OpenAI nonprofit dispute ends without verdict as Musk lawsuit dismissed

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A federal jury in Oakland, California dismissed Elon Musk’s lawsuit against OpenAI on Monday after a court determined the case missed a statutory deadline, ending a three-week trial that never reached the merits. The procedural dismissal capped a legal fight between Musk and OpenAI CEO Sam Altman that had turned into a high-profile courtroom record about how leaders in AI weighing massive costs and competing visions for the technology’s direction.

Musk’s complaint, as described in testimony and evidence presented during trial, accused OpenAI of betraying its charitable mission as it transitioned into a capitalistic enterprise. The lawsuit alleged that Altman and fellow co-founder Greg Brockman went behind Musk’s back and unjustly enriched themselves, while Musk also faced a central contention that he helped set in motion the very shift he later challenged.

OpenAI, for its part, has said Musk supported plans to form a for-profit company, and it filed Musk’s 2024 lawsuit to undercut OpenAI as Musk built his own AI company, xAI. While the trial did not produce a jury verdict on the substance of those competing claims, it still placed disputed internal details of AI’s economics and governance into the public record.

Witness testimony also showed how Microsoft approached the bet. Kevin Scott, Microsoft’s chief technology officer, told jurors that Microsoft decided to invest billions of dollars to help build OpenAI’s technology after Musk quit OpenAI’s board in 2018 and after Microsoft’s skepticism about whether AI claims would materialize. Scott described the period as before ChatGPT and said Microsoft’s internal outlook was cautious about whether key promises would come true.

Scott told the court that OpenAI’s needs involved building blocks of compute and data at scale, describing “very capital-intensive projects like building giant data centers, full of very expensive computers and networks.” The testimony tied that need to a view that OpenAI told Microsoft it required more data and more computing resources, and that those ingredients would allow its AI systems to become far more powerful.

The trial also returned to the question of how leaders talked about money long before today’s AI boom. The evidence presented included what Musk said was a 2018 email in which he told Altman and other OpenAI co-founders that the effort would require “billions per year immediately” and that even “raising several hundred million won’t be enough.” That exchange was used to underscore the argument that control of the AI industry’s resources and costs were central to internal decisions nearly a decade ago.

As the case explored OpenAI’s financing trajectory, the testimony reflected uncertainty in the company’s early years and a later view that AI investment had moved beyond speculation. Karan Girotra, a professor of operations, technology, and innovation at Cornell Tech, testified that early on, AI remained a risky investment even with nonprofit backing, but that investment in AI was no longer speculative once results and momentum became clearer.

The courtroom record also traced how technical milestones fed the business debate inside OpenAI. Before ChatGPT, OpenAI’s company-wide moment came when it taught an AI system to beat professional players of Dota 2, and Altman testified about the significance of that breakthrough as a demonstration—using reinforcement learning—to take on a complex task. The testimony described OpenAI’s livestreamed victory over a top Dota 2 player in Seattle in 2017 as helping make the small nonprofit a major contender against Google at a time when Google was widely seen as the leader in AI research.

Altman testified that after the Dota victory, Musk pushed for taking “more serious” steps and figuring out “how to get way more capital.” For former OpenAI chief scientist Ilya Sutskever, the Dota win helped drive discussion about whether OpenAI should create a for-profit structure to raise money more easily, with Sutskever telling jurors that progress required a big computer and explaining the scale in terms of neurons and synapses in the brain.

The trial described a battle for direction and leadership, including competing efforts that culminated in Musk quitting OpenAI. Even without a verdict on the merits, the evidence presented to jurors captured disagreements over the costs of building and scaling AI and the governance choices that, according to the testimony, helped set the industry’s path as Wall Street’s interest in major debuts grew.