Elon Musk loses lawsuit against OpenAI

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A jury on May 18 ruled against Elon Musk in a lawsuit against OpenAI, ruling that the artificial intelligence company cannot be held liable to the world’s richest man for allegedly straying from its original mission of benefiting humanity.

In a unanimous verdict, a jury in federal court in Oakland, California, said Musk filed his lawsuit too late. The jury deliberated for less than two hours.

The trial was widely seen as a seminal moment for the future of OpenAI and artificial intelligence in general, in terms of how it should be used and who should benefit from it.

After the ruling, Musk’s lawyers said they were reserving the right to appeal, but the judge suggested they could face an uphill battle because it is a question of fact whether the statute of limitations ran out before Musk filed his lawsuit.

“There is a substantial amount of evidence supporting the jury’s verdict, which is why I was prepared to dismiss it on the spot,” said U.S. District Judge Yvonne Gonzalez Rogers.

Musk’s 2024 lawsuit accused him of manipulating OpenAI, its CEO Sam Altman, and president Greg Brockman into donating $38 million, then adding a for-profit business to the original nonprofit behind his back and receiving tens of billions of dollars from Microsoft and other investors.

Musk called the OpenAI defendants’ actions “theft of charity.”

OpenAI was founded in 2015 by Altman, Musk, and several others. Musk stepped down from the board in 2018, and OpenAI formed a for-profit business the following year.

People are using AI for a variety of purposes, including education, facial recognition, financial advice, journalism, legal research, medical diagnosis, and harmful deepfakes. Many have expressed distrust of the technology and fear that it will put people out of work.

The verdict came after 11 days of testimony and arguments in which Musk and Altman’s credibility came under repeated attack.

Both sides accused the other of being more interested in money than serving the people.

In closing arguments, Musk’s lawyer, Stephen Moro, reminded jurors that several witnesses had questioned Altman’s candor or branded him a liar, and that Musk did not give an unconditional “yes” when asked during the trial if he could be completely trusted.

“Sam Altman’s credibility is in direct question,” Moro said. “If they don’t believe in him, they can’t win.”

Musk accused OpenAI of seeking to unjustly enrich investors and insiders at the expense of nonprofits, and of not prioritizing the safety of its AI. He also claimed that Microsoft knew all along that OpenAI was more about money than being altruistic.

OpenAI countered that it was Mr. Musk who saw the dollar signs and took too long to argue that OpenAI violated its founding agreement to build secure artificial intelligence that benefits humanity.

“Mr. Musk may have a Midas-like touch in some areas, but not when it comes to AI,” William Savitt, an attorney for OpenAI, said in closing arguments.

OpenAI competes with AI companies such as Anthropic and xAI, and is preparing for an initial public offering that could value the business at $1 trillion.

A Microsoft executive testified that Microsoft has spent more than $100 billion in partnership with OpenAI.

Musk’s xAI is now part of his space and rocket company SpaceX, which is preparing for an IPO that could surpass OpenAI’s size.

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