Musk loses case against OpenAI

(CNN) — Elon Musk waited too long to sue OpenAI and its leaders, a jury in Oakland, California, decided on Monday. A lawsuit he filed was barred by the statute of limitations, the jury found after about 90 minutes of deliberation.

Their verdict was advisory, but Judge Yvonne Gonzalez Rogers said she agrees with the jury.

“The court now confirms the prior indication that it would accept the jury’s findings as its own,” Rogers said.

“I think that there’s a substantial amount of evidence to support the jury’s finding, which is why I was prepared to dismiss on the spot,” she added in court on Monday.

Musk helped cofound and fund OpenAI, giving $38 million in its early years. He sued CEO Sam Altman, company president Greg Brockman, and OpenAI in February 2024, alleging that they “stole a charity” and unjustly enriched themselves when they shifted to a structure that includes a for-profit arm.

“I was a fool,” Musk told the court earlier this month. “I gave them free funding to create a startup.”

Musk’s case threatened to derail the ChatGPT maker as it plans what could be a blockbuster IPO. The jury’s decision is a win for OpenAI and its founders, Altman and Brockman.

OpenAI’s attorneys argued the company’s mission hasn’t changed, that it’s still run by a non-profit foundation board, and that Musk waited to file the suit until he founded his own competing artificial intelligence company, xAI. The jury agreed, finding that Musk was aware of the behavior discussed in the lawsuit as early as 2021.

“The finding of the jury confirms that what this lawsuit was was a hypocritical attempt to sabotage a competitor,” William Savitt, OpenAI’s attorney, said on Monday after the verdict. “The fact is that OpenAI is a not-for-profit, mission-driven organization that has been and will continue to be faithful to that mission.”

OpenAI’s attorneys also argued during the trial that Musk’s donations did not come with a commitment to stay a nonprofit and that the Tesla CEO at various points pushed for OpenAI to create a for-profit entity to compete with Google. They also said Musk tried to gain control of the for-profit entity and left the company when he failed to do so.

Musk asked the court to force OpenAI to pay back more than $130 billion to OpenAI’s nonprofit arm, remove Altman and Brockman from their leadership roles and unwind the corporate restructuring that turned OpenAI into one of the world’s most valuable tech companies.

OpenAI cofounder Ilya Sutskever and Shivon Zilis, an executive at Musk’s companies, former OpenAI board member and mother of four of Musk’s children, were among the high-profile witnesses who testified.

Hundreds of pages worth of private emails, text messages and internal meeting notes were submitted as evidence, including Brockman’s personal diaries, and texts between Musk and Meta CEO Mark Zuckerberg discussing possibly trying to buy OpenAI together.

The trial revealed Google’s role in OpenAI’s founding as the AI lab sought to surpass what was then considered the leader in the nascent AI race. It also revealed the many fundraising options OpenAI considered to support its computing and infrastructure needs, including cryptocurrency.

Musk’s romantic relationship was also in the spotlight, as Zilis’ testimony revealed the two had been romantically connected far longer than was previously known. Details about how she served as a conduit to Musk about OpenAI after his departure were also revealed in court.

Microsoft was also named as a codefendant for “aiding and abetting” the claims through its investments in OpenAI. Musk left OpenAI in 2018 and started his own AI company, xAI, in 2023.

“The facts and the timeline in this case have long been clear, and we welcome the jury’s decision to dismiss these claims as untimely,” a Microsoft spokesperson said in a statement after the jury’s decision on Monday.

Representatives for Musk did not immediately respond to a request for comment. Musk’s lead attorney, Marc Toberoff, said at a press conference after the verdict that they plan to appeal.

“This at its core is a travesty, and but for Musk, they get away with it and they shouldn’t,” Toberoff said.

This story has been updated with additional information.

The-CNN-Wire
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