Musk lost today because the jury found that he waited too long to bring his claims. The jury answers only yes/no questions, so we do not know their exact thoughts, but it is likely they determined that the 2019 and 2021 Microsoft deals were too similar to the 2023 Microsoft deal that was the centerpiece of Musk’s lawsuit. Musk could have brought the same lawsuit in 2019 or 2021, meaning his claims were untimely for the 3 year statute of limitations.
Because the statute of limitations is a precondition, the jury was not asked to find any other facts. They may tell the press what they thought on other issues, or they may not.
The judge was prepared to immediately accept the jury’s finding, and said she agreed that the jury’s decision was supported by the evidence.
It is possible for Musk to appeal, but success is vanishingly unlikely. Whether Musk’s claims are barred by the statute of limitations is a quintessential question of fact, and appellate courts are extraordinarily deferential to factual findings by juries so as a practical matter it’s almost impossible to appeal this verdict.
If I had been on the jury, I would have found against Musk on every point.
His lawyers created a “3 phases of doubt” to try and sidestep the statute of limitations, but it was clearly bogus and he was on notice of OpenAI creating a for-profit in 2019.
Musk was perfectly happy to have OpenAI be a for-profit, a non-profit with an attached for-profit (the current structure), or even just absorbed into Tesla. His complaints fell flat for me given the number of emails where he said that a non-profit was likely a mistake.
This is technical, but Musk clearly never created a charitable trust, which was a precondition for his claims. His funds were donated for general use by OpenAI, not for any specific use that would allow him to claim breach of charitable trust. Also, all of his funds were spent by no later than 2020 which is before his alleged breach in 2023.
Musk unreasonably delayed bringing this case until the success of ChatGPT and starting a competing AI company, and he had unclean hands because he attempted to sabotage OpenAI repeatedly by poaching its key staff while on the board.
So the question before the jury has a significant component of "Should he have found out by this time?" Which is a question of fact, and facts are typically decided by juries, in the US at least.
The two parties can agree together to let a judge decide facts like this, but generally, if one or the other party wants it to go to a jury, it does.
I'm guessing part of Musk's strategy was to have it go to the jury, which are often seen as easier to manipulate than judges, especially when a case is weak. Or perhaps his team already knew this particular judge would be inclined to rule against him, so did the next best thing.
That's what the jury found against - they said he was reasonably informed enough to have brought the suit earlier and thus the 3 year clock should start ticking in 2020 not 2023.
In this case I guess the question was 'when did the incident actually happen' with Elon arguing it was later then Altman.
I can understand why people and me included might think they can decide this before trial.
So not being within the statute of limitations is typically a legal issue so what must've happened here is the jury would've been asked if the earlier OpenAI-MS deals were substantially similar to the latest deal. I can't find the verdict form or the jury instructions but I'll bet that was the key issue the jury decided.
Why is a hypothetical ground for this decision? "You didn't complain immediately the first time you got robbed, therefore all the robbing since then is covered by a statute of limitation".
This case demonstrates why. Musk only complained after OpenAI was commercially successful with ChatGPT and after he started a competing effort. He repeatedly said “I do not know” and “I do not recall” on the stand, and argued that the passage of time made it hard for him to remember facts that would have been helpful for OpenAI.
"If the jury determines that at any time before those dates, Musk either knew — or had or should have known — that he had a claim that he could bring, then his suit was brought too late. The consequence of being too late is swift and absolute. If the lawsuit was filed late for a particular claim, that claim is out of the case; if it was too late for all of Musk’s claims, the lawsuit is over."
That's where the question of fact (i.e., the requirement for a jury decision) came in: "What was the statute of limitations?" is a question of law, but "When should Musk have known that OpenAI was moving too much toward for-profit?" is a question of fact (and, here, determines whether the statute of limitations applies).
