Musk vs – Nine jurors in California are weighing breach of charitable trust, unjust enrichment, and aiding-and-abetting claims in Elon Musk’s lawsuit involving OpenAI and Microsoft.
The stakes are high for OpenAI, and the questions the jury is now wrestling with are anything but abstract.
Nine California jurors have begun deliberations in a case brought by Elon Musk against OpenAI’s co-founders Sam Altman and Greg Brockman. as well as Microsoft.. The trial has traced the arc of their breakup since 2018. including Altman’s firing and rehiring in 2023. when Microsoft played an unusually direct role.. Yet despite that broader history. the jury is ultimately tasked with deciding a set of narrower legal issues tied to how Musk says his money was used and what others knew about it.
At the center of Musk’s argument is a claim that OpenAI and its founders violated what he calls a charitable promise: whether Musk and the defendants agreed that his donations to OpenAI would serve a specific charitable purpose. rather than be used more generally by the organization’s nonprofit structure.
The jury is also considering whether Musk’s donations led to unjust enrichment, essentially whether the defendants used those contributions to benefit themselves through OpenAI’s for-profit activities instead of advancing charitable goals.
A third question asks about Microsoft: did Microsoft, through its dealings with OpenAI, know that Musk had placed specific conditions on his donations, and did it play a significant role in causing harm?
OpenAI’s defense, for its part, rests on both legal and factual disputes the jury will have to weigh carefully.
First comes statute of limitations.. OpenAI argues that if any harm Musk claims took place before certain dates. then parts of his suit are legally moot.. OpenAI says that for the first count. the relevant cutoff would be August 5. 2021; for the second count. August 5. 2022; and for another count. November 14. 2021.
OpenAI also argues that Musk’s timing was unreasonable. Musk filed his lawsuit in 2024, and the defense contends that the delay made his request for damages unjust.
There is a further defense under the legal doctrine of unclean hands, which in general terms can bar claims if the claimant’s own conduct is found to be unconscionable in relation to the dispute.
What happens if Musk wins is not straightforward.. The trial could effectively end OpenAI’s status as a for-profit company, but the precise result is unclear.. A judge is expected to begin hearings next week in which lawyers from both sides will debate what consequences might follow from a verdict for the plaintiffs.. Those proceedings could be rendered moot if the jury returns a negative verdict.
Breach of charitable trust
Musk’s lawyers say the defendants understood that he wanted to support a nonprofit mission focused on ensuring AI benefits the world, rather than allowing control by any single organization.
They point to what they portray as a turning point: a $10 billion investment by Microsoft into OpenAI’s for-profit affiliate in 2023.. Musk’s attorneys argue that this deal. coming after the limitations period. was different from earlier funding arrangements and showed that investors were enriched through OpenAI’s commercial products at the expense of the charitable mission Musk says he championed. particularly AI safety.
OpenAI disputes that premise, insisting that Musk’s donations were not subject to restrictions in the way Musk claims.. Its attorneys asked witnesses to describe any specific limitations on Musk’s donations. and they say none were described. including from Jared Birchall. Musk’s financial adviser; Sam Teller. his chief of staff; and Shivon Zilis. a special adviser.
OpenAI’s defense also says the people involved agreed that private fundraising would be required to accomplish their goals.. It further points to Musk’s own efforts outside the nonprofit structure. including attempting to launch an OpenAI-affiliated for-profit that he would personally control. and later trying to merge OpenAI into Tesla.. OpenAI notes as well that other donors have not claimed their charitable trust was violated.
A key piece of evidence described during the case came from a forensic accountant hired by OpenAI. who testified that Musk’s donations were used by OpenAI well before the relevant date of August 5. 2021.. OpenAI argues that this undermines the idea that a charitable trust was violated under Musk’s framing.
The defense also emphasizes that the for-profit affiliate doing most of OpenAI’s work continued to fulfill the organization’s mission and produced nearly $200 billion in equity value supporting the nonprofit foundation.. Altman. according to the defense case. argued that providing ChatGPT for free is part of fulfilling the mission of sharing AI’s benefits broadly.
Unjust enrichment
The plaintiffs’ unjust enrichment theory depends partly on what they view as the mismatch between the charitable mission and the outcome for founders and corporate partners.
