Elon Musk’s claim that he was mistreated by OpenAI’s founders has failed after nine California jurors unanimously ruled that his lawsuits were filed too late.
Musk accused Sam Altman, Greg Brockman, OpenAI, and Microsoft of “stealing charity” by creating a for-profit subsidiary of the Frontier AI Laboratory. However, jurors found that any damages Musk may have suffered came before the deadline to file his claims under the law.
While the trial delved into OpenAI’s melodramatic history and featured testimony from prominent Silicon Valley figures, it ultimately turned to rather narrow questions of law. The trial focused on whether Altman and the other defendants made or broke promises to Musk, but his case failed to convince jurors that he had a valid claim.
In particular, OpenAI filed a statute of limitations, which sought to show that any damages Musk sought to sue occurred before 2021. (The exact date varied by count: before August 5, 2021 for count one, August 5, 2022 for count two, and November 14, 2021 for count three). In the end, the jury found this argument convincing, cutting it short. Deliberation period.
“There was a significant amount of evidence to support the jury’s conclusions, which is why I was prepared to dismiss immediately,” Judge Yvonne Gonzalez Rogers said after the ruling.
The end of the case means that one of the main threats facing OpenAI – a potential restructuring – is now off the table ahead of the announced IPO.
“It didn’t take [the jury] “Two hours to conclude… that Mr. Musk’s lawsuit is nothing more than an after-the-fact stunt that has nothing to do with reality,” Bill Savitt, OpenAI’s lead attorney, said after the ruling. “They kicked it exactly where it belongs – just to the side.” “This lawsuit is a hypocritical attempt to sabotage a competitor.”
Microsoft, which Musk sued for aiding and abetting OpenAI’s alleged breach of charitable trust, welcomed the ruling. A company spokesperson said it “remains committed to our work with OpenAI to develop and scale AI for people and organizations around the world.”
The ruling came in the middle of a hearing to determine the potential damages that Musk might suffer if the ruling went the other way. While that discussion remains moot at the moment, the judge seemed unconvinced by the analogy drawn by Musk’s lawyers between his charitable contributions and his investments in a for-profit startup.
“Your analysis seems devoid of connection to the underlying facts,” she told Dr. Paul Wazzan, the expert who came up with Musk’s estimate of OpenAI and Microsoft’s ill-gotten gains at his expense.
In a tweet after the ruling, Musk appeared to cast the procedural reasons for the dismissal as a moral victory. “There is no doubt to anyone following the case in detail that Altman and Brockman did indeed enrich themselves by robbing a charity. The only question is when they did it!” Musk wrote. “I will appeal to the Ninth Circuit, because creating a precedent for plundering charities is incredibly damaging to charitable giving in America.”
When contacted by TechCrunch for comment, Mark Toberoff, Musk’s lead lawyer, said, “One word: appeal.”
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