1. Estoppel. If a party relies on your conduct then you can lose the right to sue over it;
2. Laches. This is a defense against prejudicial conduct, typically by waiting too long to take action;
3. Waiver. Your conduct can waive your right to sue. Imagine you live with someone and they don't pay half of the rent so you cover it. At some point your continued conduct means you lose the right to sue; and
4. The statute of limitations. Some claims simply have to be brought within a certain period. How this applies can be really complex. For example, we saw this in Trump's fraud convictions in New York. His time in office, away from the jurisdiction, essentially suspended the statute of limitations.
Some crimes like murder have no statute of limitations. Others have unreasonably short statutes of limitations. For example, probably nobody can be charged in relation to sex trafficking in the Epstein saga because the statute of limitations is often 5 years with such crimes. This is unreasonable (IMHO) because often the victims are children and unable to make a criminal complaint.
It's also worth adding that not all legal systems have such wide-ranging statutes of limitation as the US does. Founding principles of those other legal systems is that the government shouldn't be arbitrarily restricted for prosecuting criminal conduct. The US system ostensibly favors "timely" prosecution.
Shouldn't the defense have raised the statute of limitations much earlier?
I wonder if the government or taxpayers have a case to bring regarding that.
The attorneys general of California and Delaware could challenge that 2019 IP transfer if they so wished on behalf of the public.
The issue is that they did R&D as a charity, donations to which are tax deductible, there may also be other benefits to being a charity during R&D but that’s a big one, then once the thing works, setup a for profit, sell ip at “fair value”, get some investment, then things are ready for business.
I read there’s no statute of limitations on a tax issue like this, so I guess it might be hanging over them indefinitely.
I’m not a big taxation and government fan, they’d probably just waste the money anyways. It does seem unfair OpenAI gets to use this loophole though, unless all companies can make their R&D investment tax deductible, and get any other benefits of this setup.
There is no loophole here.
> Early Angels (Reid Hoffman, Peter Thiel, and others): Approximately $10 million invested, current value $1.4 billion. That corresponds to a return of around 140x.
Only people who are pretending to be confused are people for whom it's in their interest to be confused.
They created a non-profit with the intention of launching AI to make sure that it would stay in the public trust, and then once it became really valuable, they spirited it away into private hands.
It's just a fact. It's obvious from looking at the thing. The details are designed to confuse and trick you into thinking that what you can plainly see happening is OK somehow.
If it had been a for-profit company contributing assets to another for-profit company, the transaction would not have had any different tax consequence.
(This is just a thought IANAL)
There is no counter factual where OpenAI exists as a non-profit and still inexplicably gets handed billions of dollars of compute to train LLMs. The for-profit company is a different thing from the non-profit and it exists for perfectly understandable reasons and I'm unsure why anyone other than Elon Musk pretends this doesn't make sense.
What is your proposed counter factual where the non-profit entity retains all ownership of the venture, but somehow finds hundreds of billions of dollars to train LLMs?
Having thought about this whole thing more I believe that non-profits should not be a separate type of entity that gets special tax treatment. People have different ideas of what constitutes legitimate non-profit activity. It just opens things up for tax avoidance and scams.
So I take that to mean Musk wanted a settlement as primary goal, and that the threat to OpenAI's reputation was just an (unsuccessful) means to get what he wanted. That isn't to say it wasn't personal for Musk, just that he would have preferred to have gotten paid.
As to Musk texting "By the end of this week, you and Sam will be the most hated men in America. If you insist, so it will be" when the settlement offer was turned down, while I'd agree there were a ton of super embarrassing details that came out I don't think Musk was successful in making them more hated than even he is. I don't even think this secondary goal was successful, even though there were a ton of juicy bits.
I think regardless it would be extremely hard for him to make people hate Altman et al. more than himself. Altman's flaws are more subtle and require paying attention to a pattern of behavior. Musk has beem pure cringe for 5+ years now.
