A federal jury’s emphatic rejection of Elon Musk’s claims against Sam Altman and OpenAI cleared a major legal obstacle for the ChatGPT maker’s ambitious plans to become a trillion-dollar public company, but not without exposing deep tensions at the heart of the artificial intelligence boom.
The closely watched trial laid bare bitter power struggles inside OpenAI, allegations over Altman’s leadership and governance style, Musk’s own attempts to control the company during its early years, and unresolved questions about whether one of the world’s most influential AI firms still serves its original nonprofit mission or has become another Silicon Valley giant driven by commercial imperatives.
Meanwhile, some revelations raised questions over Altman’s credibility and OpenAI’s governance practices, which some experts said could influence the decisions of investors considering investing in the company.
The proceedings have also left lingering concerns around AI safety, accountability, corporate governance, and the growing concentration of power in a handful of private AI companies.
The verdict and the case
The California jury handed OpenAI and chief executive Sam Altman a decisive legal victory on Monday, rejecting Elon Musk’s claims that the ChatGPT maker abandoned its founding mission and unlawfully enriched itself through its shift toward a for-profit structure.
The unanimous verdict was delivered by a federal jury in Oakland after less than two hours of deliberation.
Musk, who co-founded OpenAI in 2015 before leaving the organisation, had accused Altman and OpenAI President Greg Brockman of betraying the startup’s founding nonprofit mission.
He sought roughly $150 billion in damages from OpenAI and Microsoft, arguing the money should be transferred to OpenAI’s nonprofit arm.
The jury ultimately sided with OpenAI, with jurors agreeing with arguments that Musk had waited too long to bring the lawsuit under California’s statute of limitations rules.
OpenAI’s legal team argued that Musk had known for years about the company’s plans to create a for-profit entity to attract the enormous funding required to build advanced AI systems.
The judge dismissed all remaining claims immediately after the verdict.
Musk responded swiftly on X, reiterating his criticism of Altman and Brockman.
“Altman & Brockman did in fact enrich themselves by stealing a charity. The only question is WHEN they did it!” Musk posted. “Creating a precedent to loot charities is incredibly destructive to charitable giving in America.”
He also confirmed plans to appeal the ruling.
Notable revelations from the trial
The three-week trial offered an unusually detailed look into the internal struggles, strategic disagreements, and personal tensions that shaped OpenAI’s evolution from a nonprofit research lab into one of the world’s most valuable AI companies.
OpenAI’s lawyers aggressively challenged Musk’s portrayal of himself as a defender of the nonprofit mission, instead presenting him as a figure motivated by control and competitive ambition.
Altman testified that Musk had at one stage sought a 90% stake in OpenAI and proposed folding the company into Tesla to secure the financial resources needed to compete in AI development.
Documents presented during the trial showed Musk explored merging OpenAI with Tesla in 2017 and 2018 and attempted to recruit key OpenAI researchers to his own ventures.
OpenAI’s legal team argued Musk only turned against the company after it achieved commercial success through ChatGPT, which transformed OpenAI into one of the most influential firms in technology.
That argument may complicate Musk’s appeal efforts because OpenAI maintained throughout the case that Musk himself once supported the very type of for-profit structure he later challenged in court.
The trial also highlighted Musk’s longstanding ambitions in artificial intelligence despite his repeated public warnings about the technology’s risks.
During testimony, Musk recalled discussions with Google co-founder Larry Page that helped motivate the creation of OpenAI.
Musk testified that he once asked Page what would happen if artificial intelligence wiped out humanity.
“He said that would be fine so long as artificial intelligence survives,” Musk told the court. “I said that was insane, that’s just crazy.”
Verdict boosts OpenAI’s path toward a public listing
The ruling is widely viewed as a major victory for OpenAI’s corporate restructuring plans and future fundraising ambitions.
The company has already been laying the groundwork for a possible IPO later this decade, with investors increasingly valuing the business as one of the defining companies of the AI boom.
Analysts said Monday’s decision removes a major source of uncertainty for investors and partners.
Dan Ives, analyst at Wedbush Securities, described the ruling as a major win for the company.