Musk’s side points to the multibillion-dollar valuations of stakes held by OpenAI founders including Brockman and Ilya Sutskever. as well as Microsoft.. They say this indicates Musk’s donations ultimately benefited individuals and the commercial ecosystem around the company rather than advancing charity.
They argue that work carried out through OpenAI’s for-profit arm was commercially focused while the foundation was left effectively dormant, without full-time employees and without full control over the for-profit.
OpenAI counters with timing and structure.. It says all Musk contributions were used by the foundation by 2020. and that equity distributions came long after Musk left the organization in 2018.. Even before that. OpenAI’s lawyers point to evidence that key players agreed that the ability to compensate researchers with stock was important for developing artificial general intelligence. the hypothetical AI system capable of performing any intellectual task a human can.
OpenAI executives also say the for-profit’s work advanced the foundation’s mission, including safety work.. They claim the nonprofit board continues to control the for-profit and that new governance controls were instituted after what the court has referred to as “the blip.” In 2023. Altman was fired by OpenAI’s nonprofit board for lack of candor and then rehired just days later.
Aiding and abetting
Musk’s case against Microsoft takes shape around the events of the blip, when Satya Nadella, Microsoft’s chief executive, was personally involved in helping bring Altman back and creating a new board for OpenAI.
Musk’s attorneys argue that Microsoft’s involvement reflects a tension between commercial interests and the nonprofit’s purpose.. They note that Microsoft executives questioned whether their commercial agreement might conflict with the nonprofit’s goals and suggested that Microsoft’s priorities pushed OpenAI away from its mission.
They focus on a clause in Microsoft’s agreement with OpenAI that gives Microsoft veto rights over major corporate decisions at OpenAI.
Microsoft’s witnesses dispute the core intent and knowledge behind Musk’s allegations.. They say Microsoft executives did not know of any specific conditions on Musk’s donations. despite extensive due diligence. and that Microsoft never vetoed any OpenAI decision.. They also argue that Microsoft’s investments and compute resources enabled OpenAI’s biggest achievements.
Statute of limitations
Musk’s own narrative about when he began to believe he was betrayed is central to OpenAI’s arguments.
Musk suggested that his skepticism grew over time, and that by fall 2022 he believed his co-founders had betrayed him after he learned about Microsoft’s plans for a new $10 billion investment scheduled for 2023. He did not file suit until mid-2024.
OpenAI’s attorneys say the terms of that 2023 deal were set out in a term sheet for an earlier fundraising round in 2018 that Musk received and his advisers reviewed.. Musk testified he did not read it in detail.. OpenAI also points to blog posts and communications over the years that it says show Musk could have known what OpenAI was doing earlier. including tweets in which Musk criticized the company before the lawsuit.
The defense also says Zilis, Musk’s adviser, voted to approve those transactions as a member of the OpenAI board.
In its framing, OpenAI emphasizes that Musk’s formal role ended in 2018 and that his last donations took place in 2020.
Unreasonable delay
OpenAI argues that the real driver of Musk’s 2024 filing was a change in his view of the company after ChatGPT became a turning point for the artificial intelligence market.
It says OpenAI has operated under its current structure since Microsoft’s first investment in 2018. Forcing a restructure eight years later, OpenAI argues, is unreasonable.
Unclean hands
Finally, OpenAI raises the unclean-hands argument using evidence that Musk was planning competing AI efforts while still chair of OpenAI, including hiring OpenAI employees to work on AI at Tesla.
The defense says this undermined OpenAI at a time when it was using Musk’s donations toward its mission.. OpenAI also points to what it describes as non-disclosure by Zilis. who is described as the mother of three of Musk’s children. about her personal relationship to other OpenAI board members for years.
OpenAI further argues that Musk withheld his donations in 2017 in an attempt to win control of a planned for-profit affiliate of OpenAI.
Near the end of its case presentation, Bill Savitt, OpenAI’s lead attorney, told the jury: “Mr. Musk abandoned OpenAI for dead in 2018.”
For now. the dispute lands where juries do their work: with nine people deciding whether the legal elements of breach. enrichment. and aiding and abetting have been proven to the standard required in a courtroom. and what the consequences of their decision should mean for a company at the center of the AI industry.
OpenAI trial Elon Musk lawsuit Microsoft OpenAI charitable trust unjust enrichment AI governance