My friend had no idea who he was. My friend doesn’t work in tech but he’s in his late 20s and we are both British so I was quite surprised. My guess is most of the world has no idea who these people are, despite their influence they are very niche celebrities.
Maybe Sam is more famous but I’d guess ~no one knows Greg Brockman.
So I find “most hated men in America” quite dramatic!
Isn't this blackmail?
Sometimes rich, powerful people do stuff that's irrational. When you see Trump attack Iran and you think "this doesn't appear to make sense," you can reason "there must have been secret intelligence proving that Iran was about to nuke Israel because otherwise it was a stupid move," or you can reason "it didn't make sense because it was a stupid move."
Really comes down to what you think his primary motivation is and what are just benefits.
Judging by the sheer number of journalistic investigations into OpenAI and the number of accounts of former employees, I would have expected that OpenAI being chaotic and poorly run is common knowledge by now and the lawsuit doesn't add much more to it.
I don't think it's a coincidence he didn't bring this suit until after the Altman ouster debacle. Discovery was probably the real objective all along.
I'm sure his lawyers told him he wasn't likely to win, so have to assume embarrassment of OpenAI was the goal.
Why do you have to assume that?
If anyone is/was truly still wronged by OpenAI changing corporate structure they are still able to sue and prove damages. Yet surprisingly no one has come forward on this.
Sol Roth
It's not theft unless a jury says it is, they didn't say it is.
2. This has nothing to do with the case which was just Musk trying to punish his competitor.
I do not think that your second was correct.
One wonders on what grounds?
In the UK, in a civil case like this, the judge I think comments on the likelihood of an appeal avenue once the verdict has been reached.
Never. That never ever happens.
Whereas no appeal is effectively him getting fired.
They'll do it, because that's what Elon Musk wants them to do and he's paying them and they want his other business, but this isn't what gets them up in the morning.
I'm sure people in the US are in no mood to take any advice from us here in the UK, having just recently abolished the right to a jury trial.
There are some exceptions to this, but they are rare and usually only employed in extreme situations (aka things which would get the lawyers involved debarred).
Invent a time machine; send a lawyer back to file a new lawsuit within the statute of limitations.
You can try to file it again, but that gets to the point where the judge can throw your ass directly in jail for 30 days, do not pass go, do not collect 200 dollars.
But (at least in the US), the appeals court does not have to accept your appeal. When you file the appeal, you have to give them enough reason for them to even listen to your appeal, instead of rejecting it from the first filing.
[0] Assuming that the trial judge didn't materially screw up in admitting or excluding evidence, or in instructing the jury about the law, and also assuming no proof of juror bias or improper influence.
It's a foundational issue that goes to whether the court is even allowed to proceed with the case. A defendant could be guilty/liable/whatever of the alleged claims, and it wouldn't matter. If the statute of limitations has run, they're in the clear.
The only counter to an SOL defense is to try and claim that the SOL was paused for some reason, but those exceptions are very narrow and wouldn't apply here (and in the real world very rarely apply to civil cases).
Or the "I Forgot It Was Tuesday" argument?
Musk is an idiot
Lawyers will be happy to take more of his money
https://www.technologyreview.com/2026/05/18/1137488/elon-mus...
e.g the twitter thing - forced to buy when he didn't want.
As means to buy an election an Presidency: highly efficient use of capital with an undeniable short and long-term ROI.
What he didn't need to do was alienate his existing customers by acting like he enjoyed it. Did he actually think he was going to sell a lot of EVs to Trumpers?
I personally hold to the idea that whoever at SpaceX crafted the team used to pre-occupy Musk and keep him entertained while the rest of the company worked, is largely responsible for its success.
Regarding the OpenAI case, the judge & jury never actually ruled on the merits of the case, just on a calendar technicality.
There is no question to anyone following the case in detail that Altman & Brockman did in fact enrich themselves by stealing a charity. The only question is WHEN they did it!
