Elon Musk has lost his lawsuit over OpenAI and ChatGPT

A U.S. jury has ruled against Elon Musk in his lawsuit against OpenAI (the company behind ChatGPT) and its CEO Sam Altman.

Musk, who co-founded OpenAI in 2015 before leaving its board in 2018, accused Altman and company president Greg Brockman of manipulating him into donating millions on the grounds that it would be a non-profit.

The company now has a for-profit arm.

After less than two hours of deliberation, the jury unanimously found Musk had waited too long to sue.

Context

In 2015, OpenAI said it was being set-up as a “non-profit artificial intelligence research company” with a goal “to benefit humanity as a whole, unconstrained by a need to generate financial return”.

Today, it has a for-profit arm under a non-profit parent company.

According to his lawsuit, Musk was the company’s largest early financial backer.

He says he donated $US44 million ($AU53 million) to OpenAI between 2016 and 2020, and also paid the rent for the company’s first San Francisco office.

ChatGPT

OpenAI began developing ChatGPT in 2018.

Its earlier models were publicly released alongside detailed research papers, which were in line with the company’s original commitment to openness and transparency.

In 2023, OpenAI launched its fourth generation model, GPT-4. However, unlike earlier models, OpenAI did not release GPT-4’s code publicly – a move Musk alleges “radically departed from their mission”.

Lawsuit

Musk had five main legal complaints:

He gave millions to OpenAI on the understanding it would stick to its original mission of building AI for the public good, which he argued changed when it kept the GPT-4 code private.
He relied on unofficial promises thatOpenAI would stay a non-profit.
Under California law, OpenAI had a duty to use his money for the company’s original charitable mission instead of commercial deals.

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OpenAI misled him by accepting his money on one set of terms, before changing to a different set of values.
Musk does not know how the money he invested was spent.

OpenAI alleges that by late 2017, Musk was open to making the company for-profit, but only if he got “majority equity, initial board control, and to be CEO”.

Brockman, Sutskever, Altman, and two other senior execs rejected the proposal, saying in a 2024 statement that at the time they believed “it was against the mission for any individual to have absolute control”.

Musk left OpenAI in February 2018 after he failed to convince the team to merge with his other company Tesla.

After he left, OpenAI set up a for-profit subsidiary under the non-profit.

Trial

Over three weeks, the court heard from Musk, Altman, Brockman, and Microsoft CEO Satya Nadella. (OpenAI partnered with Microsoft in 2019.)

Musk’s lawyers argued “the defendants in this case stole a charity,” while lawyers for OpenAI said the trial was only happening “because Mr Musk didn’t get his way.”

Musk was seeking up to $US150 billion ($AU209 billion) in damages, a court order forcing OpenAI back into a non-profit structure, and the removal of Altman and Brockman from their positions.

Verdict

Following two hours of deliberations, the jury unanimously found Musk had waited too long to sue, ruling his claims fell outside the three-year statute of limitations.

The court did not rule on whether his core allegations had merit.

Judge Yvonne Gonzalez Rogers confirmed the decision on the spot, dismissing all claims against OpenAI, Altman, Brockman, and Microsoft, which Musk had also sued for aiding OpenAI through investments totalling $US13 billion ($AU18 billion).

Responses

Speaking outside the courthouse, OpenAI’s lead attorney William Savitt called the verdict confirmation that the lawsuit was “a hypocritical attempt to sabotage a competitor.”

In a post to X, Musk wrote: “There is no question to anyone following the case in detail that Altman and Brockman did in fact enrich themselves by stealing a charity. The only question is WHEN they did it.”

Musk also confirmed that he would seek to appeal the decision.