Federal judge rules Elon Musk's OpenAI lawsuit can go to jury trial in March

A federal judge decided Wednesday that Elon Musk can take his claims against OpenAI to a jury, moving forward with accusations that the artificial intelligence company abandoned its original mission when it shifted to a profit-making business model.

The decision came from U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, who told the courtroom there was “plenty of evidence” indicating OpenAI’s leadership promised to keep the organization’s original nonprofit structure in place.

Musk helped start OpenAI back in 2015 but walked away from the company in 2018. He now operates his own artificial intelligence business that goes head-to-head with OpenAI in the marketplace.

Judge Gonzalez Rogers determined that too many facts remain in dispute for her to settle the matter on her own. Instead, she decided a jury should hear the case during a trial set for March. The judge plans to release a written decision later that will address OpenAI’s request to dismiss the entire case.

The legal fight unfolds against a backdrop of intense competition for control of the generative artificial intelligence industry. Musk’s company xAI and its chatbot product Grok are battling against OpenAI and other tech firms for market position.

Although he hasn’t stated how much, Musk wants the court to require OpenAI to compensate him. He characterizes this as recouping “ill-gotten gains” that the business unlawfully acquired.

Following the court session, OpenAI released a statement saying “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.”

When contacted for a response, xAI did not reply right away.

Claims focus on early funding and broken promises

According to Musk’s legal filing, he put in about $38 million during OpenAI’s early days, making up roughly 60% of the startup money. He says he also provided strategic advice and lent his reputation to the venture. He claims all this came with promises that the group would stay nonprofit and work for the good of everyone.

The case points fingers at OpenAI co-founders Sam Altman and Greg Brockman, saying they planned the for-profit transformation to make themselves wealthy. Musk’s lawyers cite multibillion-dollar agreements with Microsoft and a recent restructuring as proof.

OpenAI, along with Altman and Brockman, rejects these accusations completely. They have labeled Musk “a frustrated commercial competitor seeking to slow down a mission-driven market leader.”

Microsoft, named as another defendant, asked Gonzalez Rogers to throw out the claims against it. A Microsoft attorney argued no proof exists that the company “aided and abetted” OpenAI. Microsoft did not provide a comment when asked.

During Wednesday’s hearing, OpenAI’s legal team pushed for immediate judgment against Musk, arguing he failed to show sufficient facts supporting his allegations of fraud and contract violations.

OpenAI also maintains that Musk waited too long to file his lawsuit. The judge said the jury will need to decide whether the case falls outside the legal time limit for bringing such claims.

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