Elon Musk drops fraud charges against OpenAI, co-founders trial looms
The April 27 case will now focus on core disputes over OpenAI’s shift to a for-profit model after accepting investments from Microsoft
Ahead of a closely watched trial, billionaire entrepreneur Elon Musk has dropped fraud allegations against OpenAI and its co-founders, Sam Altman and Greg Brockman, western media reports said.
US District Judge Yvonne Gonzalez Rogers on Friday (April 24) approved Musk’s request to streamline the case, allowing only two claims — unjust enrichment and breach of charitable trust — to proceed to trial out of the 26 originally filed in November 2024.
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The trial is set to begin with jury selection on Monday (April 27) in a federal court in Oakland, California, and is expected to be one of the most high-profile legal battles in the tech world.
Musk’s allegations
Describing his lawsuit as a “broken promise”, Musk alleged that OpenAI, which he also helped in founding in 2015 as a non-profit focused on developing artificial intelligence for the benefit of humanity, abandoned that mission after accepting billions of dollars in investment from Microsoft and transitioning towards a for-profit model.
According to court filings, Musk is seeking damages of up to $134 billion, while some media reports have cited figures as high as $150 billion, with the amount intended for OpenAI’s charitable arm if he succeeds. He also asked the court to restore OpenAI’s non-profit status and to remove Altman and Brockman from their leadership roles.
Musk accused of 'legal ambush'
OpenAI, along with Altman, Brockman, and Microsoft, has denied all allegations, calling the lawsuit baseless and describing Musk’s legal strategy as a form of harassment. The company has also accused him of introducing new demands at the last minute, terming it a “legal ambush” just weeks before trial.
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The proceedings will unfold in two phases. In the first stage, a jury will hear arguments and evidence related to Musk’s claims. However, the jury’s decision will be advisory in nature, with the final determination resting with Judge Rogers. In the second phase, the court will examine the remedies sought by Musk before issuing a ruling.
The case also reflects a broader fallout between former collaborators turned rivals. Musk stepped down from OpenAI’s board in 2018 and later launched his own artificial intelligence venture, xAI, in 2023, which now competes directly with OpenAI.
Clash of tech giants
Tensions escalated further after OpenAI rejected Musk’s unsolicited $97.4 billion bid last year to acquire the non-profit entity controlling the organisation. The company has since moved ahead with restructuring plans aimed at attracting more investment and potentially going public.
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