Jury Tosses Musk's OpenAI Lawsuit on Timing

A federal jury in Oakland took less than two hours on Monday to throw out Elon Musk's lawsuit against OpenAI and CEO Sam Altman. The decision was unanimous and the judge accepted it immediately. Musk will appeal, but for now, his three-year legal campaign against his former partners is on hold. The verdict did not address whether OpenAI broke its founding promises. It addressed when Musk should have known. Under California law, the claim that Altman and co-founder Greg Brockman breached a charitable trust had a three-year filing window. The unjust enrichment claim had two years. The jury found that Musk had reason to suspect a breach well before 2021, which made his 2024 lawsuit too late. Musk had argued he only realized OpenAI had become a de facto for-profit company in 2022, when Microsoft was preparing a $10 billion investment at a $20 billion valuation. His lawyers called it a "bait and switch." OpenAI's lawyers pointed to earlier signals: a 2017 internal fight over control of a proposed for-profit unit, the 2019 creation of a capped-profit subsidiary, and a 2020 post from Musk himself saying OpenAI was "essentially captured by Microsoft." The jury sided with OpenAI's timeline. What was actually at stake was enormous. Musk sought to claw back as much as $134 billion in what he called ill-gotten gains, have Altman and Brockman removed from their roles, and unwind OpenAI's 2025 restructuring that converted it into a public benefit corporation with its nonprofit foundation holding a controlling equity stake worth roughly $130 billion. None of that will happen now, barring a successful appeal to the Ninth Circuit. OpenAI completed that restructuring in October 2025 after nearly a year of negotiations with attorneys general in California and Delaware. The nonprofit foundation retained control and holds a 26 percent equity stake in the new for-profit entity. Microsoft received a 27 percent stake. The structure gave OpenAI the ability to raise unlimited capital from outside investors, removing the capped-return model that had governed it since 2019. The commercial trajectory since then has been steep. OpenAI raised $122 billion in March 2026 at an $852 billion valuation, backed by Amazon, Nvidia, and SoftBank. Revenue is running at roughly $2 billion per month. The company is still unprofitable and does not expect to turn a profit until around 2030, but it is targeting an IPO as early as late 2026. A Musk victory could have forced a complete structural reversal and made any IPO impossible. That threat is now, at minimum, deferred. The competitive backdrop makes the timing of the verdict striking. Musk's own company, SpaceX, which absorbed his AI startup xAI in a February merger valued at $1.25 trillion, has filed IPO paperwork and is targeting a first day of trading on June 12 at a valuation above $1.75 trillion. That would make it the largest IPO in history. Both Altman and Musk are heading toward public markets at the same time, with competing AI products and now resolved, at least temporarily, legal hostilities. OpenAI's lawyers framed the lawsuit throughout the trial as a competitive maneuver: Musk lost a power struggle inside OpenAI in 2018, started a rival AI lab in 2023, and then sued once that rival needed to be slowed down. The jury never had to rule on that framing directly, but the speed of their deliberations suggests they found OpenAI's version of the timeline more credible. Musk will argue on appeal that the statute of limitations question was decided incorrectly. What he cannot argue is that the merits of his case were heard and rejected. They weren't heard at all.