Elon Musk loses OpenAI lawsuit as jury rules he waited too long to file his claims

Elon Musk has suffered a significant legal defeat after a California jury unanimously rejected his $150 billion lawsuit against OpenAI and its chief executive Sam Altman, ruling that the case was filed outside the legal deadline.

The verdict

A nine-member advisory jury at the US District Court for the Northern District of California in Oakland found, in under two hours of deliberation, that Musk was beyond the statute of limitations when he launched his case in 2024.

Judge Yvonne Gonzalez Rogers said she agreed with the jury's findings and formally dismissed the case. "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 said.

The jury also found that Musk's allegations against Microsoft — a major OpenAI investor he accused of "aiding and abetting" a breach of charitable trust — were similarly barred by the statute of limitations.

The background

OpenAI was established in 2015 as a nonprofit aimed at creating advanced AI for the benefit of humanity. By 2017, the founders had concluded they needed a for-profit arm to raise capital and attract researchers. Musk wanted control but the others disagreed, and he left the board in 2018.

Musk donated $38 million of his own money to help the project get off the ground between 2015 and 2017. He filed suit in February 2024, alleging that Altman and OpenAI president Greg Brockman had broken their promise to keep the company a nonprofit and had enriched themselves in the process.

A decision in Musk's favour could have forced changes to OpenAI's business structure and derailed the company's plans to go public, expected later this year.

A procedural rather than substantive ruling

Whilst the verdict represents a clear loss for Musk, it was decided on procedural grounds rather than on the merits of his allegations.

Musk took to X to express his frustration, writing: "Regarding the OpenAI case, the judge & jury never actually ruled on the merits of the case, just on a calendar technicality.

"There is no question to anyone following the case in detail that Altman & Brockman did in fact enrich themselves by stealing from a charity. The only question is WHEN they did it!"

Musk warns of a dangerous precedent

Speaking at Forbes' Innovation 250 celebration dinner in Palo Alto, Musk also raised broader concerns about the implications of the ruling. "I think this is a dangerous precedent to set. It means if somebody can take a nonprofit and convert it to a for-profit when it is successful, that undermines all charitable giving in America," he said.

Plans to appeal

Musk's lead attorney, Marc Toberoff, confirmed at a press conference following the verdict that they intend to appeal. "This at its core is a travesty, and but for Musk, they get away with it and they shouldn't," Toberoff said.

OpenAI's response

OpenAI's attorney William Savitt welcomed the outcome. "The finding of the jury confirms that what this lawsuit was was a hypocritical attempt to sabotage a competitor," he said.

"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."