Elon Musk has lost his high-profile lawsuit against OpenAI and its CEO Sam Altman, ending one of Silicon Valley’s most publicized legal battles…for now.
The New York Times reported that a jury unanimously ruled in favor of Musk, deciding that he had waited too long to sue OpenAI for abandoning its original nonprofit mission in pursuit of huge commercial profits.
The ruling is a major victory for OpenAI, as the maker of ChatGPT is eyeing an IPO that could reportedly value the company up to $1 trillion.
Elon Musk accuses OpenAI of ‘stealing charity’
Musk co-founded OpenAI with Altman and others in 2015 and retired from the company’s board in 2018.
In the lawsuit, first filed in 2024, Musk accused OpenAI executives of turning the organization from a public interest AI research institute into a profit-driven business backed by billions of dollars from Microsoft and other investors.
His lawyers argued that Altman and OpenAI President Greg Brockman created a for-profit organization that claimed to serve humanity, enriching insiders and effectively “stealing charity.”
During the trial, Musk was also asked whether he understood OpenAI’s initial plans to move into a for-profit structure. He said in court that he “didn’t read the fine print” in the 2017 OpenAI term sheet that discussed the move.
OpenAI rejected those claims throughout the trial, arguing that Musk himself had previously pursued aggressive commercialization before becoming a direct competitor through his own AI company, xAI.
Although the jury sided with OpenAI, they did not rule on whether the company had actually abandoned its founding mission. Instead, jurors decided that Musk had enough information years ago and should have filed the lawsuit sooner.
OpenAI’s multi-billion dollar trial became the focus
The case provided a public look into OpenAI’s transformation from a relatively unknown research organization to one of the world’s most valuable AI companies.
Jurors heard testimony that Microsoft spent more than $100 billion to partner with OpenAI and expand related infrastructure.
They also heard details about the wealth created by the rise of OpenAI. Mr. Brockman testified that his stock was worth nearly $30 billion, and former chief scientist Ilya Sutskeva said his holdings were worth about $7 billion.
OpenAI’s lawyers described Musk as a rival seeking to damage competitors after he launches xAI in 2023.
“The jury’s decision confirms that this case is a hypocritical attempt by hypocrites to thwart a competitor,” OpenAI attorney William Savitt told reporters after the verdict.
Musk says he will appeal
Musk reacted to the verdict against X, arguing that the jury only decided the case based on “calendar technicalities” rather than the substance of his claims.
“There is no question to anyone following this case closely that Altman and Brockman did in fact steal charity to line their own pockets,” Musk wrote.
Musk also confirmed plans to appeal the decision to the U.S. 9th Circuit Court of Appeals, which reviews federal lawsuits from California and other Western states.
Despite the verdict, the legal battle is far from over. Mr. Musk and xAI continue to pursue separate antitrust and trade secret claims against OpenAI and Microsoft. These include allegations that the partnership unfairly crowds out rivals and uses investor agreements to limit support for competing AI startups.
