Jury rejects Elon Musk’s lawsuit, sides with OpenAI in bitter feud over AI future

A federal jury on Monday sided with OpenAI and its top executives in a feud with Elon Musk, who accused them of betraying a shared vision of guiding the development of artificial intelligence as a nonprofit.

The nine-person jury unanimously ruled that Musk waited too long to file suit and missed the statute of limitations.

Musk, the world’s richest man, was a co-founder of OpenAI, the company that launched in 2015 and later created ChatGPT. After investing $38 million in his first years in business, Musk accused OpenAI CEO Sam Altman and his top deputy of moving into a profit-making mode behind his back.

The jury played an advisory role, but Judge Yvonne Gonzalez Rogers on Monday accepted the verdict as that of the court and rejected Musk’s allegations.

“I believe there is a substantial amount of evidence to support the jury’s findings,” U.S. District Judge Yvonne Gonzalez Rogers said when she accepted the jury’s finding after about two hours of deliberation.

The trial which began on April 27 in Oakland shed light on the bitter falling out between the two titans of Silicon Valley and the origins of OpenAI, now valued at $852 billion and on track to potentially achieve one of the largest IPOs in history.

“The jury wasted no time, taking 90 minutes to conclude that Elon Musk’s claims against OpenAI for charitable breach of trust and unjust enrichment were filed too late under the respective statutes of limitations,” noted Edward Lee, a law professor at Santa Clara University, in his blog.

The high-profile, high-stakes showdown between two of the most powerful companies and technology leaders has been touted as a battle that could change the trajectory of AI.

There have been weeks of testimony from dueling entrepreneurs and other key players in OpenAI’s story, offering a rare glimpse into the company, which has evolved from a start-up to one of the most influential companies in the world.

The trial revealed more than a decade of corporate documents, private message exchanges and even private journal entries, providing unprecedented insight into the sometimes chaotic inner workings of OpenAI.

Musk’s main dissatisfaction was that the co-founders manipulated him into donating millions of dollars and ultimately turned OpenAI into a for-profit company.

OpenAI’s lawyers argued that Musk not only knew about the move, but wanted to have full control of the for-profit company. The lawyers argued that when Musk’s wish was denied, he then started his own company, xAI, which is expected to soon go public as part of SpaceX.

Musk had fallen out with his fellow co-founders, and then, after OpenAI became arguably the most important company in AI, he decided he wasn’t happy with how the pioneer had been managed after his departure.

Musk claimed that Altman, the startup’s CEO, and OpenAI Chairman Greg Brockman “robbed a charity” by exploiting his early support for an altruistic research project so they could later enrich themselves by transforming themselves into a regular for-profit company.

OpenAI and its executives said Musk was suing them to gain a competitive advantage for his own startup, xAI.

“This is a huge win for Altman and OpenAI despite the scrapes and bruises on Altman’s personality and leadership, as it removes a significant burden on the company’s operations, with this now considered ‘zero impact’ for OpenAI,” Wedbush technology analyst Dan Ives wrote in an analyst note.

Musk was seeking more than $100 billion in damages – to be awarded to OpenAI’s non-profit arm rather than himself – as well as the firing of Altman and Brockman.

The case was seen as an existential threat to OpenAI. Had the decision gone the other way, it would have triggered a shakeup that would have destabilized the company just as it is working to ensure the U.S. takes the lead in AI and preparing for a public offering with a valuation approaching $1 trillion.

Bloomberg contributed to this article.