I will be filing an appeal with the Ninth Circuit, because creating a precedent to loot charities is incredibly destructive to charitable giving in America.
OpenAI was founded to benefit all of humanity.
That seems unlikely to me given how divisive he is. OpenAI already had one existential leadership crisis without Musk. I doubt it would have fair better under his notoriously difficult leadership. If he had wrestled control away, I would expect an exodus of employees going to new companies.
1. 2019 capped-profit restructuring + 1B MSFT investment
2. 2023 Microsoft expansion / reported 75%-then-49% economics
3. 2024/2025 PBC restructuring
AFAIK it has not been reported as to exactly what the jury found, but IIUC the 2019 date is consistent with their findings.
That's poor for Musk, but it makes sense. He was arguing 2023. I think it is a valid argument.
But he had to know that 2019 was very much in play (and is likely the most logically consistent).
This is very squishy law.
Safety not only seems to be an anti-priority at xAI given what we've seen come out of it, even at OpenAI Elon seemed not that concerned with safety, leading to that entertaining incident with a "golden jackass" trophy: https://xcancel.com/abc7newsbayarea/status/20546984193823543...
Almost certainly Dario would still have split from under Elon too, but also very likely that Elon would have immediately thrown a barrage of IP / NDA / trade secret / non-compete violation lawsuits to cripple Anthropic and keep it from reaching the frontier.
It's the same as always. Musk himself is an awful business man. He relies upon buying the success of others and taking over. Outside of that, he's kind of awful. Initiatives started by Musk himself almost inevitably fail.
SpaceX, founded entirely by him alone, is also the most valuable space technology company on earth, so...
Tesla is an incredibly overvalued company rapidly losing ground to China that survives by Musk’s image of being a futurist, and by announcing fake products that never see the light of day.
SpaceX has been headed by Gwynne Shotwell since the early days and usually when Musk inserted himself it’s been a mess.
Within this realm of AI, Musk has constantly invested and failed. Dojo, xAI, Grok. His newest idea is leveraging SpaceX money to put data centers in Space.
Good luck with that.
Disclaimer: My portfolio is 65% Tesla.
Tesla has been a meme stock for about five years now, maybe more. Its valuation correlates with Musk's abilities as a showman and media figure, not a businessman.
TSLA currently has a P/E of ~375. That's extremely overvalued. There's no possible objective reason for TSLA to have such an extreme ratio. Even if you think Robotaxi is going to be a massive success, it would have to completely devour Lyft, Uber, and traditional taxi services all combined to even get half way to justifying that P/E, and considering the already major distrust in Tesla's FSD, I just don't see that happening.
The math doesn't math. People buy TSLA because they want to be part of Elon's cult, not because of anything to do with Tesla as a company.
Normally the way this works, is you excuse yourself away from a debate for being too financially involved in the situation, knowing that your financial bias is too overwhelming.
They didn’t do any lobbying? ^_^
PS Bravo to his lawyers. Get his cash folks by promising him that he will win!
Intersting outcome. So it's more of a dismissal on technical grounds rather than a complete loss.
I was really hoping they could somehow both lose.
Perhaps he lacks good lawyers, perhaps he just can’t find substance and he’s filling out of spite.
In point of fact most valuations place OpenAI in the hundreds of billions of dollars already and growing rapidly.
Basically, no: OpenAI's pockets are deeper than Musks's personal wealth. Especially so considering that this suit is existentially important to them where Musk needs to maintain leverage for other efforts.
There won't be a round 2. It's over.
What they did to him was unfair, he put in all the money, office and initial push, he deserves a piece of the pie he created. This is quite unfair towards him.
We're all supposed to play by the same rules.
But they have emails from one Elon Musk telling them to structure it roughly how it turned out.
They also have emails including Musk where the profit share is discussed, and his "investment" is talked about as roughly a donation.
Like he could have asked for a profit share at any point and it just doesn't seem to happen?
