The jury’s speedy decision to reject Elon Musk’s lawsuit against the other founders of OpenAI and Microsoft confirmed what we saw in the courtroom: Musk’s case was a weak one, in part because he waited so long to file it.
Watching the closing arguments last week, OpenAI’s attorneys detailed point by point how the law was on their client’s side, while the plaintiff’s team focused on Sam Altman’s apparent lack of credibility and expressed disbelief that anyone would disagree with Musk’s accusations.
The final effect was that, after the verdict, some found it hard to believe Musk had lost — including the man himself. In a post he later deleted, Musk called Judge Yvonne Gonzalez Rogers a “terrible activist Oakland judge,” then announced his plans to appeal, declaring, “There is no question to anyone following the case in detail that Altman & Brockman did in fact enrich themselves by stealing a charity.”
But Altman and Brockman weren’t the only figures who benefited from OpenAI’s non-profit investments. As much as Musk and his legal team tried to make the trial about Altman, the proceedings revealed just as much about Musk.
One incident that came out in court showed Musk benefiting from OpenAI in an uncomfortably familiar way. Greg Brockman testified that in 2017, Musk asked him to bring a team of OpenAI researchers down to Tesla’s headquarters to help with the autopilot team for a few weeks. “It was pretty clear that was not something we could say no to,” Brockman said.
Brockman described taking a team of leading scientists, including Andrej Karpathy, Ilya Sutskever, and Scott Gray, to consult with the “demoralized” Tesla workers. They helped come up with ideas to improve the vehicle’s self-driving technology, with Sutskever telling the team that if they could find 10,000 images of a tricky corner case, they would be able to fix their software. Musk even asked Brockman to recommend employees to fire, which he declined to do.
Another person familiar with the episode confirmed Brockman’s account and said Tesla did not reimburse OpenAI for the time and effort of its employees. Musk’s family office, Excession, didn’t reply to a request for comment.
The heart of Musk’s case is that Altman, Brockman, and OpenAI committed a “breach of charitable trust” — that Musk donated funds for a specific charitable purpose, and his co-founders instead used them for something else. He also accused them of “unjust enrichment” due to stock and other benefits from OpenAI’s for-profit.
In the case of the OpenAI scientists parachuting into Tesla, Musk’s charitable donations were intended to hire scientists focused on securing the benefits of AGI. Instead, he had them work for free at his for-profit company.
Dorothy Lund, a Columbia Law School professor and the co-host of the Beyond Unprecedented podcast, told TechCrunch that this arrangement wouldn’t be legal, calling it “a bit rich for Musk to be suing for breach of a charitable trust, when he appears to have been redirecting assets in a way that was inconsistent with that mission.”
It’s true that the self-driving work involved artificial intelligence, but witnesses for Musk emphasized that Tesla’s self-driving project was very different from OpenAI’s research agenda. That’s in part because Karpathy left OpenAI for Tesla shortly after this incident. OpenAI’s attorneys portrayed the departure as Musk violating his duty to the lab, where he was co-chair of the board, by recruiting one of its key researchers to his own company.
The other fact that no doubt influenced the jury was the amount of time Musk spent trying to gain sole control of a potential OpenAI for-profit affiliate in 2017. Musk deployed good cop, bad cop tactics in an attempt to convince his co-founders to let him have total control of OpenAI’s for-profit affiliate — giving them free Teslas and threatening to withhold his donations.
His efforts put his attorneys in a tricky spot, facing a need to convince the jury there was a significant difference between what Musk envisioned and the for-profit that was ultimately created. They suggested a “small adjunct” for-profit would be permissible, though OpenAI’s witnesses showed non-profits with large commercial arms are common.
Indeed, there’s a very plausible counter-factual where Musk took one of the offers his co-founders made to split their equity more evenly, and finds himself today as one of OpenAI’s largest shareholders — just not the controlling one. But several times during the trial, Musk’s associates testified that he refuses to invest in any business he could have sole control over.
The failure of Musk’s claims because he filed them too late has been cited as a technicality, but the statute of limitations has substance behind it: People and businesses make important decisions and spend resources based on their understanding that what they are doing is permissible. If someone like Musk waits too long to sue, then the cost of unraveling all those decisions can outweigh a just reimbursement.
No members of the jury have spoken about how they arrived at their verdict. However, they were asked to consider if, before August 5, 2021, Musk should have known that OpenAI was spending resources outside its mission or launching a for-profit affiliate. The answer to that is clear: Musk himself was doing those things.
Elon Musk’s claim that he was mistreated by his OpenAI co-founders failed after nine California jurors returned a unanimous verdict that his lawsuits had been filed too late.
Musk accused Sam Altman, Greg Brockman, OpenAI, and Microsoft of “stealing a charity” by creating a for-profit affiliate of the frontier AI lab. Jurors, however, found that any harms that Musk may have suffered came before the deadline for filing his claims under the law.
While the trial delved deeply into the melodramatic history of OpenAI and featured testimony from leading figures in Silicon Valley, it ultimately turned on fairly narrow questions of the law. The trial focused on whether and when Altman and the other defendants had made and broken promises to Musk, but his case failed to convince jurors that he had a valid claim.
In particular, OpenAI had advanced a statute of limitations defense, which sought to prove that any harms Musk sought to litigate had taken place before 2021. (The specific date varied by the charge: before August 5, 2021, for the first count; August 5, 2022, for the second count; and November 14, 2021, for the third count.) Ultimately, the jury found that argument persuasive, which made for a short deliberation period.
“There was a substantial amount of evidence to support the jury’s finding, which is why I was prepared to dismiss on the spot,” Judge Yvonne Gonzalez Rogers said after the verdict was delivered.
The end of the case means that one major threat to OpenAI — a possible restructuring — is now off the table ahead of its reported IPO.
“It did not take [the jury] two hours to conclude … that Mr. Musk’s lawsuit is nothing more than an after-the-fact contrivance that bears no relationship to reality,” OpenAI’s lead attorney, Bill Savitt, said after the verdict. “They kicked it exactly where it belongs — just to the side. This lawsuit is a hypocritical attempt to sabotage a competitor.”
Microsoft, which Musk sued for aiding and abetting OpenAI’s alleged breach of charitable trust, welcomed the verdict. A spokesperson for the company said it “remained committed to our work with OpenAI to advance and scale AI for people and organizations around the world.”
The verdict came in the middle of a hearing to determine the potential damages to Musk if the verdict had gone the other way. While that discussion is moot for now, the judge appeared unconvinced by the analogy Musk’s lawyers drew between his charitable contributions and investments in a for-profit startup.
“Your analysis seems to be devoid of connection to the underlying facts,” she told Dr. C. Paul Wazzan, the expert who came up with Musk’s estimate of OpenAI and Microsoft’s wrongful gains at his expense — some $78.8 billion to $135 billion.
Reached for comment by TechCrunch, Musk’s lead counsel, Marc Toberoff, said, “One word: Appeal.”