Here’s why Elon Musk lost his suit against OpenAI

On Monday, the jury in *Musk v. Altman *dealt Elon Musk a major blow—reaching a unanimous advisory verdict that he had sued OpenAI too late and, as a result, his claims are barred by the applicable statutes of limitations. US District Judge Yvonne Gonzalez Rogers immediately accepted it.

Musk announced on X that he will be appealing the decision. “The judge & jury never actually ruled on the merits of the case, just on a calendar technicality,” he wrote.

OpenAI was cofounded by Musk and a group of researchers in 2015 as a nonprofit with a mission to develop AI for the benefit of humanity, unconstrained by a need to generate financial returns. Musk donated $38 million to the company during its early days, allegedly on the basis that OpenAI CEO Sam Altman and president Greg Brockman had promised to keep the company a nonprofit committed to the mission.

Musk brought two claims against OpenAI. First, he argued that Altman and Brockman breached the charitable trust he created through his donations by breaking their promise to keep the company a nonprofit and creating a for-profit subsidiary that ballooned over the years. Second, he argued that Altman and Brockman unjustly enriched themselves at Musk’s expense. He sued OpenAI in 2024.

Musk asked the court to unwind a 2025 restructuring that converted OpenAI’s for-profit subsidiary into a public benefit corporation and to remove Altman and Brockman from their roles.

OpenAI argued that the time for Musk to sue the company had run out before he brought the case. The statute of limitations on the breach of charitable trust claim is three years, while the statute of limitations on the unjust enrichment claim is two years. This means that Musk should have discovered, or had reason to discover, Altman and Brockman’s alleged breach of charitable trust no earlier than 2021 and their alleged unjust enrichment no earlier than 2022.

While Musk argued he discovered that Altman and Brockman had broken their promise only in 2022, OpenAI claimed that Musk had reason to think this well before 2021.

Musk told the jury that he has gone through “three phases” in his beliefs about OpenAI: In phase one, he was “enthusiastically supportive” of the company. In phase two, “I started to lose confidence that they were telling me the truth,” he said. In phase three, “I’m sure they’re looting the nonprofit.”

2017: Musk proposes creating a for-profit subsidiary

In 2017, two years after OpenAI was founded, Musk and the other cofounders tried to create a for-profit subsidiary to raise enough capital to build artificial general intelligence. They fought a bitter power battle over who would get to control the entity. Musk also proposed merging OpenAI with his electric-car company, Tesla.

During the trial, OpenAI’s lawyers pressed Musk on these discussions, suggesting that Musk knew in 2017 about Altman and Brockman’s plans to pivot the company and had reason to sue then.

2019: OpenAI creates a for-profit subsidiary with capped profits

In 2019, OpenAI created a for-profit subsidiary and secured a $1 billion investment from Microsoft. OpenAI argued that Musk again had reason to sue the company then. But Musk testified that he didn’t think the move was violating the nonprofit’s mission at that time.

2020: Microsoft snags an exclusive license

In 2020, when Microsoft secured an exclusive license to OpenAI’s GPT-3 model, Musk posted on X: “This does seem like the opposite of open.” OpenAI once again argued that Musk had reason to sue then.

2022: Microsoft prepares to invest $10 billion in OpenAI

It was only in 2022, Musk testified, that he discovered OpenAI had abandoned its nonprofit mission. At that time, Microsoft was preparing to invest $10 billion in OpenAI. Musk told the jury this was the moment that made him realize “the for-profit is the tail wagging the dog.”

The jury sides with OpenAI

In the verdict announced today, the jury found Musk did in fact have reason to think that he was being misled by Altman and Brockman before 2021. They did not address whether he was in fact misled. Musk has said he will appeal the decision to the Ninth Circuit Court of Appeals.