OAKLAND, Calif. - A jury in California took less than two hours to decide that Elon Musk waited too long to file a lawsuit against his one-time business partner Sam Altman over the direction he's steered the artificial intelligence company OpenAI since the two had a falling out nearly a decade ago.
In a unanimous decision, the nine-member advisory jury said Musk was beyond the statute of limitations when he launched his case in 2024. Judge Yvonne Gonzalez Rogers, of the U.S. District Court for the Northern District of California, agreed, tossing the case out.
"I've always said I would accept the jury's verdict," Gonzalez Rogers said after issuing her decision. "I think there's a substantial amount of evidence to support the jury's finding."
The decision brings a swift end to a three-week trial that laid bare the fears and ambitions that led two of Silicon Valley's biggest personalities to team up 11 years ago to launch OpenAI, the maker of ChatGPT, and then to part ways after a dispute over how to run it.
In determining that the suit was filed too late, the jury sidestepped questions at the heart of Musk's case accusing Altman and co-founder Greg Brockman of committing a "breach of charitable trust" by allegedly jettisoning OpenAI's founding mission, and then profiting from the decision — claims they disputed in court.
OpenAI was established in 2015 as a nonprofit aiming to create advanced AI for the benefit of humanity — a mission born out of a shared concern among the founders about the potentially negative consequences of AI being controlled by any one person or for-profit company.
But by 2017, the founders were convinced they needed to set up a for-profit arm of OpenAI to raise money and attract researchers in order to be competitive. Musk wanted control, but the others disagreed, and he left the board in 2018.
In court, he claimed that Altman "stole a charity" by creating a for-profit entity that became, in his words, "the main thing" at OpenAI.
Lawyers for OpenAI argued that Musk in fact supported the creation of a for-profit subsidiary with the goal of attracting big investments. They argued that, rather than being motivated by a commitment to OpenAI's original mission, Musk was unhappy that it did so well without him. A year and a half before suing, Musk launched xAI, a for-profit AI company, and OpenAI's lawyers said his lawsuit was an attempt to hurt a competitor.
Musk also sued Microsoft for aiding OpenAI through investments totaling $13 billion between 2019 and 2023. That claim was also dismissed.
Musk's lead lawyer had argued that Altman and his colleagues treated the nonprofit like a "shell" after the founding of the for-profit subsidiary in 2019, shifting employees and intellectual property into the for-profit.
After OpenAI made a $10 billion deal with Microsoft in 2023, Musk attorney Steven Molo argued last week in court, the company abandoned its commitment to open sourcing and safety, and instead "enriched investors and insiders."
In addition to helping found OpenAI, Musk was an early source of funds, providing $38 million over the course of several years to help get it off the ground. But Sarah Eddy, an attorney for OpenAI's defendants, argued in closing statements last week that that money came with no strings attached, meaning Musk "does not have a charitable trust to enforce."
Whether OpenAI breached a charitable trust or not, the jury's decision indicated that they believed that Musk took note of the actions that he claims were a breach of trust more than three years before filing his suit.
If the jury sided with Musk — and the judge agreed with them — OpenAI and Microsoft could have been forced to "disgorge" into OpenAI's nonprofit foundation up to $150 billion in damages. Musk also sought the dismissal of Altman and Brockman from their posts, as well as the dismantling of the for-profit entity.
The verdict interrupted a hearing on possible remedies. But at 10:23 am Pacific time, Edwin Cuenco, the designated courtroom deputy, handed Judge Gonzalez Rogers a note, after which she declared: "We have a verdict." The jury had started deliberations at 8:30 am.
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