{"slug": "heres-why-elon-musk-lost-his-suit-against-openai", "title": "Here’s why Elon Musk lost his suit against OpenAI", "summary": "A jury reached a unanimous advisory verdict that Elon Musk sued OpenAI too late, leading a US District Judge to immediately accept that his claims are barred by the applicable statutes of limitations. The court found that Musk should have discovered the alleged breach of charitable trust and unjust enrichment by OpenAI’s leadership earlier than 2021 and 2022, respectively, making his 2024 lawsuit untimely. Musk has announced he will appeal the decision, arguing that the ruling was based on a \"calendar technicality\" rather than the merits of the case.", "body_md": "Here’s why Elon Musk lost his suit against OpenAI\nAfter three weeks of dueling testimony, the jury decided Musk sued the AI giant too late.\nOn Monday, the jury in Musk v. Altman dealt Elon Musk a major blow—reaching a unanimous advisory verdict that Musk sued OpenAI too late and, as a result, his claims are barred by the applicable statutes of limitations. US District Judge Yvonne Gonzalez Rogers immediately accepted it.\nMusk announced on X that he will be appealing the decision. “The judge & jury never actually ruled on the merits of the case, just on a calendar technicality,” he wrote.\nOpenAI was cofounded by Musk and a group of researchers in 2015 as a nonprofit with a mission to develop AI for the benefit of humanity, unconstrained by a need to generate financial returns. Musk donated $38 million to the company during its early days, allegedly based on the promise from OpenAI CEO Sam Altman and president Greg Brockman to keep the company a nonprofit committed to the mission.\nMusk brought two claims against OpenAI. First, he argued that Altman and Brockman breached the charitable trust he created through his donations by breaking their promise to keep the company a nonprofit and creating a for-profit subsidiary that ballooned over the years. Second, he argued that Altman and Brockman unjustly enriched themselves at Musk’s expense. He sued OpenAI in 2024.\nMusk asked the court to unwind OpenAI’s restructuring in 2025 that converted its for-profit subsidiary into a public benefit corporation and to remove Altman and Brockman from their roles.\nOpenAI argued that Musk waited too long to sue the company, and as a result, each of his claims is barred by the relevant statute of limitations. The statute of limitations on the breach of charitable trust claim is three years, while the statute of limitations on the unjust enrichment claim is two years. This means that Musk should have discovered, or had reason to discover, Altman and Brockman’s alleged breach of charitable trust no earlier than 2021 and their alleged unjust enrichment no earlier than 2022.\nWhile Musk argued he discovered that Altman and Brockman had broken their promise only in 2022, OpenAI claimed that Musk had reason to think this well before 2021.\nMusk told the jury that he has gone through “three phases” in his beliefs about OpenAI: In phase one, he was “enthusiastically supportive” of the company. In phase two, “I started to lose confidence that they were telling me the truth,” he said. In phase three, “I’m sure they’re looting the nonprofit.”\nHere’s a deeper dive into a timeline of the events as testified in the trial. You can read my dispatches from all three weeks of the trial here and here and here.\n2017: Musk proposed creating a for-profit subsidiary\nIn 2017, two years after OpenAI was founded, Musk and the other cofounders tried to create a for-profit subsidiary to raise enough capital to build artificial general intelligence—powerful AI that can compete with humans on most cognitive tasks. They fought a bitter power battle over who would get to control the entity. Musk also proposed merging OpenAI with his electric-car company Tesla.\nDuring the trial, OpenAI’s lawyers pressed Musk on these discussions, suggesting that Musk knew in 2017 about Altman and Brockman’s plans to pivot the company—and even participated in such plans—and had reason to sue then.\n“I was not opposed to there being a small for-profit that provides funding to the nonprofit,” Musk told the jury, “as long as the tail didn’t wag the dog.”