MIT Technology Review is reporting that a jury in the case of Musk v. Altman delivered a unanimous advisory verdict against Elon Musk on Monday, finding his claims were barred by the applicable statutes of limitations. U.S. District Judge Yvonne Gonzalez Rogers immediately accepted the verdict. Musk announced on X that he will appeal the decision, stating the judge and jury ruled on a "calendar technicality" rather than the merits of the case.
OpenAI was cofounded by Musk and other researchers in 2015 as a nonprofit with a mission to develop artificial intelligence for humanity's benefit, free from financial constraints. Musk donated $38 million to the company, allegedly based on a promise from OpenAI CEO Sam Altman and president Greg Brockman to maintain its nonprofit status. Musk brought two claims against OpenAI, arguing Altman and Brockman breached a charitable trust by creating a for-profit subsidiary and unjustly enriched themselves at his expense. He sought to unwind OpenAI's 2025 restructuring and remove Altman and Brockman from their roles.
OpenAI argued Musk waited too long to sue, citing a three-year statute of limitations for the breach of charitable trust claim and two years for unjust enrichment. This meant Musk should have discovered the alleged breach of trust no later than 2021 and unjust enrichment no later than 2022. While Musk testified he discovered the alleged abandonment of the nonprofit mission in 2022, OpenAI contended he had reason to know much earlier.
The trial highlighted several key dates. In 2017, Musk himself proposed a for-profit subsidiary and a merger with Tesla, which OpenAI used to suggest he knew of plans to pivot. Musk countered he was not opposed to a small for-profit if it didn't dominate the nonprofit. In 2019, OpenAI created a for-profit subsidiary with capped profits and secured a $1 billion investment from Microsoft. Musk testified he did not believe this violated the nonprofit's mission at the time. In 2020, Microsoft secured an exclusive license to OpenAI's GPT-3 model, prompting Musk to post on X that OpenAI was "essentially captured by Microsoft," though he said Altman reassured him the company was staying on mission.
Musk testified that it was only in 2022, when Microsoft was preparing to invest $10 billion in OpenAI, that he realized the nonprofit mission had been abandoned. He texted Altman, calling the $20 billion valuation a "bait and switch." The jury ultimately sided with OpenAI, finding Musk had reason to believe he was being misled by Altman and Brockman before 2021. The jury did not address the merits of whether he was actually misled. Musk plans to appeal the decision to the Ninth Circuit Court of Appeals.
Full Article: Here’s why Elon Musk lost his suit against OpenAI