to what could be one of the largest initial public offerings in history.
The nine-person jury in Oakland, California, deliberated less than two hours after a three-week trial before delivering an advisory verdict that Judge Yvonne Gonzalez Rogers immediately adopted as the court’s own. The jury found that Musk’s claims against OpenAI, CEO Sam Altman, President Greg Brockman, and co-defendant Microsoft fell outside the three-year statute of limitations, as reported by AP News.
The Core Dispute
Musk, who co-founded OpenAI in 2015 as a nonprofit and contributed approximately $38 million in early funding, had accused Altman and Brockman of betraying a shared vision to keep the organization dedicated to guiding artificial intelligence development for humanity’s benefit. He alleged breach of charitable trust and unjust enrichment, seeking $134 billion in damages to be redistributed from OpenAI’s for-profit arm to its nonprofit, as well as Altman’s removal from the board.
OpenAI’s lead attorney, William Savitt, dismissed Musk’s claims as an “after-the-fact contrivance” aimed at undercutting a competitor. “Mr. Musk can tell his stories,” Savitt said after the verdict. “What the jury found today is just that: Stories, not facts.” He added that the decision was “not a technical decision; it’s a substantive one,” according to The Guardian.
The Statute of Limitations Defense
At the heart of the case was a narrow but decisive legal question: when did the alleged harms occur? OpenAI successfully argued that Musk was aware of the company’s plans to pursue a for-profit structure as early as 2017 — years before he filed his lawsuit in August 2024. The jury agreed, finding that any claims Musk may have had were filed too late under California law.
Judge Gonzalez Rogers told Musk’s lawyer after the verdict: “I think there’s a substantial amount of evidence to support the jury’s finding, which is why I was prepared to dismiss on the spot,” as TechCrunch reported.
Musk Vows to Appeal
Musk immediately announced plans to appeal to the Ninth Circuit Court of Appeals. On his social media platform X, he called Judge Rogers a “terrible activist Oakland judge” and claimed the verdict was based on “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,” Musk wrote. “The only question is WHEN they did it! I will be filing an appeal with the Ninth Circuit, because creating a precedent to loot charities is incredibly destructive to charitable giving in America.”
Musk’s lead counsel, Marc Toberoff, told TechCrunch in a single word: “Appeal.”
Trial Exposes Silicon Valley’s Inner Workings
While OpenAI won the legal battle, the trial laid bare unflattering details about both sides. Private emails, diary entries, and embarrassing text message exchanges became public evidence. Witnesses testified about concerns regarding Altman’s truthfulness, including two former OpenAI board members, Helen Toner and Tasha McCauley, who spoke about the circumstances surrounding Altman’s brief ouster in November 2023.
The trial featured testimony from some of tech’s biggest names — Musk, Altman, Brockman, and Microsoft CEO Satya Nadella all took the stand. The proceedings revealed the fractious history of OpenAI’s evolution from a nonprofit research lab into a for-profit juggernaut valued at $852 billion.
Broader Implications for AI Governance
The case has highlighted concerns about the concentration of AI development power in the hands of a few billionaires. As WIRED noted, the trial served as a reminder of how much the future of AI depends on personal rivalries among a small group of powerful tech figures.
Sarah Kreps, director of Cornell University’s Tech Policy Institute, said the trial “highlighted not just a dispute between Musk and Altman, but a broader disconnect between the people building these systems and many of the people increasingly expected to live and work alongside them.”
Columbia Law School professor Dorothy Lund described the situation as “a funny microcosm of this moment where we have this hugely important technology that’s being developed by for-profit corporations run by people like Musk and Altman and not as the part of some government-led initiative.”
What’s Next
The verdict clears a significant legal hurdle for OpenAI’s planned initial public offering, which could be among the largest in history given the company’s $852 billion valuation. Had Musk prevailed, the company could have faced forced restructuring.
However, the reputational damage from the trial’s revelations may have lasting effects. University of Richmond Law School professor Carl Tobias noted: “It’s a lot of dirty laundry that doesn’t look very appealing, I suppose, and so that may hurt their reputation and may have downstream effects on all kinds of things that you can’t even anticipate.”
This was Musk’s second major courtroom loss in less than two months, following a jury finding him liable for defrauding investors during his $44 billion acquisition of Twitter. The Ninth Circuit will now determine whether Musk’s appeal raises substantive questions about charitable trust law — or whether the verdict stands.
This article was compiled from reporting by AP News, The Guardian, TechCrunch, and WIRED.