Elon Musk loses lawsuit he filed against OpenAI

Elon Musk’s courtroom challenge to OpenAI ended in defeat after a US jury found the artificial intelligence company not liable for claims that it had abandoned its founding mission of serving humanity rather than profit.

Delivering a unanimous verdict in federal court in Oakland, California, jurors concluded that Mr Musk filed the case too late. Their deliberations lasted for less than two hours.

The closely watched trial had been framed as a pivotal test for OpenAI and for the broader AI industry, raising larger questions about how the technology should be governed and who ultimately stands to gain from it.

After the decision, Mr Musk’s lawyer said he was preserving the option to appeal. But the judge indicated that could prove difficult, noting that the question of whether the statute of limitations had expired before Mr Musk sued was a factual matter.

Elon Musk described the OpenAI defendants’ conduct as ‘stealing a charity’

In his 2024 lawsuit, Mr Musk alleged that OpenAI, chief executive ⁠Sam Altman and president Greg Brockman misled him into contributing $38 million, then later moved ahead without him by linking a for-profit arm to the original nonprofit and taking in tens of billions of dollars from Microsoft and other investors.

Mr Musk described the OpenAI defendants’ conduct as “stealing a charity”.

OpenAI was established in 2015 by Mr Altman, Mr Musk and several others. Mr Musk departed from its board in 2018, and OpenAI created a for-profit business the following year.

OpenAI argued in response that Mr Musk, not the company, had been motivated by financial opportunity, and that he waited too long to accuse it of violating its founding agreement to develop safe artificial intelligence for the benefit of humanity.

“Mr Musk may have the Midas touch in some areas, but not in AI,” William Savitt, a lawyer for OpenAI, told jurors in his closing argument.

The verdict came after 11 days of testimony and legal arguments in which both Mr ⁠Musk’s and Mr Altman’s credibility was repeatedly challenged.

Once the verdict was read, OpenAI’s lawyers embraced in the courtroom.

Microsoft was also accused of aiding and abetting. In a statement, ‌a Microsoft spokesperson said, “the facts and the timeline in this case have long been clear and we welcome the jury’s decision ⁠to dismiss these ‌claims as untimely.”

People turn to AI for a vast range of uses, including education, facial recognition, financial advice, legal research, medical diagnoses and the creation of harmful deep-fakes.

At the same time, many remain deeply wary of the technology, fearing it could cost workers their jobs.

Throughout the case, both camps accused the other of putting money ahead of the public good.

In his closing argument, Mr Musk’s lawyer Steven Molo urged jurors to focus on testimony from several ⁠witnesses who questioned Mr Altman’s honesty or called him a liar, while noting that Mr Altman did not give an unqualified yes when asked at trial whether he was completely trustworthy.

“Sam Altman’s ⁠credibility is directly at issue,” Mr Molo said. “If you don’t believe him, they cannot win.”

Mr Musk alleged that OpenAI had improperly sought to enrich investors and insiders at the expense of the nonprofit, while failing to put AI safety first. He also argued that Microsoft had long understood that OpenAI was driven more by money than altruism.

OpenAI is competing with AI rivals including Anthropic and xAI, and is making preparations for a possible initial public offering that could value the company at $1 trillion.

Microsoft has invested more than $100 billion in its partnership with OpenAI, according to testimony from a Microsoft executive.

Mr Musk’s xAI now sits within his space and rocket company SpaceX, which is preparing an IPO that could ‌surpass OpenAI’s in size.