Elon Musk vs OpenAI Lawsuit Verdict Explained

On X, programmer and investor Paul Graham, who chose Altman as his successor at startup incubator Y Combinator, wrote: “One of the things Musk vs Altman shows is how much more promising AI is than anyone expected.” Graham added, “Sam could have started it as a for-profit company. His life would be much simpler now if he had. But he didn't realize in 2015 that AI would warrant more than you can raise in donations.” x.com/paulg/status/205421..

Jurors rejected Elon Musk’s claims against OpenAI, delivering a major victory to CEO Sam Altman in Silicon Valley’s biggest grudge match. Judge Yvonne Gonzalez Rogers agreed with the jury’s decision. The nine-member jury’s decision on Monday, following three weeks of testimony and legal arguments, came after just two hours of deliberation. Musk, who co-founded OpenAI with Altman and President Greg Brockman in 2015, had accused them of violating a charitable trust and unjustly enriching themselves when they transformed the AI lab from a charity into a largely for-profit company. He accused Microsoft, an early backer, of aiding and abetting the breach of charitable trust. The jury found, and the judge agreed, that Musk waited too long to bring his lawsuit. OpenAI’s lawyers had argued that Musk already knew—or could have found out—about the actions he claims were unjust by the time he posted on X in 2020 that “OpenAI is essentially captured by Microsoft.” The decision removes significant uncertainties that have clouded OpenAI’s future as it grapples with intensifying competition and prepares for an IPO that could come as soon as this year. Musk had been asking the court to compel OpenAI to unwind a restructuring last year that paved the way for the possible IPO, transfer of billions of dollars from its for-profit arm to its nonprofit and remove Altman from the nonprofit’s board. nbcnews.com/tech/tech-new..

The loss was sort of a technicality: The jury found that Musk didn’t file the claim in time. That means the jurors didn’t make a decision on the core of his arguments, as Musk pointed out, adding that he would appeal. So this battle may not be over. Why is he wasting his time on this suit, even as he reaches for the stars with SpaceX and tries to remake Tesla into a robotaxi and robot company? Well, it probably doesn’t take much of his own time—aside from appearing in court or for depositions every now and then. Musk has the money to pay the lawyers and the desire for revenge, so he probably thinks, “Why not?” Also, some might say the less involved he is in SpaceX, the better, given his very capable No. 2, Gwynne Shotwell, and his not always helpful management style. For OpenAI, this decision is good news. Even with the possibility of an appeal, the uncertainty of the case has now largely been removed. Of course, OpenAI is beset by so many dramas—lately it has been fighting with Apple—that the real impact of this win may not last long. Sam Altman and friends should savor the victory while they can. x.com/elonmusk/status/205..