Jury Rejects Musk's OpenAI Lawsuit on Statute of Limitations

In a decisive victory for Sam Altman and OpenAI, a federal jury in Oakland, California rejected Elon Musk's lawsuit against the company on Monday. The nine-person jury deliberated for less than two hours before finding that Musk had waited too long to file his claims. This ruling clears a significant legal hurdle for OpenAI as it prepares for an initial public offering (IPO) potentially valued at $1 trillion.

The trial, which began on April 27, exposed deep internal divisions within OpenAI and provided insight into the bitter feud between Musk and Altman. Musk accused Altman of 'stealing a charity' by transforming OpenAI from a nonprofit into a for-profit entity valued at $852 billion. He sought approximately $134-$150 billion in damages and the removal of Altman and President Greg Brockman from leadership positions, as reported by The Guardian. However, the jury's decision focused on the timing of Musk's lawsuit, finding that he had failed to file within the statute of limitations.

During the trial, testimony revealed significant internal conflicts about Altman's leadership. Former chief scientist Ilya Sutskever testified that he spent a year gathering evidence of what he called Altman's 'consistent pattern of lying,' according to Reuters. Sutskever prepared a 52-page document at the board's request detailing alleged dishonesty, including undermining executives. Altman took the witness stand to defend his business record, denying being dishonest and describing Musk as 'fairly mercurial.' He testified that Musk knew of plans to develop a for-profit enterprise when he invested, even petitioning for majority stake.

Microsoft CEO Satya Nadella added controversy by criticizing OpenAI's board decisions as 'amateur city' during Altman's brief ouster in 2023. The trial took on broader significance as regulators scrutinize AI industry practices and the House Oversight Committee requests documents from Altman regarding potential conflicts of interest, according to Al Jazeera. During closing arguments, Musk’s attorney Steven Molo emphasized questions about Altman's trustworthiness, listing several witnesses who testified that Altman was dishonest or misleading.

The trial featured numerous dramatic moments showcasing the years-long feud between Musk and Altman. Early in the trial, Musk repeatedly accused Altman of 'stealing a charity' as he gained control of OpenAI. Altman responded that 'I agree you can’t steal it. Mr Musk did try to kill it,' according to Reuters. Aside from a public relations battle, the case involved tangible threats to OpenAI's planned IPO later this year at a $1 trillion valuation. If the jury had found Altman and OpenAI liable, it would have been up to Judge Yvonne Gonzalez Rogers to determine what remedies are appropriate.

Following the verdict, Musk slammed the decision on social media platform X, calling it a 'terrible precedent' and vowing to appeal. He claimed that Altman and Brockman had enriched themselves by stealing a charity, stating, 'The only question is WHEN they did it!' according to Al Jazeera. OpenAI's attorney William Savitt responded by saying, 'Mr Musk can tell his stories. What the jury found today is just that: stories, not facts.' The ruling provides OpenAI with a clear path ahead for its IPO and reassures investors about its commercial structure and future fundraising plans.