If the outcome is unfair to Musk, its because Musk worked tirelessly to ensure he had no legal standing with which to make it fair to Musk.
The correct remedy would be to return OpenAI to its former non-profit structure but that's never going to happen in the current system.
The next thing after 'too big to fail' is 'too big to litigate.'
Stealing a non-profit entity is legal if enough people dump billions of dollars in it.
Basically the title of the court case was: "Is Skynet slop going to be helpful to mankind".
We all know how that story ends. Thus, fining both is warranted. When the superrich go to court, they should pay an extra fee. Like a billion per court case or so.
"At some point we’d get someone to run the team, but he/she probably shouldn’t be on the governance board"
"generally, safety should be a first-class requirement"
"Probably better to have a standard C corp with a parallel nonprofit"
"Because we don't have any financial obligations, we can focus on the maximal positive human impact"
"The underlying philosophy of our company [OpenAI] is to disseminate AI technology as broadly as possible as an extension of all individual human wills, ensuring, in the spirit of liberty, that the power of digital intelligence is not overly concentrated and evolves toward the future desired by the sum of humanity"
"The outcome of this venture is uncertain and the pay is low compared to what others will offer, but we believe the goal and the structure are right"
"do you have any objection to me proactively increasing everyone's comp by 100-200k per year?"
"The output of any company is the vector sum of the people within it."
"it's totally OK to not share the science (even though sharing everything is definitely the right strategy in the short and possibly medium term for recruitment purposes)"
"Frankly, what surprises me is that the AI community is taking this long to figure out concepts. It doesn't sound super hard."
"Powerful ideas are produced by top people. Massive clusters help, and are very worth getting, but they play a less important role."
"Deepmind is causing me extreme mental stress."
"At any given time, we will take the action that is likely to most strongly benefit the world."
"Would be worth way more than $50M not to seem like Microsoft's marketing bitch."
"Ok. Let's figure out the least expensive way to ensure compute power is not a constraint..."
"Within the next three years, robotics should be completely solved . . . In as little as four years, each overnight experiment will feasibly use so much compute capacity that there’s an actual chance of waking up to AGI"
"We think the path must be: AI research non-profit (through end of 2017), AI research + hardware for-profit (starting 2018), Government project (when: ??)"
"Satisfying this means a situation where, regardless of what happens to the three of them, it's guaranteed that power over the company is distributed after the 2-3 year initial period"
"As mentioned, my experience with boards (assuming they consist of good, smart people) is that they are rational and reasonable. There is basically never a real hardcore battle. . ."
"The current structure provides you with a path where you end up with unilateral absolute control over the AGI. You stated that you don't want to control the final AGI, but during this negotiation, you've shown to us that absolute control is extremely important to you. As an example, you said that you needed to be CEO of the new company so that everyone will know that you are the one who is in charge. . ."
"Specifically, the concern is that Tesla has a duty to shareholders to maximize shareholder return, which is not aligned with OpenAI's mission"
"During this negotiation, we realized that we have allowed the idea of financial return 2-3 years down the line to drive our decisions . . . this attitude is wrong"
"i remain enthusiastic about the non-profit structure!"
". . .apparently in the last day almost everyone has been told that the for-profit structure is not happening and he [Sam] is happy about this"
"Our goal and mission are fundamentally correct"
"We also have identified a small but finite number of limitations in today's deep learning which are barriers to learning from human levels of experience. And we believe we uniquely are on trajectory to solving safety (at least in broad strokes) in the next three years."
"Our biggest tool is the moral high ground. To retain this, we must: Try our best to remain a non-profit. AI is going to shake up the fabric of society, and our fiduciary duty should be to humanity. Put increasing effort into the safety/control problem, rather than the fig leaf you've noted in other institutions. It doesn't matter who wins if everyone dies. Related to this, we need to communicate a "better red than dead" outlook — we're trying to build safe AGI, and we're not willing to destroy the world in a down-to-the-wire race to do so."
