Musk v. OpenAI Trial Begins After Fraud Claims Dismissed

On April 24, a federal judge dismissed Elon Musk's fraud claims against OpenAI and Sam Altman at Musk's own request, calling it a strategic move to "streamline the case and keep jurors focused" on ensuring OpenAI benefits humanity rather than becoming a "wealth machine," according to Reuters. The trial on the remaining claims begins Monday, April 27, with jury selection in Oakland federal court.

The case has been whittled from 26 original claims down to just two: breach of charitable trust and unjust enrichment. Judge Yvonne Gonzalez Rogers had already dismissed breach of contract, RICO racketeering, false advertising, and antitrust claims in earlier rulings. Punitive damages were barred on March 31, 2026, as Let's Data Science reported.

The charitable trust claim argues that OpenAI's nonprofit assets were irrevocably dedicated to charitable purposes and were wrongfully converted to for‑profit use. California Attorney General Rob Bonta has reminded OpenAI that its assets are "irrevocably dedicated" to charitable purposes, according to Sola Fide. The unjust enrichment claim argues that Altman, Brockman, and other defendants benefited improperly from the for‑profit conversion.

Judge Gonzalez Rogers ruled in January 2026 that there was "ample evidence in the record" and that "triable issues of fact exist for a jury to decide," as Local News Matters reported. The case is now in equity jurisdiction, meaning the judge — not the jury — decides the amount of any disgorgement.

The most damaging evidence comes from Greg Brockman's 2017 personal journal, cited directly by Judge Gonzalez Rogers. In one entry, Brockman wrote: "It'd be wrong to steal the nonprofit from him to convert to a b‑corp without him. That'd be pretty morally bankrupt, and he's really not an idiot." In another: "This is the only chance we have to get out from Elon. Is he the 'glorious leader' that I would pick?"

Simultaneously, Sam Altman told Musk in 2017: "I remain enthusiastic about the non‑profit structure!" — while internal discussions were already moving toward a for‑profit model, as CNBC reported. Three months later, OpenAI created its b‑corp subsidiary.

The financial stakes are enormous. Musk's damages expert Dr. C. Paul Wazzan testified that up to $134 billion could be at issue — the nonprofit foundation's current 26% stake in the for‑profit entity is worth roughly $130 billion, per Let's Data Science. However, Judge Gonzalez Rogers expressed deep skepticism of those figures: "A jury is going to understand that he is pulling these numbers out of the air."

A more realistic recovery estimate from Darrow AI puts the figure at $20–38 million — roughly equal to Musk's original contributions. Prediction markets give Musk a approximately 36% chance of winning, according to Let's Data Science.

If Musk wins, he seeks to unwind OpenAI's for‑profit conversion, remove Altman and Brockman from leadership, and sever ties with Microsoft — outcomes that could block OpenAI's planned IPO (potentially the biggest ever, targeting Q4 2026), as CNBC reported.

For developers building on OpenAI's API, the trial introduces three layers of uncertainty:

• API continuity risk: If OpenAI is forced to unwind its for‑profit structure, the commercial infrastructure supporting API access could face disruption, according to Time.
• AGI licensing wild card: If the court rules that GPT‑4 or successor models constitute AGI, Microsoft's exclusive license would terminate and these technologies could be required to go public — potentially changing access terms for all developers, per Sola Fide.
• Capital availability: OpenAI disclosed the Musk litigation as a "potential risk to prospective investors" in IPO documents. A forced nonprofit reversion could severely limit OpenAI's ability to invest in infrastructure and platform development, as CNBC noted.

The trial runs Monday through Thursday, 8:30 a.m. to 1:40 p.m. PT. Each side gets roughly 20 hours; Microsoft gets 5 hours. Nine jurors, no alternates. Expected conclusion: late May 2026.

OpenAI's defense rests partly on evidence that Musk himself proposed a for‑profit structure in 2017 — suggesting merging OpenAI with Tesla and acknowledging that a for‑profit model would be necessary, per Let's Data Science. OpenAI characterizes the lawsuit as "part of a broader strategy of harassment aimed at slowing us down and advantaging his own AI company, xAI," as reported by Barron's.

But Musk's team counters with the Brockman journals and the timing: Altman assured Musk of commitment to the nonprofit while internally planning the opposite. The statute of limitations could also be a problem for Musk — if the jury finds he failed to file within the 2‑4 year limitation periods, the judge may direct a verdict for OpenAI, as CNBC reported.

Key witnesses expected include Musk, Altman, Brockman, Microsoft CEO Satya Nadella, former OpenAI CTO Mira Murati, and former chief scientist Ilya Sutskever, according to SF Standard.

Regardless of outcome, this trial sets a precedent for nonprofit governance in AI. A Musk victory could reshape how major donors hold charities accountable to gift purposes — fundamentally changing philanthropy's power dynamics, as Sola Fide noted. For the AI industry, the question of who controls transformative AI models — and whether founding ideals can survive commercial scale — hangs in the balance.

As WIRED put it: this is a "long‑overdue reckoning with how AI labs are held accountable when founding ideals collide with commercial scale." Whether you build on OpenAI, Anthropic, or open‑source models, the legal framework governing who owns AI's future is being written in this courtroom.