A federal judge in Oakland, California, on Thursday rejected requests by OpenAI and Microsoft to dismiss claims by Musk and ordered the case to proceed to a jury trial set for late April. Musk helped Altman and others launch OpenAI in 2015 and went on to found his own artificial intelligence company in 2023.
“Mr. Musk’s lawsuit continues to be baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating this at trial,” OpenAI said in a statement. “We remain focused on empowering the OpenAI Foundation, which is already one of the best resourced nonprofits ever.”
In her ruling, US District Judge
She wrote that while the evidence is unclear, Musk claims that his contributions to OpenAI “had a specific charitable purpose and that he attached two fundamental terms to it: that OpenAI be open source and that it would remain a nonprofit — purposes consistent with OpenAI’s charter and mission.”
Rejecting an argument by OpenAI, the judge found that Musk’s use of an intermediary to donate $38 million in seed money to the startup doesn’t strip him of legal standing to try to enforce those conditions.
“Holding otherwise would significantly reduce the enforcement of a large swath of charitable trusts, contrary to the modern trend,” she wrote.
The judge also refused to toss out Musk’s fraud allegations, pointing to emails and private notes of OpenAI co-founder
According to the ruling, two months later, in a private note, he wrote: “cannot say that we are committed to the non-profit. don’t want to say that we’re committed. if three months later we’re doing b-corp then it was a lie.”
Gonzalez Rogers said it will be up to the jury to decide whether Microsoft helped OpenAI breach its responsibilities to donors, like Musk.
“Here, Musk identified considerable evidence raising a triable issue of fact that Microsoft had actual knowledge beyond vague suspicion of wrongdoing,” she wrote.
But the judge rejected Musk’s claim that Microsoft “unjustly” enriched itself at his expense. In order to do so, Musk would have had at least a “quasi-contractual relationship” with Microsoft, she said.
“Nor did Musk cite any evidence or allege any facts to support finding that Microsoft’s retention of any benefit was unjust,” the judge wrote.
Musk’s lawyer, Marc Toberoff, and representatives of Microsoft didn’t immediately respond to requests for comment.
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OpenAI, the maker of ChatGPT recently valued at $500 billion, announced its restructuring in October. It said at the time that it had given a 27% ownership stake to its longtime backer Microsoft in a transition that will keep the startup’s nonprofit arm in control of its for-profit operations.
The transition of OpenAI to a public benefit corporation fulfilled Altman’s long-held objective as its chief executive officer.
Musk and Altman, one-time business partners turned bitter foes, have feuded in court over the future of OpenAI since 2024. Musk’s xAI has become one of OpenAI’s main rivals. Last year, OpenAI rejected Musk’s unsolicited bid to acquire the assets of the nonprofit that controls the company for $97.4 billion.
Altman has denounced Musk’s lawsuit challenging the OpenAI restructuring as a weaponization of the legal system to slow down a competitor.
(Updates with judge’s findings on claims against Microsoft starting in 10th paragraph.)
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Peter Blumberg, Steve Stroth
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