A federal jury in Oakland, California, on Monday rejected Elon Musk’s claims against OpenAI, ruling that the Tesla and X Corp. chief executive filed his lawsuit too late to challenge the ChatGPT maker’s transition from a nonprofit research lab to a for-profit company. The verdict, delivered in U.S. District Court before Judge Yvonne Gonzalez Rogers, allows OpenAI to proceed toward what could be one of the largest initial public offerings in history, with the company currently valued at $852 billion.
Musk had sought the ouster of OpenAI CEO Sam Altman, his fellow co-founder, and asked the court to force the company to unwind its for-profit structure. But the jury found that the statute of limitations had run on Musk’s central claims, which stemmed from events that occurred before early 2018. The decision avoided what could have been a costly court loss for OpenAI, according to analysts who followed the trial.
Although the legal outcome favored OpenAI, testimony during the multiweek trial left both Musk and Altman — once close collaborators — under fresh scrutiny. Witnesses called by Musk’s legal team offered testimony that characterized Altman as dishonest in his dealings with the board and with investors, according to the Associated Press. The trial laid bare the internal tensions and strategic disputes that have shaped OpenAI since its founding in 2015 as a nonprofit dedicated to developing AI for the benefit of humanity, before it created a for-profit subsidiary in 2019 to raise the capital needed for its work.
MSI has closely tracked the trial and the broader questions it raises about artificial intelligence governance. The trial highlighted the outsize influence of a remarkably small group of powerful tech figures and their personal rivalries, said Sarah Kreps, director of Cornell University’s Tech Policy Institute.
“At a time of growing concern about artificial intelligence’s impacts, the landmark trial shed new light on the flaws and outsize ambitions of the small number of billionaires steering the development of the breakthrough technology,” Kreps said, according to the Associated Press.
The proceedings also exposed the internal turmoil at OpenAI that predated Musk’s lawsuit, including the brief ouster and reinstatement of Altman as CEO in late 2023.
OpenAI’s path to an IPO now appears clearer. The company, which has attracted billions in investment from Microsoft and other backers, is expected to use the public offering to raise additional capital to fund the development of increasingly powerful AI systems. The trial, while legally resolved in OpenAI’s favor, has left the company and its leadership under continued public and regulatory scrutiny as the AI industry faces growing calls for oversight.