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Musk's OpenAI Lawsuit Fails on Technicality

MIT Technology Review AI •
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A California jury unanimously advised that Elon Musk sued OpenAI too late, barring his claims via statutes of limitations. U.S. District Judge Yvonne Gonzalez Rogers accepted the advisory verdict immediately. Musk, who donated $38 million to the nonprofit he co-founded, vowed to appeal, arguing the court avoided ruling on the merits. The decision hinges on when Musk discovered alleged breaches of the company's charitable mission.

Musk alleged founders Sam Altman and Greg Brockman breached a charitable trust by restructuring into a for-profit and enriching themselves. He sought to unwind the 2025 conversion to a public benefit corporation and remove the executives. OpenAI countered that Musk delayed, pointing to his 2017 proposal for a for-profit subsidiary and the 2019 creation of a capped-profit entity with a $1 billion Microsoft investment. Musk testified he only realized the mission was abandoned in 2022 during Microsoft's $10 billion deal talks.

The jury sided with OpenAI, finding Musk had reason to suspect misconduct before 2021. They did not assess if deception occurred. Courts often use procedural grounds like statutes of limitations to resolve cases cleanly. Musk intends to appeal to the Ninth Circuit, maintaining the ruling ignores the core allegations about OpenAI's transformation from its founding nonprofit ethos.