"The sharp rise in Dota bot performance is apparently causing people internally to worry that the timeline to AGI is sooner than they’d thought before."
"This needs billions per year immediately or forget it."
"all investors are clear that they should never expect a profit"
"We saw no alternative to a structure change given the amount of capital we needed and still to preserve a way to 'give the AGI to humanity' other than the capped profit thing, which also lets the board cancel all equity if needed for safety. Fwiw I personally have no equity and never have."
Of course this will be appealed but, as you see the claims just don't stick.
That said, even though Altman is a shifty dude who's clearly playing a Game of Thrones while all others are playing Capitalism, I am extremely grateful that it's him running OpenAI and not Elon.
Seeing what Elon has done to Twitter, I shudder to think of what he'd do with ChatGPT. The level of reach and subtle influence he would have is insane. He could do with private chats what he's doing to public discourse, and it would all be invisible.
On the other hand, seeing what he's done with Grok, it's very likely OpenAI would be where xAI is and would never reach this level of adoption and influence. Which seems to be what most people at OpenAI were really worried about.
For a robbery that doesn't involve a weapon I think we should generally forgive and forget if it's been long enough. Nobody cared enough to bring action in court for whatever reason, and it would be awful for someone in their 40's to be jailed and brought into court for something that happened in their 20's. At that point if the government fails to prosecute that's on them, and on us for failing to hold them accountable. But 20 years is a long time and people can change over that timespan, so it probably doesn't make sense to hold a grudge for that long.
There are especially egregious crimes that have no statute of limitations like murder and sexual assault, but we might find our society better off for keeping the statute of limitations for injuries that we can recover from.
Also, if someone hasn't committed a crime in, say, 20 years, there's questionable need to lock them up for three years to deter the behavior. Goal is to optimize the overall system even if some people slip through the cracks.
It's also generally considered unfair for someone to have an indefinite threat of being sued or prosecuted hanging over them when their ability to defend themselves gets weaker over time. Limitations discourage strategic delays or using old claims as leverage far into the future. Without limitation periods, old business transactions could be reopened forever, estates could never fully settle, people and businesses would face constant uncertainty.
Ultimately, the courts are just better at resolving current disputes than reconstructing old ones.
Encouraging timely action is another factor. Generally people with real harms will file sooner than later, otherwise why wait?
It's also to grant peace of mind -- so people can stop worrying about potential litigation after some amount of time.
It is instead relevant if the state decides not to charge you for a crime but comes back to you decades later and goes "we changed our mind, now you have a week to come up with a defense".
I don't press charges.
20 years pass. You grow up. You've changed your ways. You've become a squeaky-clean individual. You've put all that behind you. You become a healthy member of society. Your career's underway, you live in your own place, you may or may not have started a family.
Hey, remember that Crime I didn't press charges about at the time? Well, surprise, motherfucka. I've been waiting for this moment to do so. To the courts you go, get your ass fined, thrown in jail, and give you a criminal record, all so it'd hurt you that much worse now that you have your roots planted in your life.
Actually, you did Crimes to several people, right? Let's get them all in on this action! We'll just kind of trickle the suits in, one-by-one. Let one resolve, give it a few months, the next guy presses charges about his. Just kind of a steady flow of skeletons in the closet that you have to either defend against (and how are you gonna do that? It's 20 years old, hope you have evidence for your side somewhere in the attic) or take the sentencing of (which will do wonders for that career of yours), just to make your life hell.
>the spectacle of these two multibillionaires fighting about power and money has distorted and obscured what the law is meant to care about here, which is the public interest
(https://www.ft.com/content/846479c8-4ab0-4812-a1d5-08abdd8b9...)
The American judicial system is completely Byzantine and rotten, from top to bottom. Worse than many third world countries.
Moreover, there is no "justice" here either way--it's just rich people suing each other.
