Musk lost today because the jury found that he waited too long to bring his claims. The jury answers only yes/no questions, so we do not know their exact thoughts, but it is likely they determined that the 2019 and 2021 Microsoft deals were too similar to the 2023 Microsoft deal that was the centerpiece of Musk’s lawsuit. Musk could have brought the same lawsuit in 2019 or 2021, meaning his claims were untimely for the 3 year statute of limitations.
Because the statute of limitations is a precondition, the jury was not asked to find any other facts. They may tell the press what they thought on other issues, or they may not.
The judge was prepared to immediately accept the jury’s finding, and said she agreed that the jury’s decision was supported by the evidence.
It is possible for Musk to appeal, but success is vanishingly unlikely. Whether Musk’s claims are barred by the statute of limitations is a quintessential question of fact, and appellate courts are extraordinarily deferential to factual findings by juries so as a practical matter it’s almost impossible to appeal this verdict.
If I had been on the jury, I would have found against Musk on every point.
His lawyers created a “3 phases of doubt” to try and sidestep the statute of limitations, but it was clearly bogus and he was on notice of OpenAI creating a for-profit in 2019.
Musk was perfectly happy to have OpenAI be a for-profit, a non-profit with an attached for-profit (the current structure), or even just absorbed into Tesla. His complaints fell flat for me given the number of emails where he said that a non-profit was likely a mistake.
This is technical, but Musk clearly never created a charitable trust, which was a precondition for his claims. His funds were donated for general use by OpenAI, not for any specific use that would allow him to claim breach of charitable trust. Also, all of his funds were spent by no later than 2020 which is before his alleged breach in 2023.
Musk unreasonably delayed bringing this case until the success of ChatGPT and starting a competing AI company, and he had unclean hands because he attempted to sabotage OpenAI repeatedly by poaching its key staff while on the board.
To that extent, what Musk was happy or unhappy with is irrelevant. What is actually allowed by the law is more important.
However, it seems that the lawsuit was not phrased that way and Musk just looked for damages to himself. In that frame it's not much of a surprise that things ended this way.
No, you wouldn't.
The case was thrown out of court before you have any chance to comment or decide on that.
Jury don't randomly "found" something. The court ask questions, the Jury answers those.
The fact is, OpenAI was a non-profit belonging to the public and it was appropriated by the donors... Who already got their tax cuts.
This is setting a precedent that if you donate a certain amount of money to a charity, you can later convert it to a for-profit and claim to be an owner of the charity... On the basis of 'donations' which you got a tax rebate from. Very convenient.
OpenAI donors should have created a new, separate, for-profit entity completely distinct from OpenAI, with a different name, poached the original employees, implemented all the logic from scratch, collected all the training data from scratch... This would have been correct. Basically what Anthropic did seems more like the correct way.
So the question before the jury has a significant component of "Should he have found out by this time?" Which is a question of fact, and facts are typically decided by juries, in the US at least.
The two parties can agree together to let a judge decide facts like this, but generally, if one or the other party wants it to go to a jury, it does.
I'm guessing part of Musk's strategy was to have it go to the jury, which are often seen as easier to manipulate than judges, especially when a case is weak. Or perhaps his team already knew this particular judge would be inclined to rule against him, so did the next best thing.
That's what the jury found against - they said he was reasonably informed enough to have brought the suit earlier and thus the 3 year clock should start ticking in 2020 not 2023.
In this case I guess the question was 'when did the incident actually happen' with Elon arguing it was later then Altman.
Statutes of limitations are usually not tried by juries because the underlying facts that cause them to kick in are usually not in actual dispute. Instead a fight over statute of limitation is more likely to be over which statute applies or whether some other mitigating circumstance is kicking in, which are matters of law which do not go to a jury.
It seems the biggest value loss to the nonprofit was in this conversion, not in the initial for profit subsidiary creation giving investors capped profit shares.
He doesn't have to win to succeed.
The richest man on the planet can keep his enemies tied up in court needlessly until the day he dies.
