Jury rules against Musk in court battle against Sam Altman, OpenAI

After less than two hours of deliberations, a jury on Monday rejected Elon Musk’s claims against OpenAI CEO Sam Altman, ending a dramatic chapter in the bitter rivalry between the two tech billionaires, who were once close friends.

The court, led by U.S. District Judge Yvonne Gonzalez Rogers, agreed with the advisory jury’s determination that Altman and OpenAI were not liable, and that “claims of breach of charitable trust and unjust enrichment are dismissed as untimely.” Gonzales Rogers said she was prepared to dismiss Musk’s claims “on the spot.”

The jury found that Musk’s claims were filed outside of the statute of limitations, deciding that Musk had three years to sue and did not file on time.

Musk’s lawyer, Steven Molo, reserved his client’s right to appeal directly to the judge, but the judge expressed her skepticism.

“There’s a substantial amount of evidence to support the jury’s finding,” she said in wrapping up the three-week trial in Oakland, California.

Outside the courthouse, another of Musk’s lawyers, Marc Toberoff, told CNBC the case, “at its core, is about preserving charities from this kind of exploitation. If they get away with it, they shouldn’t.”

Musk sued Altman and OpenAI in 2024, alleging they violated their commitment to keep the artificial intelligence lab as a nonprofit. Musk helped start OpenAI in 2015, but left the board three years later.

Microsoft, which invested in OpenAI as early as 2019, was also named as a defendant in the suit, with Musk claiming the software giant aided and abetted the AI startup in its alleged breach of charitable trust. The court said the claim against Microsoft was also dismissed.

“It’s not a technical decision, it’s a substantive one,” the lead attorney for OpenAI, William Savitt, told reporters. “It says: You brought your claims too late, and you did it because you were sitting on them to use them as a weapon of a competitor who can’t compete in the marketplace. And so we’re delighted to get it.” 

Counsel for OpenAI and Microsoft celebrated with hugs and back slaps as they departed the courtroom in downtown Oakland.

“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,” an attorney for Microsoft said in a statement. “We remain committed to our work with OpenAI to advance and scale AI for people and organizations around the world.”

Musk’s team wanted the court to force OpenAI and Microsoft to give up as much as $134 billion in “ill-gotten gains,” to remove Altman and OpenAI President Greg Brockman from leadership, and to unwind the company’s 2025 restructuring that enabled the growth of its for-profit arm. Musk said any money should be returned to “the OpenAI charity” rather than to him personally. 

At the heart of the case was Musk’s claim that OpenAI executives “stole a charity,” with Altman and Brockman abandoning OpenAI’s founding charitable mission in pursuit of their own personal profit. Musk testified he gave roughly $38 million to OpenAI on the understanding it would develop AI “for the benefit of humanity,” not enrich any one person.

Lawyers for OpenAI argued that Musk’s donations were not restricted in any way, and that restructuring the business was the only way to compete in a costly race against Google DeepMind. They also showed Musk had floated a for-profit structure on the condition that he retain control, even pushing the company at one point to fold into Tesla.

In 2023, Musk started his own competing AI lab, xAI, which is now part of SpaceX. OpenAI’s lawyers portrayed the lawsuit as Musk’s attempt to kneecap a rival after he failed to gain control of it.

During the weeks of testimony, jurors heard from Altman, Brockman, Microsoft CEO Satya Nadella, and Musk himself.

The verdict comes at a critical time for Altman and Musk, as the two tech magnates push their respective companies toward the public markets in what are expected to be record offerings.

In late March, OpenAI raised $122 billion at a valuation of over $850 billion. The ChatGPT maker is racing to advance its models and continue building out consumer services while also trying to keep pace with Anthropic in the enterprise AI market.

Musk, meanwhile, is expected to start meeting with investors very soon ahead of an IPO for SpaceX, which was valued at $1.25 trillion after merging with xAI in February. SpaceX confidentially filed for an IPO in April, and could make its prospectus public this week.

—CNBC’s Ashley Capoot and Kate Rooney contributed to this report.