Judge finds Musk waited too long to sue OpenAI and Microsoft, clearing defendants in landmark AI case

A jury ruled unanimously Monday that Elon Musk waited too long to file his lawsuit against OpenAI, Sam Altman, and Microsoft, finding the defendants not guilty on all claims after less than two hours of trial.

A nine-person jury found Altman, founder Greg Brockman, and OpenAI not liable for the charity’s breach of trust and unjust enrichment claims. On similar statute-of-limitations grounds, the judge rejected Musk’s claim that Microsoft aided and abetted OpenAI’s breach of trust.

The decision, reached early in the morning of the talks, caps a three-week trial in federal court in Oakland that has drawn testimony from some prominent figures in the tech industry and threatened to reshape the AI ​​landscape.

Steven Molo, Musk’s lawyer, is reported to have said in court that he reserves the right to appeal the case but has not yet decided how to proceed.

Microsoft’s statement: “The facts and timeline in this case have long been clear, and we welcome the judge’s decision to dismiss these claims as timely. We are committed to our work with OpenAI to advance and scale AI for people and organizations around the world.”

Musk founded OpenAI in 2015 as a non-profit organization dedicated to the safe development of artificial intelligence, donating about $38 million before leaving the board in 2018.

He filed a lawsuit in 2024, claiming Altman, Brockman, and others turned OpenAI into a for-profit enterprise, betraying the mission he helped fund. Microsoft, which has invested more than $13 billion in OpenAI since 2019, was also added as a defendant.

The three claims that went to court are breach of charitable trust and unjust enrichment against OpenAI, Altman, and Brockman, and aiding and abetting breach of charitable trust against Microsoft. The decision of the nine judges is advisory; US District Judge Yvonne Gonzalez Rogers will make the final decision on the charge.

The case dragged on for three weeks in federal court in Oakland, with testimony from Musk, Altman, Brockman, former chief scientist of OpenAI Ilya Sutskever, Microsoft CEO Satya Nadella, and Microsoft CTO Kevin Scott, among many other witnesses called by the parties in the case.

Internal emails, text messages, and written documents reveal the inner workings of the Microsoft-OpenAI partnership, including Nadella and other Microsoft executives who weighed in on the creation of OpenAI’s board during the crisis that briefly ousted Altman as CEO in November 2023.

A key exhibit in Musk’s case was a March 2018 email in which Scott asked if OpenAI’s donors knew about their commercial plans, writing that he didn’t think they funded an open-source effort “so they could go build a closed environment, to make a profit off of it.” Microsoft continued to invest billions anyway.

Scott testified that he wrote the email as a skeptic analyzing the deal, not talking about its mission — and that he had donor Reid Hoffman, not Musk, in mind.

In closing arguments, Microsoft attorney Russell Cohen of Dechert told jurors that the email only shows that “Microsoft took time to find answers to those questions before entering into a dangerous and important relationship.”

A key defense argument for both closing dates centered on a September 24, 2020 tweet in which Musk wrote that OpenAI had come as “the opposite of open” and appeared to be “really hijacked by Microsoft.”

Cohen said the position proved that Musk believed his promises had been broken years before he filed his claim — potentially putting his claims outside the three-year statute of limitations. He closed his argument by urging the judges to find the claims time-barred.

“We’re just asking you to remember one thing, the tweet,” Cohen said, asking them to find that the statute of limitations prevents Musk from making claims against Microsoft.

On the opening day of the trial, Microsoft and OpenAI announced an amended partnership, making Microsoft’s IP license non-exclusive, freeing OpenAI to offer products to any cloud provider, and ending Microsoft’s royalty payments to OpenAI. Amazon moved the next day to bring OpenAI models to its cloud environment.

Musk asked the judge to remove Altman and Brockman from their roles at OpenAI, free the company’s 2025 conversion to a public profit organization, and return what he called unfair profits to the OpenAI nonprofit.

His damage expert initially put the combined cost at $134 billion. The judge questioned those numbers, and the remedy class was heard separately.