Elon Musk's Lawsuit Against OpenAI Dismissed by Jury Due to Statute of Limitations

On May 18, a federal jury in Oakland, California, unanimously dismissed all claims in a lawsuit filed by Elon Musk against OpenAI, its CEO Sam Altman, co-founder Greg Brockman, and Microsoft. The nine-member jury determined that Musk’s lawsuit was barred by the statute of limitations. The trial began at 8:30 a.m., and the verdict was reached in less than two hours, at 10:23 a.m. Judge Yvonne Gonzalez Rogers promptly accepted the verdict as her final ruling.

Musk had sought approximately $130 billion in damages from OpenAI’s nonprofit arm, the removal of Altman and Brockman from the organization’s leadership, and the dismantling of OpenAI’s for-profit operations, which have transformed it into a company now valued at $852 billion. However, the jury prioritized the issue of the statute of limitations and did not delve into whether Altman and Brockman had violated their obligations to OpenAI’s original nonprofit mission.

The crux of the trial revolved around when Musk became aware of the issue. Under California law, claims related to charitable trusts are subject to a three-year statute of limitations, while claims involving unjust enrichment have a two-year limit. Musk testified that he refrained from filing the lawsuit earlier because he had trusted Altman’s explanations over the years. However, he stated that he became convinced the nonprofit had been “hijacked” only in 2023, when Microsoft invested $10 billion in OpenAI’s for-profit division.

In response, OpenAI’s attorneys argued that Musk was aware of the shift to a for-profit model as early as 2017 and had even registered a company resembling OpenAI’s for-profit arm through his family office. Judge Gonzalez Rogers noted after the verdict, “There was substantial evidence supporting the jury’s decision, and I was prepared to dismiss the case immediately.”

Although Musk’s legal team has reserved the right to appeal, the judge suggested that an appeal may face significant challenges, as the statute of limitations is considered a matter of fact, not law. With this decision, OpenAI has overcome a major legal hurdle in its transition from a nonprofit organization to a for-profit public benefit corporation.

In March, OpenAI secured $122 billion in funding, including investments of $30 billion from Nvidia, $50 billion from Amazon, and $30 billion from SoftBank. The company’s valuation has reached $852 billion, and it is reportedly considering an IPO in the fourth quarter of 2026. However, analysts at PitchBook have indicated that the timeline could extend into 2027, citing cost structures and long-term infrastructure investments estimated at $1.15 trillion.

This ruling brings closure to a prolonged legal dispute over OpenAI’s transition to a for-profit model. As the AI industry continues to evolve rapidly, the dismissal of Musk’s lawsuit allows OpenAI to focus more fully on its fundraising and business expansion efforts. However, questions remain about whether Musk will pursue an appeal and how OpenAI’s governance will evolve moving forward.