Elon Musk’s Legal Battle with OpenAI Cleared to Proceed to Jury Trial
Elon Musk has recently achieved a significant milestone in his ongoing legal dispute with OpenAI, as a U.S. federal judge has ruled that his lawsuit against the company’s transition to a for-profit structure can move forward to a jury trial.
U.S. District Judge Yvonne Gonzalez Rogers stated during a recent hearing that there is substantial evidence to suggest that OpenAI’s leadership had initially promised to maintain a nonprofit status focused on serving the public good. Rather than making a definitive decision herself, Rogers determined that the disputed facts warrant consideration by a jury, paving the way for a trial scheduled to take place in March.
Musk, who was a co-founder of OpenAI in 2015 but departed from the organization in 2018, alleges that OpenAI deviated from its original mission by converting into a for-profit entity and forming lucrative commercial partnerships, notably with tech giant Microsoft. Musk asserts that these actions contradicted the assurances that persuaded him to contribute approximately $38 million, which constituted around 60% of OpenAI’s initial funding, in addition to providing strategic guidance and credibility.
The lawsuit names OpenAI, CEO Sam Altman, president Greg Brockman, and Microsoft as defendants. Musk is seeking unspecified financial damages linked to what he describes as OpenAI’s “unlawfully acquired profits.” His lead trial attorney, Steven Molo, expressed confidence in presenting all the evidence of the defendants’ alleged misconduct to the jury.
Conversely, OpenAI vehemently denies the accusations. In a post-hearing statement, the company asserted that Musk’s lawsuit is unfounded and represents a continuation of his pattern of harassment, emphasizing their readiness to prove this during the trial. OpenAI has also contended that Musk delayed in bringing forth his claims, an issue that will be deliberated by the jury.
This legal saga adds another layer to the escalating public feud between Musk and OpenAI as the competition in generative AI intensifies. Musk currently heads xAI, the entity behind the Grok chatbot, which competes directly with OpenAI’s ChatGPT. Last year, Musk’s standing in the AI sector was highlighted when he ranked second in Time magazine’s annual TIME100 list of the most influential figures in artificial intelligence, trailing Altman and Nvidia’s Jensen Huang. Recently, xAI disclosed that it had secured a substantial $20 billion to expedite the advancement of its AI models and infrastructure.
It is noteworthy that Judge Gonzalez Rogers, who presided over Epic Games’ high-profile antitrust lawsuit against Apple, is the same federal judge overseeing Musk’s claims against OpenAI, underscoring the importance of her decision to permit the case to proceed to a jury trial. In a separate legal development, xAI and X, entities owned by Musk, are also embroiled in litigation against OpenAI and Apple concerning alleged antitrust violations related to App Store policies.
As the trial date draws near, the outcome of this legal showdown could have sweeping ramifications not only for OpenAI’s organizational structure but also for how mission-oriented tech entities navigate the delicate balance between nonprofit principles and expansive commercial aspirations.