I think Musk's lawyers told him he'd probably lose this suit before he filed it. I suspect he proceeded mostly out of spite and to embarrass Altman by ensuring the concerns even his friends had about his candor and trustworthiness went on the record and were splashed across the media. Musk knew he had little chance of unwinding the theft of a non-profit (and I doubt he cared much about that).
It would have been much better if Musk had actually cared enough about OAI's original mission to bring suit in 2019. However, I'm still glad Musk did this now because Altman and Brockman (with the help of MSFT and others) DID steal a non-profit, or at least subverted it's mission. And this fleeting bit of public embarrassment (funded by Musk for other spiteful reasons) is the only penalty they'll ever see.
So not being within the statute of limitations is typically a legal issue so what must've happened here is the jury would've been asked if the earlier OpenAI-MS deals were substantially similar to the latest deal. I can't find the verdict form or the jury instructions but I'll bet that was the key issue the jury decided.
More often than not the sentences are irrelevant, it's known that it's a lost cause, and they will still proceed if it can bring any dirt or bad publicity or annoyance to the counter party.
Why is a hypothetical ground for this decision? "You didn't complain immediately the first time you got robbed, therefore all the robbing since then is covered by a statute of limitation".
This case demonstrates why. Musk only complained after OpenAI was commercially successful with ChatGPT and after he started a competing effort. He repeatedly said “I do not know” and “I do not recall” on the stand, and argued that the passage of time made it hard for him to remember facts that would have been helpful for OpenAI.
"If the jury determines that at any time before those dates, Musk either knew — or had or should have known — that he had a claim that he could bring, then his suit was brought too late. The consequence of being too late is swift and absolute. If the lawsuit was filed late for a particular claim, that claim is out of the case; if it was too late for all of Musk’s claims, the lawsuit is over."
That's where the question of fact (i.e., the requirement for a jury decision) came in: "What was the statute of limitations?" is a question of law, but "When should Musk have known that OpenAI was moving too much toward for-profit?" is a question of fact (and, here, determines whether the statute of limitations applies).
1. Estoppel. If a party relies on your conduct then you can lose the right to sue over it;
2. Laches. This is a defense against prejudicial conduct, typically by waiting too long to take action;
3. Waiver. Your conduct can waive your right to sue. Imagine you live with someone and they don't pay half of the rent so you cover it. At some point your continued conduct means you lose the right to sue; and
4. The statute of limitations. Some claims simply have to be brought within a certain period. How this applies can be really complex. For example, we saw this in Trump's fraud convictions in New York. His time in office, away from the jurisdiction, essentially suspended the statute of limitations.
Some crimes like murder have no statute of limitations. Others have unreasonably short statutes of limitations. For example, probably nobody can be charged in relation to sex trafficking in the Epstein saga because the statute of limitations is often 5 years with such crimes. This is unreasonable (IMHO) because often the victims are children and unable to make a criminal complaint.
It's also worth adding that not all legal systems have such wide-ranging statutes of limitation as the US does. Founding principles of those other legal systems is that the government shouldn't be arbitrarily restricted for prosecuting criminal conduct. The US system ostensibly favors "timely" prosecution.
Shouldn't the defense have raised the statute of limitations much earlier?
One wonders on what grounds?
In the UK, in a civil case like this, the judge I think comments on the likelihood of an appeal avenue once the verdict has been reached.
Never. That never ever happens.
Whereas no appeal is effectively him getting fired.
Invent a time machine; send a lawyer back to file a new lawsuit within the statute of limitations.
You can try to file it again, but that gets to the point where the judge can throw your ass directly in jail for 30 days, do not pass go, do not collect 200 dollars.
But (at least in the US), the appeals court does not have to accept your appeal. When you file the appeal, you have to give them enough reason for them to even listen to your appeal, instead of rejecting it from the first filing.
It's a foundational issue that goes to whether the court is even allowed to proceed with the case. A defendant could be guilty/liable/whatever of the alleged claims, and it wouldn't matter. If the statute of limitations has run, they're in the clear.