\n2019: OpenAI creates a for-profit subsidiary with capped profits\nIn 2019, OpenAI created a for-profit subsidiary, under which employees and investors would receive a capped return on their investment. At the same time, the company secured a $1 billion investment from Microsoft. OpenAI argued that Musk again had reason to sue the company then.\nBut Musk testified that he didn’t think the move was violating the nonprofit’s mission. “If you’ve got a capped profit situation, it hasn’t violated the nonprofit’s goal,” Musk told the jury earlier in the trial. “There was no basis for me to file a lawsuit at that time.”\n2020: Microsoft snags an exclusive license\nIn 2020, when Microsoft secured an exclusive license to OpenAI’s GPT-3 model, Musk posted on X: “This does seem like the opposite of open. OpenAI is essentially captured by Microsoft.” OpenAI once again argued that Musk had reason to sue then.\nBut Musk testified that after reading the post, Altman reassured him that “OpenAI was staying on the mission as a nonprofit.” Musk said although he was skeptical, he still had no reason to sue the company at that point.\n2022: Microsoft prepares to invest $10 billion in OpenAI\nIt was only in 2022, Musk testified, that he discovered OpenAI had abandoned its nonprofit mission. At that time, Microsoft was preparing to invest $10 billion in OpenAI—a deal that closed in 2023.\n“I was disturbed to see OpenAI with a $20B valuation,” Musk texted Altman after reading the news. “This is a bait and switch.”\nMusk told the jury this was the moment that made him realize “the for-profit is the tail wagging the dog.” He thought Microsoft would give $10 billion only if it expected “a very big financial return.” He argued that this was the point he realized “OpenAI had become, for all intents and purposes, a for-profit company with a $20 billion valuation.”\n“The 2023 deal was different,” Steven Molo, one of Musk’s lawyers, hammered home during his closing argument.\nThe jury sides with OpenAI\nIt was up to the jury to decide whether the evidence supported Musk’s claim that he first realized in 2023 that OpenAI was no longer a nonprofit committed to its mission. In the verdict announced today, they found Musk did in fact have reason to think that he was being misled by Altman and Brockman before 2021. They did not address whether he was in fact misled.\nCourts often decide cases on procedural grounds like statutes of limitations when they can, because it can be the cleaner way to resolve a case than to grapple with its merits.\nMusk has said he will appeal the decision to the Ninth Circuit Court of Appeals, a federal appellate court that reviews decisions from district courts in California and other states.\nDeep Dive\nArtificial intelligence\nOpenAI is throwing everything into building a fully automated researcher\nAn exclusive conversation with OpenAI’s chief scientist, Jakub Pachocki, about his firm's new grand challenge and the future of AI.\nWant to understand the current state of AI? Check out these charts.\nAccording to Stanford’s 2026 AI Index, AI is sprinting, and we’re struggling to keep up.\n10 Things That Matter in AI Right Now\nMIT Technology Review's authoritative overview of the 10 technologies, emerging trends, bold ideas, and powerful movements in AI in 2026.\nMusk v. Altman week 1: Elon Musk says he was duped, warns AI could kill us all, and admits that xAI distills OpenAI’s models\nMusk kept his cool, and OpenAI’s lawyer bulldozed him with piercing questions about his motivations for suing the company.\nStay connected\nGet the latest updates from\nMIT Technology Review\nDiscover special offers, top stories, upcoming events, and more.", "url": "https://wpnews.pro/news/heres-why-elon-musk-lost-his-suit-against-openai", "canonical_source": "https://www.technologyreview.com/2026/05/18/1137488/elon-musk-suit-openai-verdict/", "published_at": "2026-05-19 00:53:10+00:00", "updated_at": "2026-05-19 01:00:05.558611+00:00", "lang": "en", "topics": ["artificial-intelligence", "policy-regulation", "startups", "venture-capital"], "entities": ["Elon Musk", "OpenAI", "Sam Altman", "Greg Brockman", "Yvonne Gonzalez Rogers"], "alternates": {"html": "https://wpnews.pro/news/heres-why-elon-musk-lost-his-suit-against-openai", "markdown": "https://wpnews.pro/news/heres-why-elon-musk-lost-his-suit-against-openai.md", "text": "https://wpnews.pro/news/heres-why-elon-musk-lost-his-suit-against-openai.txt", "jsonld": "https://wpnews.pro/news/heres-why-elon-musk-lost-his-suit-against-openai.jsonld"}}