Elon Musk’s claim that he was mistreated by his OpenAI co-founders failed after nine California jurors returned a unanimous verdict that his lawsuits had been filed too late.
Musk accused Sam Altman, Greg Brockman, OpenAI, and Microsoft of “stealing a charity” by creating a for-profit affiliate of the frontier AI lab. Jurors, however, found that any harms that Musk may have suffered came before the deadline for filing his claims under the law.
While the trial delved deeply into the melodramatic history of OpenAI and featured testimony from leading figures in Silicon Valley, it ultimately turned on fairly narrow questions of the law. The trial focused on whether and when Altman and the other defendants had made and broken promises to Musk, but his case failed to convince jurors that he had a valid claim.
In particular, OpenAI had advanced a statute of limitations defense, which sought to prove that any harms Musk sought to litigate had taken place before 2021. (The specific date varied by the charge: before August 5, 2021, for the first count; August 5, 2022, for the second count; and November 14, 2021, for the third count.) Ultimately, the jury found that argument persuasive, which made for a short deliberation period.
“There was a substantial amount of evidence to support the jury’s finding, which is why I was prepared to dismiss on the spot,” Judge Yvonne Gonzalez Rogers said after the verdict was delivered.
The end of the case means that one major threat to OpenAI — a possible restructuring — is now off the table ahead of its reported IPO.
“It did not take [the jury] two hours to conclude … that Mr. Musk’s lawsuit is nothing more than an after-the-fact contrivance that bears no relationship to reality,” OpenAI’s lead attorney, Bill Savitt, said after the verdict. “They kicked it exactly where it belongs — just to the side. This lawsuit is a hypocritical attempt to sabotage a competitor.”
Microsoft, which Musk sued for aiding and abetting OpenAI’s alleged breach of charitable trust, welcomed the verdict. A spokesperson for the company said it “remained committed to our work with OpenAI to advance and scale AI for people and organizations around the world.”
The verdict came in the middle of a hearing to determine the potential damages to Musk if the verdict had gone the other way. While that discussion is moot for now, the judge appeared unconvinced by the analogy Musk’s lawyers drew between his charitable contributions and investments in a for-profit startup.
“Your analysis seems to be devoid of connection to the underlying facts,” she told Dr. C. Paul Wazzan, the expert who came up with Musk’s estimate of OpenAI and Microsoft’s wrongful gains at his expense — some $78.8 billion to $135 billion.
In a tweet after the ruling, Musk appeared to take the procedural grounds of the dismissal as a moral victory. “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!” Musk wrote. “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.”
Reached for comment by TechCrunch, Musk’s lead counsel, Marc Toberoff, said, “One word: Appeal.”
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