Jury rejects Musk lawsuit, sides with OpenAI in feud over AI future

A federal jury sided with OpenAI and its top executives on Monday in a feud with Elon Musk, who accused them of betraying a shared vision for it to guide artificial intelligence’s development as a nonprofit.

The nine-person jury unanimously found that Musk waited too long to file his lawsuit and missed the deadline for the statute of limitations.

Musk, the world’s richest man, was a co-founder of OpenAI, the company that launched in 2015 and went on to create ChatGPT. After investing $38 million in its first years, Musk accused OpenAI CEO Sam Altman and his top deputy of shifting into a moneymaking mode behind his back.

The jury served in an advisory role, but U.S. District Judge Yvonne Gonzalez Rogers accepted the verdict Monday as the court’s own and dismissed Musk’s claims.

“I think there is a substantial amount of evidence to support the jury’s findings,” Rogers said when she accepted the jury’s conclusion after about two hours of deliberation.

The trial that began on April 27 in Oakland shed light on the bitter falling-out between the two Silicon Valley titans and on the origins of OpenAI, now a company valued at $852 billion and on track to potentially pull off one of the largest initial public offerings in history.

“The jury wasted no time, taking 90 minutes to find that Elon Musk’s claims against OpenAI for breach of charitable trust and unjust enrichment were filed too late under the respective statute of limitations,” Edward Lee, a law professor at Santa Clara University, noted in his blog.

Microsoft, which is one of OpenAI’s biggest shareholders and customers, applauded the decision.

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

The high-profile, high-stakes showdown between two of the most powerful companies and leaders in technology was billed as a battle that could change the trajectory of AI.

There were weeks of testimony from the dueling entrepreneurs and other key players in OpenAI’s history, providing a rare inside look at the company, which evolved from a startup into one of the world’s most influential firms.

The trial revealed more than a decade’s worth of corporate documents, private message exchanges and even private journal entries, giving unprecedented insight into the sometimes chaotic inner workings of OpenAI.

Musk’s core claim was that the co-founders had manipulated him into donating millions of dollars and eventually turned OpenAI into a for-profit.

OpenAI lawyers argued that Musk was not only aware of the move but wanted full control of the for-profit. Lawyers argued that when Musk’s wish was denied, he went on to start his own company, xAI, which is scheduled to go public soon as part of SpaceX.

Musk had fallen out with his fellow co-founders and then, after OpenAI became arguably the most important company in AI, decided he was not happy with how the trailblazer was managed after he left.

Musk claimed Altman, the startup’s chief executive officer, and OpenAI President Greg Brockman “stole a charity” by exploiting his early support for an altruistic research project so that they could later get rich by turning into a regular for-profit company.

OpenAI and its leaders said Musk was suing them to gain a competitive advantage for his own startup, xAI.

“This is a huge win for Altman and OpenAI despite the scrapes and bruises on Altman’s persona and leadership as it removes a significant overhang on the company’s operations with this now viewed as a ‘nothing impact’ for OpenAI,” Dan Ives, technology analyst at Wedbush, wrote in an analyst note.

Musk was seeking more than $100 billion in damages — to be awarded to OpenAI’s nonprofit arm instead of to himself — as well as the removal of Altman and Brockman.

The case was seen as an existential threat to OpenAI. If the decision had gone the other way, it would have sparked a shakeup that would have destabilized the company just as it is working to ensure the U.S. takes the lead in AI and prepares for a public offering with a valuation approaching $1 trillion.

Bloomberg contributed to this article.