A U.S. judge has ruled that a lawsuit filed by billionaire entrepreneur Elon Musk against OpenAI can move forward to a jury trial, allowing jurors to decide whether the artificial intelligence company violated its original nonprofit mission when it restructured into a for-profit entity.
Musk, who co-founded OpenAI in 2015 before leaving the organization in 2018, now leads a competing artificial intelligence firm. On Wednesday, U.S. District Judge Yvonne Gonzalez Rogers said there was “plenty of evidence” suggesting OpenAI’s leadership gave assurances that the organization would maintain its
nonprofit structure.
Speaking at a hearing in Oakland, California, Gonzalez Rogers said there were enough disputed facts to warrant a jury trial, which is scheduled for March, rather than resolving the matter herself. She said she would issue a written order addressing OpenAI’s request to dismiss the case.
The legal dispute unfolds amid a broader competition for dominance in the rapidly growing generative artificial intelligence market. Musk’s company, xAI, and its chatbot Grok compete directly with OpenAI and other technology developers.
Musk is seeking unspecified monetary damages, which he describes as compensation for what he claims are “ill-gotten gains” by OpenAI.
In a statement issued after the hearing, OpenAI said, “Mr. Musk’s lawsuit continues to be baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating this at trial.” Musk’s artificial intelligence startup, xAI, did not immediately respond to a request for comment.
Steven Molo, a lead trial attorney representing Musk and xAI, said after the hearing that the legal team looks forward to presenting evidence of what it alleges was wrongdoing by the defendants to the jury.
Musk argues that he contributed about $38 million roughly 60% of OpenAI’s early funding along with strategic guidance and credibility, based on assurances that the organization would remain a nonprofit focused on public benefit.
The lawsuit accuses OpenAI co-founders Sam Altman and Greg Brockman of
planning a shift to a for-profit model to enrich themselves, a process that allegedly
culminated in multibillion-dollar deals with Microsoft and a recent corporate
restructuring.
OpenAI, Altman, and Brockman have denied the allegations, describing Musk as “a frustrated commercial competitor seeking to slow down a mission-driven market leader.” Microsoft, which is also named as a defendant, has urged the court to dismiss Musk’s claims against it. A lawyer for Microsoft said there was no evidence the
company “aided and abetted” OpenAI.
Microsoft did not immediately respond to a request for comment.
During the hearing, lawyers for OpenAI asked Gonzalez Rogers to rule in their favor, arguing that Musk failed to provide enough factual support for his claims, including allegations of fraud and breach of contract.
OpenAI has also argued that Musk waited too long to file the lawsuit. Gonzalez Rogers said the jury will be asked to determine whether the case was brought outside the applicable statute of limitations.