Elon Musk has lost his lawsuit against Sam Altman and OpenAI

Elon Musk’s claim that he was mistreated by his OpenAI co-founders failed after nine California jurors unanimously ruled that his lawsuits were filed too late.

Musk accused Sam Altman, Greg Brockman, OpenAI and Microsoft of “stealing a good cause” by creating a profitable branch of the Frontier AI lab. However, jurors ruled that any damages Musk may have suffered before the deadline for filing his claims were covered by the law.

Although the trial delved deeply into OpenAI’s melodramatic history and featured testimony from leading Silicon Valley figures, it ultimately turned on fairly narrow questions of law. The trial focused on whether and when Altman and the other defendants made and broke promises to Musk, but his case failed to convince jurors that he had a valid claim.

In particular, OpenAI had put forward a defense deadline, which sought to prove that the damages Musk wanted to litigate had occurred before 2021. (The specific date varied depending on the charge: before August 5, 2021, for the first charge; August 5, 2022, for the second charge; and November 14, 2021, for the third charge.) Ultimately, the jury found that argument persuasive, prompting a brief deliberation period.

“There was a significant amount of evidence supporting the jury’s findings, and therefore I was prepared to dismiss the case on the spot,” Judge Yvonne Gonzalez Rogers said after the verdict was handed down.

The end of the case means that a major threat to OpenAI – a possible restructuring – is now off the table ahead of the reported IPO.

“It didn’t last [the jury] two hours to conclude … that Mr. Musk’s lawsuit is nothing more than an after-the-fact fabrication that bears no relation to reality,” OpenAI’s lead attorney Bill Savitt said after the verdict. “They put it right where it belongs — just out of the way. This lawsuit is a hypocritical attempt to sabotage a competitor.”

Microsoft, which has sued Musk for complicity in OpenAI’s alleged breach of charitable trust, welcomed the verdict. A spokesperson for the company said it “remained committed to our work with OpenAI to advance and scale AI for people and organizations around the world.”

The verdict came in the middle of a hearing to determine the potential harm to Musk if the verdict had gone the other way. While that discussion is moot for now, the judge seemed unconvinced by the analogy Musk’s lawyers drew between his charitable contributions and investments in a for-profit startup.

“Your analysis appears to be unrelated to the underlying facts,” she told Dr. C. Paul Wazzan, the expert who made Musk’s estimate of OpenAI and Microsoft’s illicit profits at his expense — some $78.8 billion to $135 billion.

In a tweet after the ruling, Musk appeared to view the procedural grounds for the dismissal as a moral victory. “There is no question for anyone who follows the case in detail whether Altman & Brockman actually enriched themselves by stealing from a charity. The only question is WHEN they did it!” Musk wrote. “I am appealing to the Ninth Circuit because setting a precedent for looting charities is incredibly destructive to charitable giving in America.”

Contacted for comment by TechCrunch, Musk’s lead attorney, Marc Toberoff, said: “One word: appeal.”