The only counter to an SOL defense is to try and claim that the SOL was paused for some reason, but those exceptions are very narrow and wouldn't apply here (and in the real world very rarely apply to civil cases).
Or the "I Forgot It Was Tuesday" argument?
So I take that to mean Musk wanted a settlement as primary goal, and that the threat to OpenAI's reputation was just an (unsuccessful) means to get what he wanted. That isn't to say it wasn't personal for Musk, just that he would have preferred to have gotten paid.
As to Musk texting "By the end of this week, you and Sam will be the most hated men in America. If you insist, so it will be" when the settlement offer was turned down, while I'd agree there were a ton of super embarrassing details that came out I don't think Musk was successful in making them more hated than even he is. I don't even think this secondary goal was successful, even though there were a ton of juicy bits.
I think regardless it would be extremely hard for him to make people hate Altman et al. more than himself. Altman's flaws are more subtle and require paying attention to a pattern of behavior. Musk has beem pure cringe for 5+ years now.
My friend had no idea who he was. My friend doesn’t work in tech but he’s in his late 20s and we are both British so I was quite surprised. My guess is most of the world has no idea who these people are, despite their influence they are very niche celebrities.
Maybe Sam is more famous but I’d guess ~no one knows Greg Brockman.
So I find “most hated men in America” quite dramatic!
Isn't this blackmail?
Judging by the sheer number of journalistic investigations into OpenAI and the number of accounts of former employees, I would have expected that OpenAI being chaotic and poorly run is common knowledge by now and the lawsuit doesn't add much more to it.
Sometimes rich, powerful people do stuff that's irrational. When you see Trump attack Iran and you think "this doesn't appear to make sense," you can reason "there must have been secret intelligence proving that Iran was about to nuke Israel because otherwise it was a stupid move," or you can reason "it didn't make sense because it was a stupid move."
Really comes down to what you think his primary motivation is and what are just benefits.
I wonder if the government or taxpayers have a case to bring regarding that.
The attorneys general of California and Delaware could challenge that 2019 IP transfer if they so wished on behalf of the public.
The issue is that they did R&D as a charity, donations to which are tax deductible, there may also be other benefits to being a charity during R&D but that’s a big one, then once the thing works, setup a for profit, sell ip at “fair value”, get some investment, then things are ready for business.
I read there’s no statute of limitations on a tax issue like this, so I guess it might be hanging over them indefinitely.
I’m not a big taxation and government fan, they’d probably just waste the money anyways. It does seem unfair OpenAI gets to use this loophole though, unless all companies can make their R&D investment tax deductible, and get any other benefits of this setup.
> Early Angels (Reid Hoffman, Peter Thiel, and others): Approximately $10 million invested, current value $1.4 billion. That corresponds to a return of around 140x.
If it had been a for-profit company contributing assets to another for-profit company, the transaction would not have had any different tax consequence.
(This is just a thought IANAL)
Only people who are pretending to be confused are people for whom it's in their interest to be confused.
They created a non-profit with the intention of launching AI to make sure that it would stay in the public trust, and then once it became really valuable, they spirited it away into private hands.
It's just a fact. It's obvious from looking at the thing. The details are designed to confuse and trick you into thinking that what you can plainly see happening is OK somehow.
There is no counter factual where OpenAI exists as a non-profit and still inexplicably gets handed billions of dollars of compute to train LLMs. The for-profit company is a different thing from the non-profit and it exists for perfectly understandable reasons and I'm unsure why anyone other than Elon Musk pretends this doesn't make sense.
What is your proposed counter factual where the non-profit entity retains all ownership of the venture, but somehow finds hundreds of billions of dollars to train LLMs?
Having thought about this whole thing more I believe that non-profits should not be a separate type of entity that gets special tax treatment. People have different ideas of what constitutes legitimate non-profit activity. It just opens things up for tax avoidance and scams.
That seems unlikely to me given how divisive he is. OpenAI already had one existential leadership crisis without Musk. I doubt it would have fair better under his notoriously difficult leadership. If he had wrestled control away, I would expect an exodus of employees going to new companies.
