Federal Court Rules Against Elon Musk in His Bitter Feud With Sam Altman

The verdict comes after a weekslong blockbuster trial in Silicon Valley, in which the Tesla CEO accused Altman and Brockman of “stealing a charity” as they built a more than $850 million company on the back of their nonprofit. Court documents and testimony from a score of tech elites, including Microsoft CEO Satya Nadella, shed light on the rise of OpenAI — as well as on the interpersonal strife and falling out between Altman and Musk, who were once close friends.

Musk’s high-profile testimony in the case also raised questions over Altman’s trustworthiness and leadership as the company pursues artificial general intelligence, a superintelligent form of AI and a potential trillion-dollar initial public offering.

Altman’s defense argued that OpenAI had to form a profit-generating arm to keep up with competitors as AI technology advanced. They said that prior to leaving OpenAI, Musk was amenable to creating a for-profit, which he wanted to control. When other executives refused to agree to his terms, he left the company.

But Monday’s verdict disregarded many of the trial’s revelations, and instead hinged on the timeline of Musk’s claims.

The jury agreed with OpenAI’s defense that Musk missed the statute of limitations to allege a breach of charitable trust. They also dismissed a claim that Microsoft, OpenAI’s largest investor, aided and abetted a breach of charitable trust.

Sarah Eddy, an attorney for OpenAI, noted in her closing argument that Musk departed the company in 2018, watched it build up a for-profit arm beginning in 2019 and made his final monetary contribution the year after that. Yet, he waited until 2024, after he’d launched a competing AI enterprise, to bring his suit.

She called the case a “textbook” example of why the statute of limitations exists, saying that when Musk made his last contribution and testified that he became suspicious of a breach of charitable trust in 2020, he “started the clock.” According to Eddy, Musk should have sued by 2022 at the latest.

Musk’s counsel, Marc Toberoff, said there was a strong basis for appeal based on the legal components, statute of limitations aside. Musk also wrote on X, which he owns, that he planned to file an appeal.

“There is no question to anyone following the case in detail that Altman & Brockman did in fact enrich themselves by stealing a charity. The only question is WHEN they did it!” he wrote. “Creating a precedent to loot charities is incredibly destructive to charitable giving in America.”

Outside the court, anti-AI protesters who have been present for much of the trial decried the decision.

“No matter who won, we all lost,” said Phoebe Thomas Sorgen, an activist with StopAI, which seeks to “disrupt the reckless development of destructive” AI tech, according to its website. “We all lost. Sam Altman won, but look at who he is and what he’s doing.”