Elon Musk Drops Fraud Claims Against OpenAI and Sam Altman Ahead of Trial

Elon Musk Narrowly Focuses Lawsuit Against OpenAI Ahead of Trial

US District Judge Yvonne Gonzalez Rogers has agreed to streamline the case brought by Elon Musk against OpenAI and its co-founders Sam Altman and Greg Brockman, leaving only two claims to proceed to trial. The trial is set to begin on Monday in federal court in Oakland, California, with jury selection scheduled to take place.

Musk's lawsuit, which was filed in November 2024, initially included 26 claims against OpenAI and its executives. However, the scope of the case has now been significantly narrowed, with Musk's allegations focusing on two main claims: unjust enrichment and breach of charitable trust. Musk alleges that OpenAI abandoned its founding mission as a nonprofit to benefit humanity when it accepted billions of dollars in backing from Microsoft Corp. and planned its restructuring as a for-profit business.

The trial will be divided into two phases. During the first portion, a jury will hear arguments and testimony about Musk's allegations. The panel will then issue an advisory verdict, which will not be binding on Judge Gonzalez Rogers. In the second part of the proceedings, Judge Gonzalez Rogers will hear arguments on the remedies Musk is seeking, including a court order restoring OpenAI's status as a nonprofit research organization and the removal of Altman and Brockman from their roles at the company.

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Musk is seeking as much as $134 billion in damages, which he has asked be directed to OpenAI's charitable arm if he wins at trial. The damages are in addition to his request for a court order restoring OpenAI's nonprofit status and removing its current leadership. OpenAI, Altman, Brockman, and Microsoft have all denied wrongdoing, claiming that Musk's allegations are baseless harassment.

The case is a significant development in the ongoing dispute between Musk and OpenAI. The two companies were co-founded by Musk and Altman in 2015, but the former business partners have become bitter foes in recent years. Musk left OpenAI's board in 2018 and went on to co-found xAI, which has become one of OpenAI's main rivals. Last February, OpenAI rejected Musk's unsolicited bid to acquire the assets of the nonprofit that controls the company for $97.4 billion. Months later, the company completed its for-profit restructuring plan, paving the way for it to raise more capital and potentially go public.

Comparison of OpenAI's Status

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The case is Musk v. Altman, 4:24-cv-04722, US District Court, Northern District of California (Oakland).