Judge indicates Elon Musk's fraud lawsuit against OpenAI will head to
trial
[January 08, 2026] By
MICHAEL LIEDTKE
A federal judge on Wednesday indicated a jury will be allowed to decide
whether artificial intelligence trailblazer OpenAI hoodwinked its
billionaire co-founder Elon Musk during its evolution from a nonprofit
research lab into a capitalistic enterprise now valued at $500 billion.
Without issuing an official ruling, U.S. District Judge Yvonne Gonzalez
Rogers made it clear that she intended to reject OpenAI's motion to
dismiss a 17-month-old case that Musk filed against a San Francisco
startup that he helped create in 2015.
“This case is going to trial,” Gonzalez Rogers said emphatically during
an occasionally testy 90-minute hearing held in Oakland, California.
The judge said she still needed to figure out some of the logistics of
how the trial will be set up, as well as whether to dismiss unjust
enrichment allegations that Musk has made against Microsoft, which has
accumulated a $135 billion stake in OpenAI since investing $1 billion in
a for-profit subsidiary that the startup created in 2019.
But the judge told lawyers that there is sufficient evidence for a jury
to consider in a legal showdown pitting Musk — the world's richest man
with an estimated fortune of $713 billion — against OpenAI CEO Sam
Altman, whose fortune is currently pegged at $2 billion. Both
billionaires would likely be summoned to court to testify under oath if
the trial proceeds.
“Part of this is about whether a jury believes the people who will
testify and whether they are credible,” Gonzalez Rogers said.
It's unclear when the judge will schedule the trial.
The case revolves around OpenAI's origins as a nonprofit research lab
that Musk and Altman launched to develop artificial intelligence
designed primarily for the good of humanity. That mission, the two
founders believed, could serve as a foil to AI being developed by Google
and other profit-driven companies that, they claimed, could deploy the
technology recklessly as they strived to make more money.
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 Musk contributed $40 million, mostly
funneled through donor-advised funds that he had set up, in addition
to four Tesla vehicles. Then he and Altman had a falling out over
OpenAI's future, according to evidence that has surfaced so far.
At that point, Musk began to suspect that Altman
and another OpenAI executive, Greg Brockman, might be plotting to
transform the research lab into a profit-seeking company, according
to evidence submitted to the the judge.
Although Altman sought to reassure Musk he remained committed to
OpenAI's non-profit mission, Musk decided to cut ties with the
startup and eventually launched a rival, xAI, that was valued at
$230 billion in a just-completed fundraising.
A 2017 diary entry by OpenAI's Brockman was among the information
that Gonzalez Rogers cited to support her rationale for allowing
Musk's lawsuit to go to trial.
In the diary, Brockman mused about his desire to become a
billionaire and wrote, “We’ve been thinking that maybe we should
just flip to a for profit. Making the money for us sounds great and
all,” according to court filings.
At one point, OpenAI's own board of directors had serious enough
misgivings about Altman's motives to trigger his firing in 2023
before quickly bringing him back as CEO in a comeback that Microsoft
helped orchestrate.
One of the key issues that must be decided before Musk can pursue
his fraud claims against OpenAI at trial is pinpointing when the
alleged deceit occurred. That's because there's a three-year statute
of limitations on his fraud claims.
Gonzalez Rogers indicated she will probably let a jury first decide
when the alleged fraud against Musk occurred. The trial then would
be allowed to proceed to the fraud phase if it's determined that the
suspected deceit began less than three years before Musk's August
2024 filing of his lawsuit.
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