Elon Musk Loses Landmark Lawsuit Against OpenAI

Elon Musk suffered the worst defeat possible in his legal battle against OpenAI as a federal jury and a judge ruled he waited too long to bring his claims against the AI startup and its top executives, Sam Altman and Greg Brockman.

While the jury’s decision was a nonbinding recommendation sent to US district judge Yvonne Gonzalez Rogers, she immediately accepted it as her own, making it final.

Musk’s lead trial attorney, Steven Molo, told the judge, “Our intention is to appeal.”

One of his other attorneys, Marc Toberoff, gave a one-word comment to reporters walking out of the courtroom: “Appeal.” He later said the verdict reminded him of American Revolutionary War moments like the Siege of Charleston and the Battle of Bunker Hill. “These were major losses for Americans, but who won the war?” Toberoff said. “And this one is not over.”

OpenAI’s attorneys hugged in the courtroom after the verdict was read. William Savitt, the company’s lead litigator, told reporters that the “overwhelming” amount of evidence presented in the case allowed the jury to act quickly. “The evidence that Mr. Musk’s lawsuit was an after-the-fact contrivance by a competitor was overwhelming,” he said.

Throughout the trial, Gonzalez Rogers questioned Musk’s motivation for fighting OpenAI. But she concluded on Monday that the three-week global public spectacle had been worthwhile.

“I thought it was an important issue to be tried … for us to have a trial to bring clarity,” she told attorneys for both parties. “There’s a substantial amount of evidence to support the jury’s findings, which is why I was prepared to accept the jury’s findings and dismiss on the spot.”

The nine-member panel delivered the unanimous verdict in an Oakland, California, courtroom on Monday after deliberating for under two hours. They found that statutes of limitations expired well before Musk filed his lawsuit in 2024. Musk had hoped to persuade the jury that Altman and Brockman, with the help of Microsoft’s cash, transformed OpenAI into an enormous company well beyond what was envisioned when the three of them and others founded it as a nonprofit nearly 11 years ago.

Because the jury found the case wasn’t filed on time, it didn’t weigh in on Musk’s three claims, including breach of charitable trust, unjust enrichment, and, against Microsoft, aiding and abetting. Losing on what amounts to a technicality could provide Musk an opening to keep trying his case in the public by arguing that the jury never ruled against his core argument that a charity was stolen.

Savitt, the OpenAI lawyer, disputed that contention on Monday. “It's not a technical decision, it's a substantive one,” he said. “It says you brought your claims too late, and you did it because you were sitting on them to use them as a weapon of a competitor who can't compete in the marketplace, and so we're delighted with the outcome.”

Microsoft spokesperson Alex Haurek said in a statement that the “facts and the timeline in this case have long been clear” and the tech giant remains “committed to our work with OpenAI to advance and scale AI.”

In posts on X, Musk called Gonzalez Rogers an “activist” judge “who simply used the jury as a fig leaf” and ruled on a “calendar technicality.” While the judge’s ruling doesn’t create a formal legal precedent, Musk claimed that, “She just handed out a free license to loot charities if you can keep the looting quiet for a few years!” He added in a separate post, “There is no question to anyone following the case in detail that Altman & Brockman did in fact enrich themselves by stealing a charity.”

Despite the disappointing result for Musk, the trial appears to have tarnished the public image of OpenAI and its top executives. New details emerged about Brockman’s wealth and Altman’s alleged history of dishonesty. Both were also pulled away from their day-to-day work for tens, if not hundreds, of hours to conduct depositions, prepare to testify, sit on the witness stand, and show face in court.

Musk spent much less time in the courtroom than the OpenAI executives, about three days before never returning again. He even flew to China for President Donald Trump’s state visit last week, though he technically could have been called to testify again on short notice. “I will say that it was a surprise to us to see that,” Savitt told the media last week. “Instead of being in the jurisdiction where he filed the lawsuit, ready to come in front of the jurors who he has caused to be impaneled, [he] decided to get on Air Force One and go to China.”

Though the case carried financial and emotional stakes, it was also a competition of bravado between two tech billionaires who broke up a brief partnership of convenience over an alleged leadership dispute, only to end up pursuing remarkably similar visions about the future of generative AI. Musk’s bid to settle the lawsuit just before the trial started was rebuffed.

12-Day Trial

Over the 12 days of the trial, attorneys for OpenAI repeatedly pointed to what they said was a lack of evidence corroborating Musk’s version of events.

Musk, the famously temperamental serial entrepreneur behind Tesla and SpaceX, and Altman, then a 30-year-old startup founder turned investor, cofounded OpenAI as a nonprofit because they believed it would help them claim the “moral high ground” over their biggest competitor, Google. As a nonprofit, OpenAI could focus on keeping AI from destroying humanity without having to concentrate on maximizing value for shareholders. Musk and Altman believed that mission-driven approach would help the organization attract top researchers and win public support.

But time would show that they misjudged the fundraising challenges that the nonprofit structure would pose, as well as the amount of money they would need to develop so-called artificial general intelligence.

In his lawsuit, Musk alleged that the $38 million he donated to OpenAI from 2016 through 2020 had been misused because Altman and Brockman spent it on groundbreaking AI research and then shifted all that technical expertise to a for-profit subsidiary. But Musk had agreed to the for-profit’s creation, according to evidence and testimony presented in court. He decided not to invest in it after losing his bid to control it.

Musk became especially angry when Microsoft later invested a total of $13 billion in OpenAI and the startup became a household name after the stunning debut of ChatGPT in 2022.

The following year Musk started a rival to OpenAI called xAI, and began laying the groundwork for the federal lawsuit he would file in 2024. He said at trial that his concerns about OpenAI’s for-profit subsidiary’s swing only emerged in 2023, but evidence presented in the case suggested his doubts went back further, indicating that he had a chance to file his case sooner and didn't.

Several members of the jury, which included a nurse assistant, a retiree, and a city government worker, expressed unfavorable views of Musk before they were selected. They took copious notes in binders during the trial and suggested several questions for witnesses that Gonzalez Rogers directed attorneys to incorporate into their examinations.

Had Musk won, he could have been entitled to financial damages, up to potentially over $100 billion from OpenAI’s for-profit subsidiary, which he said he would have donated back to OpenAI’s nonprofit. Musk also wanted Altman and Brockman to lose their jobs, with the court providing ongoing oversight to hold OpenAI accountable to its charitable mission of safely developing AGI.

OpenAI is nowhere near turning a profit—it has continued spending heavily to improve and operate its AI models. But annualized revenue from subscriptions, licensing, and ads surpassed $20 billion in 2025, according to the company. It is currently seeking to list shares on a public stock exchange as soon as this year, cementing the pivot away from its nonprofit roots. OpenAI maintains a nonprofit foundation.