Federal Court Rejects Elon Musk’s Claims Against OpenAI, Saying he Filed his Lawsuit Too Late

Oakland: A federal court on Monday dismissed claims filed by Elon Musk against OpenAI and its top executives, who accused them of betraying a shared vision to remain a nonprofit organization dedicated to guiding the development of artificial intelligence for the good of humanity.

Musk, the richest man in the world, was a co-founder of OpenAI, which was founded in 2015 and created ChatGPT. After investing $38 million in its early years, Musk accused OpenAI CEO Sam Altman and his top lieutenant of switching to money-making mode behind his back.

The nine-person jury found that Musk waited too long to sue and missed the statute of limitations. The jury had deliberated for only two hours.

The jury acted as an advisor, but Judge Yvonne Gonzalez Rogers on Monday accepted the verdict as the court’s own decision and rejected Musk’s claims.

The three-week trial in Oakland, California, shed light on the bitter dispute between two Silicon Valley giants and the beginnings of OpenAI, which is now valued at $852 billion and is potentially heading for one of the biggest IPOs in history.

Altman and OpenAI claimed that no promises were made that OpenAI would remain a nonprofit organization indefinitely. In fact, they argued that Musk knew this and filed the lawsuit because he could not have unilateral control over the fast-growing artificial intelligence developer.

Musk was seeking compensation for the selfless efforts of OpenAI’s philanthropic arm, as well as compensation for Altman’s removal from the OpenAI board. Musk’s decision to stop funding the company contributed to a bitter split between the former allies. Musk said OpenAI’s board responded to deceptive behavior it discovered when it fired Altman as CEO in 2023 and reinstated him days later.

Musk did not immediately respond to a request for comment.

The three-week trial saw testimony from Musk, Altman and his top lieutenant Greg Brockman, as well as Microsoft CEO Satya Nadella and many others in the tech giants’ orbit. In his first three days on the stand, Musk basically told jurors: “I think they’re going to try to make this case very complicated… very complicated, but it’s actually very simple,” Musk said. “So it’s not right to steal a charity.”

In addition to the “breach of charitable trust,” Musk’s lawsuit alleged that Altman and Brockman unjustly enriched themselves as the ChatGPT maker’s valuation soared. Brockman revealed during the hearing that his stake in OpenAI was worth approximately $30 billion.

OpenAI has dismissed Musk’s claims as a baseless case of sour grapes aimed at hindering its rapid growth and bolstering its own xAI, which Musk is launching as a rival in 2023. During cross-examination, Musk was at times combative with OpenAI lawyer William Savitt.

“Your questions are not simple,” Musk said at one point. “They were actually designed to deceive me.”

Jurors also heard from witnesses, including former OpenAI board members Helen Toner and Tasha McCauley, who spoke about the decision to fire Altman in 2023. These witnesses were also expelled from the board when Altman returned to his post a few days later.

Altman and Musk competed to become CEO of OpenAI in its early years. In his testimony, Altman said he had concerns about Musk’s attempts to gain more control over OpenAI, which aims to safely create a better-than-human form of artificial intelligence, called artificial general intelligence.

“Part of the reason we started OpenAI is that we don’t think AGI can be under the control of any one person, no matter how good their intentions,” Altman said.

Towards the end of his testimony, Altman said he cared deeply for Musk before things went south.

“I felt like he abandoned us, that he didn’t follow through on his promises, that he put the company in a very difficult position, that he jeopardized the mission, that he didn’t really care about the things that I thought he cared about,” Altman said. “It was extremely painful for me that someone I respected so much would not acknowledge this and continue to publicly attack us.”