1. 2019 capped-profit restructuring + 1B MSFT investment
2. 2023 Microsoft expansion / reported 75%-then-49% economics
3. 2024/2025 PBC restructuring
AFAIK it has not been reported as to exactly what the jury found, but IIUC the 2019 date is consistent with their findings.
That's poor for Musk, but it makes sense. He was arguing 2023. I think it is a valid argument.
But he had to know that 2019 was very much in play (and is likely the most logically consistent).
This is very squishy law.
It's the same as always. Musk himself is an awful business man. He relies upon buying the success of others and taking over. Outside of that, he's kind of awful. Initiatives started by Musk himself almost inevitably fail.
SpaceX, founded entirely by him alone, is also the most valuable space technology company on earth, so...
Disclaimer: My portfolio is 65% Tesla.
Regarding the OpenAI case, the judge & jury never actually ruled on the merits of the case, just on a calendar technicality.
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!
I will be filing an appeal with the Ninth Circuit, because creating a precedent to loot charities is incredibly destructive to charitable giving in America.
OpenAI was founded to benefit all of humanity.
e.g the twitter thing - forced to buy when he didn't want.
If anyone is/was truly still wronged by OpenAI changing corporate structure they are still able to sue and prove damages. Yet surprisingly no one has come forward on this.
Sol Roth
It's not theft unless a jury says it is, they didn't say it is.
I do not think that your second was correct.
I don't think it's a coincidence he didn't bring this suit until after the Altman ouster debacle. Discovery was probably the real objective all along.
I'm sure his lawyers told him he wasn't likely to win, so have to assume embarrassment of OpenAI was the goal.
They didn’t do any lobbying? ^_^
Moreover, there is no "justice" here either way--it's just rich people suing each other.
What they did to him was unfair, he put in all the money, office and initial push, he deserves a piece of the pie he created. This is quite unfair towards him.
We're all supposed to play by the same rules.
But they have emails from one Elon Musk telling them to structure it roughly how it turned out.
They also have emails including Musk where the profit share is discussed, and his "investment" is talked about as roughly a donation.
Like he could have asked for a profit share at any point and it just doesn't seem to happen?
If the outcome is unfair to Musk, its because Musk worked tirelessly to ensure he had no legal standing with which to make it fair to Musk.
Intersting outcome. So it's more of a dismissal on technical grounds rather than a complete loss.
In point of fact most valuations place OpenAI in the hundreds of billions of dollars already and growing rapidly.
Basically, no: OpenAI's pockets are deeper than Musks's personal wealth. Especially so considering that this suit is existentially important to them where Musk needs to maintain leverage for other efforts.
There won't be a round 2. It's over.
Perhaps he lacks good lawyers, perhaps he just can’t find substance and he’s filling out of spite.
Of course this will be appealed but, as you see the claims just don't stick.
Musk is an idiot
Lawyers will be happy to take more of his money
https://www.technologyreview.com/2026/05/18/1137488/elon-mus...
The correct remedy would be to return OpenAI to its former non-profit structure but that's never going to happen in the current system.
The next thing after 'too big to fail' is 'too big to litigate.'
Stealing a non-profit entity is legal if enough people dump billions of dollars in it.
I was really hoping they could somehow both lose.
PS Bravo to his lawyers. Get his cash folks by promising him that he will win!
Basically the title of the court case was: "Is Skynet slop going to be helpful to mankind".
We all know how that story ends. Thus, fining both is warranted. When the superrich go to court, they should pay an extra fee. Like a billion per court case or so.
"At some point we’d get someone to run the team, but he/she probably shouldn’t be on the governance board"
"generally, safety should be a first-class requirement"
"Probably better to have a standard C corp with a parallel nonprofit"
"Because we don't have any financial obligations, we can focus on the maximal positive human impact"
"The underlying philosophy of our company [OpenAI] is to disseminate AI technology as broadly as possible as an extension of all individual human wills, ensuring, in the spirit of liberty, that the power of digital intelligence is not overly concentrated and evolves toward the future desired by the sum of humanity"
"The outcome of this venture is uncertain and the pay is low compared to what others will offer, but we believe the goal and the structure are right"
"do you have any objection to me proactively increasing everyone's comp by 100-200k per year?"
