OpenAI jury begins deliberations in Musk lawsuit

Nine California jurors are deliberating over the future of OpenAI, an artificial intelligence lab. The trial, which stems from a lawsuit filed by Elon Musk in 2024, centers on fairly narrow legal questions:

• Breach of charitable trust: Whether OpenAI and co-founders Sam Altman and Greg Brockman violated an agreement with Musk to use his donations for specific, charitable purposes.
• Unjust enrichment: Whether the defendants used Musk’s donations to enrich themselves through OpenAI’s for-profit arm instead of using them for charitable purposes.
• Aiding and abetting breach of charitable trust: Whether Microsoft, which made a $10 billion investment in OpenAI in 2023, knew of Musk’s donation conditions and played a significant role in causing him harm.

OpenAI’s defense relies on arguments regarding the statute of limitations, arguing that any harms to Musk occurred before the legal deadlines of August 5, 2021, for the first count; August 5, 2022, for the second count; and November 14, 2021, for the third count. OpenAI also argues Musk caused an unreasonable delay by waiting until 2024 to file his lawsuit, and invokes the doctrine of unclean hands, asserting that Musk’s own conduct was unconscionable. OpenAI’s lead attorney, Bill Savitt, told the jury that “Mr. Musk abandoned OpenAI for dead in 2018.” To counter the claims, a forensic accountant testified that all of Musk’s donations—which ended when his last donations took place in 2020—were used by OpenAI well before August 5, 2021. Additionally, OpenAI asserts that its for-profit affiliate has generated nearly $200 billion in equity value to support the non-profit foundation.

The trial has explored events ranging from the 2018 breakup of co-founders including Altman, Greg Brockman, and Ilya Sutskever, to Altman’s 2023 firing and rehiring. Plaintiffs argue that OpenAI’s foundation was left essentially dormant, without full-time employees, and not in control of the for-profit arm. OpenAI executives maintain that the for-profit structure was necessary to develop artificial general intelligence (a hypothetical form of AI capable of performing any intellectual task a human can). They also argue that the non-profit board continues to control the for-profit entity, having instituted new governance controls following Altman’s 2023 firing for a lack of candor and subsequent rehiring.

Why it matters

The jury’s verdict could fundamentally alter OpenAI’s corporate structure, potentially ending its for-profit operations, though the exact consequences remain a subject of legal debate.