Here’s why Elon Musk lost his suit against OpenAI

OpenAI was cofounded by Musk and a group of researchers in 2015 as a nonprofit with a mission to develop AI for the benefit of humanity, unconstrained by a need to generate financial returns. Musk donated $38 million to the company during its early days, allegedly based on the promise from OpenAI CEO Sam Altman and president Greg Brockman to keep the company a nonprofit committed to the mission.   

Musk brought two claims against OpenAI. First, he argued that Altman and Brockman breached the charitable trust he created through his donations by breaking their promise to keep the company a nonprofit and creating a for-profit subsidiary that ballooned over the years. Second, he argued that Altman and Brockman unjustly enriched themselves at Musk’s expense. He sued OpenAI in 2024. 

Musk asked the court to unwind OpenAI’s restructuring in 2025 that converted its for-profit subsidiary into a public benefit corporation and to remove Altman and Brockman from their roles.

OpenAI argued that Musk waited too long to sue the company, and as a result, each of his claims is barred by the relevant statute of limitations. The statute of limitations on the breach of charitable trust claim is three years, while the statute of limitations on the unjust enrichment claim is two years. This means that Musk should have discovered, or had reason to discover, Altman and Brockman’s alleged breach of charitable trust no earlier than 2021 and their alleged unjust enrichment no earlier than 2022. 

While Musk argued he discovered that Altman and Brockman had broken their promise only in 2022, OpenAI claimed that Musk had reason to think this well before 2021. 

Musk told the jury that he has gone through “three phases” in his beliefs about OpenAI: In phase one, he was “enthusiastically supportive” of the company. In phase two, “I started to lose confidence that they were telling me the truth,” he said. In phase three, “I’m sure they’re looting the nonprofit.” 

Here’s a deeper dive into a timeline of the events as testified in the trial. You can read my dispatches from all three weeks of the trial here and here and here. 

2017: Musk proposed creating a for-profit subsidiary

In 2017, two years after OpenAI was founded, Musk and the other cofounders tried to create a for-profit subsidiary to raise enough capital to build artificial general intelligence—powerful AI that can compete with humans on most cognitive tasks. They fought a bitter power battle over who would get to control the entity. Musk also proposed merging OpenAI with his electric-car company Tesla.