After two hours of deliberation, a federal jury in Oakland on Monday ruled in favor of Sam Altman, CEO of OpenAI, effectively closing the latest chapter of a bitter dispute between formerly close associates turned tech rivals. The 2024 lawsuit filed by Elon Musk alleged that OpenAI’s leaders breached charitable trust obligations and unjustly enriched themselves; the jury found those claims unsupported by the evidence.
Key points of the decision
- The jury determined that Sam Altman and co-founder Greg Brockman were not liable for the allegations Musk’s lawyers brought against them. The judge and jury cited insufficient evidence.
- Judge Gonzalez Rogers dismissed Musk’s remaining claims for "lack of evidence," and the jury found some of Musk’s demands to be time-barred.
- The court also dismissed claims against Microsoft; Musk had alleged that the software giant aided and encouraged OpenAI’s shift toward a profit-oriented structure.
- Judge Gonzalez Rogers wrote at the Oakland hearing: "The multi-billion dollar adventure ends for lack of evidence."
Background and parties involved
Elon Musk helped found OpenAI in 2015 and left its board in 2018. In 2024 he sued Sam Altman and OpenAI, asserting the organization violated its commitments to operate as a nonprofit and to develop artificial general intelligence for "the benefit of humanity," rather than for private enrichment.
Key assertions in the case included:
- Musk said he donated roughly $38 million to OpenAI under the understanding the funds would be used to develop AI for the benefit of humanity rather than to enrich individuals.
- OpenAI’s lawyers argued Musk’s donations were not constrained and that reorganizing into a structure that could attract investment was necessary to fund the expensive competition with Google DeepMind. They also presented evidence that Musk himself had previously proposed profit-oriented structures under certain conditions.
Musk’s theory that OpenAI and Microsoft engaged in an "open conspiracy" to convert OpenAI into a for-profit company was not accepted by the court.
The trial and testimony
Over several weeks of testimony, jurors heard from Sam Altman, Greg Brockman, Microsoft CEO Satya Nadella, and Elon Musk. After the verdict, lawyers for OpenAI and Microsoft left the courtroom in downtown Oakland exchanging handshakes and smiles. Judge Gonzalez Rogers, Musk’s lawyer Yassry Wolf, and an OpenAI spokesperson declined requests to comment.
Why the ruling matters
The verdict comes at an important moment for both Altman and Musk as their companies move toward potential public offerings. According to the reporting cited in the trial, OpenAI raised $122 billion in funding at a valuation above $850 billion. OpenAI, the maker of ChatGPT, is racing to advance AI models and expand consumer services while defending its leadership against competitors such as Anthropic in the enterprise AI market.
Meanwhile, Elon Musk is preparing investor talks ahead of a SpaceX IPO; the company has been valued at about $1.25 trillion in some reports. SpaceX filed confidentially for an IPO in April, and its prospectus could be made public soon.
The loss in court means Musk was unable to convince a jury that OpenAI’s leaders unlawfully stole or misused the nonprofit’s mission to enrich themselves. The ruling also reduces the specific legal exposure arising from the claims advanced in this case for OpenAI and Microsoft.
Consequences
While the immediate operational and market effects of the judgment will take time to play out, the legal victory removes a significant legal cloud from OpenAI and Sam Altman and allows both OpenAI and Microsoft to continue their strategic plans without the particular constraints alleged in Musk’s suit. Elon Musk and his companies, meanwhile, appear set to continue pursuing their own AI and market strategies independently.