"The output of any company is the vector sum of the people within it."
"it's totally OK to not share the science (even though sharing everything is definitely the right strategy in the short and possibly medium term for recruitment purposes)"
"Frankly, what surprises me is that the AI community is taking this long to figure out concepts. It doesn't sound super hard."
"Powerful ideas are produced by top people. Massive clusters help, and are very worth getting, but they play a less important role."
"Deepmind is causing me extreme mental stress."
"At any given time, we will take the action that is likely to most strongly benefit the world."
"Would be worth way more than $50M not to seem like Microsoft's marketing bitch."
"Ok. Let's figure out the least expensive way to ensure compute power is not a constraint..."
"Within the next three years, robotics should be completely solved . . . In as little as four years, each overnight experiment will feasibly use so much compute capacity that there’s an actual chance of waking up to AGI"
"We think the path must be: AI research non-profit (through end of 2017), AI research + hardware for-profit (starting 2018), Government project (when: ??)"
"Satisfying this means a situation where, regardless of what happens to the three of them, it's guaranteed that power over the company is distributed after the 2-3 year initial period"
"As mentioned, my experience with boards (assuming they consist of good, smart people) is that they are rational and reasonable. There is basically never a real hardcore battle. . ."
"The current structure provides you with a path where you end up with unilateral absolute control over the AGI. You stated that you don't want to control the final AGI, but during this negotiation, you've shown to us that absolute control is extremely important to you. As an example, you said that you needed to be CEO of the new company so that everyone will know that you are the one who is in charge. . ."
"Specifically, the concern is that Tesla has a duty to shareholders to maximize shareholder return, which is not aligned with OpenAI's mission"
"During this negotiation, we realized that we have allowed the idea of financial return 2-3 years down the line to drive our decisions . . . this attitude is wrong"
"i remain enthusiastic about the non-profit structure!"
". . .apparently in the last day almost everyone has been told that the for-profit structure is not happening and he [Sam] is happy about this"
"Our goal and mission are fundamentally correct"
"We also have identified a small but finite number of limitations in today's deep learning which are barriers to learning from human levels of experience. And we believe we uniquely are on trajectory to solving safety (at least in broad strokes) in the next three years."
"Our biggest tool is the moral high ground. To retain this, we must: Try our best to remain a non-profit. AI is going to shake up the fabric of society, and our fiduciary duty should be to humanity. Put increasing effort into the safety/control problem, rather than the fig leaf you've noted in other institutions. It doesn't matter who wins if everyone dies. Related to this, we need to communicate a "better red than dead" outlook — we're trying to build safe AGI, and we're not willing to destroy the world in a down-to-the-wire race to do so."
"The sharp rise in Dota bot performance is apparently causing people internally to worry that the timeline to AGI is sooner than they’d thought before."
"This needs billions per year immediately or forget it."
"all investors are clear that they should never expect a profit"
"We saw no alternative to a structure change given the amount of capital we needed and still to preserve a way to 'give the AGI to humanity' other than the capped profit thing, which also lets the board cancel all equity if needed for safety. Fwiw I personally have no equity and never have."
That said, even though Altman is a shifty dude who's clearly playing a Game of Thrones while all others are playing Capitalism, I am extremely grateful that it's him running OpenAI and not Elon.
Seeing what Elon has done to Twitter, I shudder to think of what he'd do with ChatGPT. The level of reach and subtle influence he would have is insane. He could do with private chats what he's doing to public discourse, and it would all be invisible.
On the other hand, seeing what he's done with Grok, it's very likely OpenAI would be where xAI is and would never reach this level of adoption and influence. Which seems to be what most people at OpenAI were really worried about.
