On Friday, a U.S. judge narrowed Elon Musk’s legal battle against OpenAI, dismissing key fraud claims while allowing a closely watched trial over the company’s nonprofit origins to move forward.
Judge Dismisses Fraud Claims, Keeps Core Dispute Alive
U.S. District Judge Yvonne Gonzalez Rogers ruled that Musk’s fraud and constructive fraud allegations lack sufficient grounds, effectively trimming the scope of the lawsuit, Reuters reported.
However, the court allowed claims tied to breach of charitable trust and unjust enrichment to proceed, setting the stage for a high-stakes jury trial in Oakland, California.
Jury selection is scheduled to begin Monday, with opening arguments expected Tuesday.
Musk Targets OpenAI’s Shift To For-Profit Model
At the heart of the dispute is Musk’s claim that OpenAI abandoned its founding mission as a nonprofit dedicated to benefiting humanity when it created a for-profit arm in 2019.
The lawsuit also names CEO Sam Altman and tech giant Microsoft Corp (NASDAQ:MSFT), a major investor in OpenAI.
Musk argues that the transition enabled the company to prioritize profits over the public good. He is seeking damages reportedly as high as $150 billion, with any proceeds pledged to charity.
OpenAI Fires Back, Calls Lawsuit Self-Serving
OpenAI has strongly rejected the allegations, characterizing the lawsuit as a competitive move driven by Musk’s personal interests in the artificial intelligence race.
The company earlier said the claims amount to a “harassment campaign” fueled by rivalry rather than legitimate legal concerns.
OpenAI has also warned that such large damages could severely impact its nonprofit arm.
What’s At Stake In The Trial
The upcoming trial will center on whether OpenAI violated its original charitable commitments by restructuring into a hybrid model.
Musk is also pushing for structural changes, including a return to a fully nonprofit organization and the removal of key leadership.
The case unfolds as OpenAI reportedly explores a potential IPO that could value the company at up to $1 trillion, raising the stakes for both sides.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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