OpenAI Inc. and Microsoft are set to face a jury trial this spring after a federal judge denied their attempts to dismiss Elon Musk’s lawsuit. The lawsuit accuses OpenAI of straying from its original nonprofit mission, despite accepting billions in funding. According to a report from Bloomberg News, U.S. District Judge Yvonne Gonzalez Rogers ruled that OpenAI and Microsoft failed to demonstrate that Musk’s claims should be dismissed. Musk alleges that OpenAI misled him about its charitable purpose, claiming that he had attached specific terms to its funding, including remaining open source and nonprofit.
The judge also rejected OpenAI’s argument that Musk’s use of an intermediary to donate $38 million in seed money stripped him of legal standing. Judge Gonzalez Rogers stated that this would significantly reduce the enforcement of charitable trusts, contrary to modern trends. Musk’s fraud allegations were also upheld, with internal OpenAI communications from 2017 revealing conflicting statements about the organization’s nonprofit status. Co-founder Greg Brockman initially expressed a desire to maintain the nonprofit structure, but later indicated a potential shift to a b-corp structure in a private note.
Musk’s legal team, led by Marc Toberoff, emphasized the evidence that OpenAI’s leadership made false assurances to Musk about its charitable mission for personal gain. OpenAI, on the other hand, maintains that Musk’s lawsuit is baseless and part of a pattern of harassment. The AI startup stated that they are looking forward to the upcoming trial and remain focused on empowering the OpenAI Foundation.
The case will now proceed to trial, where further details about the allegations against OpenAI and Microsoft will be examined. The outcome of the trial could have significant implications for the future of nonprofit organizations and the accountability of organizations that receive substantial funding. Stay tuned for updates on this developing legal battle between Elon Musk and OpenAI.