Jurors never reached Musk's allegations that OpenAI abandoned nonprofit mission

An Oakland jury spent three weeks listening to testimony about OpenAI's early days, its board's 2023 attempt to fire CEO Sam Altman, co-founder Greg Brockman's personal journal, robotic armies and museum stores. In the end, none of it mattered. The nine-member panel didn't make it past the first question on the verdict form, taking less than two hours to decide Elon Musk's claims for breach of charitable trust and unjust enrichment were barred by the statute of limitations. *Musk v. Altman et al*., 4:24-cv-04722 (N.D. Cal., filed Aug. 5, 2024). "It's not a technical decision, it's a substantive one," Wachtell, Lipton, Rosen & Katz partner William Savitt, who led OpenAI's trial effort, told reporters outside the courthouse. "It says, 'You brought your claims too late, and you did it because you were sitting on them to use them as a weapon [against] a competitor you can't compete with in the marketplace.'" Musk founded the company with Altman, Brockman and engineer Ilya Sutskever. The nonprofit venture was committed to advancing AI safely, but alleged Altman and Brockman took the $38 million he donated and turned it into an $800 billion for-profit venture that abandoned its original mission. His attorney, Steven F. Molo of MoloLamken LLP, repeatedly boiled the argument down to the refrain, "You can't steal a charity." While OpenAI's nonprofit arm owns about a quarter of the for-profit, Molo said, it's akin to a museum gift shop taking over the museum and selling the Picassos. Had the jury gotten to the breach of charitable trust claim, Molo said he believes his client would have won. He plans to appeal. "We're disappointed in the jury's verdict on the technical statute of limitations defense," Molo said in an email to the Daily Journal. "There's no finding on breach of charitable trust, on which we believe the evidence is quite strong in our favor." Musk took the stand to tell the jury how he'd founded the venture, lent his time, money and reputation to it before leaving after his co-founders decided to start a for-profit and wouldn't grant him a fair share of equity. Altman and Brockman told the jury that Musk had demanded control of the company. When his co-founders refused, they said, he stopped funding the venture, tried to roll it into Tesla, and eventually left it for dead. Only after the company found success and Musk started a competitor, xAI, did he bring the lawsuit, they said. "The finding of the jury confirms that what this lawsuit was is a hypocritical attempt to sabotage a competitor and to overcome a long history of very bad predictions about what OpenAI has been," Savitt said Monday. Musk's attorneys presented hours of testimony about Altman's removal and subsequent reinstatement in 2023, which Molo said calls into question the OpenAI CEO's integrity, along with his commitment to the venture's mission. Molo also obtained a journal Brockman kept during the company's early days, pressing him on an entry that said it would be "morally bankrupt" to start a for-profit and cut Musk out of the venture. Savitt said that Musk failed to convince the jury because, outside of his own testimony, all of the evidence supported the defendants' narrative. "What the nine members of the jury found is that his stories were just that: stories, not facts. The facts are that OpenAI is a not-for-profit, mission-driven organization," Savitt said. The jury also found in favor of Microsoft, which Musk claims aided the breach with a $10 billion investment in 2023 that made the company remove its previous capped-profit structure, on statute of limitations grounds. The company is represented by Dechert LLP. While the defendants moved tfo dismiss the lawsuit and for summary judgment on statute of limitations grounds, Gonzalez Rogers denied both requests, since Musk presented a different timeline of events that put his claims within the three-year window for breach of charitable trust claims. Musk said that the breach wasn't complete, or he at least wasn't aware of it, until the 2023 investment removed OpenAI's profit caps. OpenAI argued the claims were time-barred since Musk's direct donations stopped in 2017 and the for-profit was established in 2019. At both junctures, the judge held that it was a dispute of fact and left it up to the jury. The liability phase of the bifurcated trial -- Gonzalez Rogers decided to hear the remedies phase of the trial outside the view of the jury -- ended Thursday, with the jury reconvening Monday morning for deliberations. Musk called damages expert C. Paul Wazzan, who traced $134 billion in OpenAI's value to the Tesla CEO's donations, as the first witness of the remedies phase. An hour into his testimony, the clerk interrupted the hearing to inform Gonzalez Rogers that the jury had reached a verdict. While the jury was serving in an advisory capacity, Gonzalez Rogers said she would accept the verdict.

---