“This is a huge win for Altman and OpenAI despite the scrapes and bruises on Altman’s persona and leadership,” Ives said.
Sarah Kreps, professor and director of the Tech Policy Institute at Cornell University, said the verdict would likely reassure investors concerned about instability surrounding OpenAI’s structure and leadership.
“The decision is likely to reassure investors and the broader AI sector because it avoids a potentially chaotic outcome that could have challenged OpenAI’s commercial structure, Microsoft partnership, and future fundraising plans,” Kreps said in a The Guardian article.
She added that the case reflected the economic realities of modern AI development.
“Purely nonprofit models are difficult to sustain at the cutting edge.”
Wall Street had been closely monitoring the trial because Musk’s demands — including the removal of Altman as chief executive and a massive financial transfer to OpenAI’s nonprofit arm — could have complicated or delayed any future IPO.
“This verdict removes the single largest legal threat to a public offering,” James Rubinowitz, a trial lawyer and AI specialist, told Reuters.
Can dents on Altman’s credibility be a factor in OpenAI IPO?
Although OpenAI emerged victorious legally, the trial exposed internal criticism of Altman’s management style and decision-making.
Rubinowitz cautioned that the proceedings exposed damaging governance concerns that investors may continue to scrutinise.
“Even in victory, OpenAI walks away with the worst documentary evidence about its governance now permanently in the public record,” he said.
“Every institutional investor reading this trial transcript is doing their own credibility analysis on Altman before they buy in.”
Several former colleagues testified that Altman could be manipulative or misleading, with Musk’s legal team citing comments from eight witnesses who questioned his honesty.
Altman defended himself during cross-examination.
“I believe I am an honest and trustworthy businessperson,” he testified.
The proceedings also revealed documents detailing Altman’s investments in companies working alongside OpenAI, raising questions about potential conflicts of interest.
One of the most closely watched moments involved testimony from former OpenAI Chief Technology Officer Mira Murati.
In a 2022 memo presented during the trial, Murati criticised Altman’s leadership approach.
“The constant panic around our projects, people, goals etc generates chaos and churn,” Murati wrote.
“We talk about focus, but in practice our approach is do-everything and do it fast.”
In a recorded deposition shown to jurors, Murati hesitated when asked whether she believed Altman was honest by late 2023.
“Not always,” she said, adding that Altman sometimes undermined her work and encouraged divisions among executives.
While those revelations did not alter the verdict, analysts said they may still shape how investors view OpenAI’s governance ahead of any future public offering.
Questions over AI governance remain unresolved
Despite the legal outcome, many broader questions surrounding artificial intelligence remained unanswered.
Critics noted that the trial ultimately focused on procedural issues rather than the larger ethical and governance concerns surrounding OpenAI’s transformation.
Catherine Bracy, chief executive of Tech Equity, argued the ruling should not be interpreted as a broader endorsement of OpenAI’s conduct.
“Let’s not confuse the jury’s verdict with justice or accountability for the people of California,” she said in The Guardian article.
Kreps echoed similar concerns, arguing that many fundamental debates around AI governance remain unresolved.
“That the trial turned on a procedural issue about timing leaves a lot of questions and debates unresolved, like how these systems should be governed, and who benefits from them economically, and whether the pace of deployment is becoming disconnected from broader public comfort with the technology,” she said.
OpenAI continues to face multiple legal and regulatory challenges, including lawsuits related to intellectual property, consumer protection, and even wrongful death claims.
Legal scholars Alexandra Andhov and Ian Murray said the verdict addressed only timing, not the substance of Musk’s broader allegations.
“A verdict on a statute of limitations is a statement about timing, not purpose,” they wrote.
“It tells us when a complaint can be heard. It does not tell us whether the complaint was right.”
They added that the larger issue surrounding OpenAI’s identity remains unsettled.
“The larger question about whether OpenAI is a nonprofit dedicated to humanity or a corporation dedicated to its shareholders has now been deferred indefinitely — at least in a legal context,” they wrote.
“The public, however, will no doubt make up its own mind about a company now worth hundreds of billions of dollars.”
The post Verdict delivered, cracks exposed: OpenAI beats Musk in trial, but questions remain appeared first on Invezz
