Musk's Lawsuit Unanimously Dismissed... OpenAI Gets Green Light for IPO

Oakland Court: "Statute of Limitations Has Expired"

Elon Musk, CEO of Tesla, has suffered a near-total defeat in his lawsuit against Sam Altman and OpenAI. A U.S. court dismissed Musk's claims, stating that the statute of limitations for filing the lawsuit had expired. As a result, OpenAI, which is currently working toward an initial public offering (IPO), has escaped significant legal risk.

According to reports from the Financial Times (FT) and other foreign media on the 18th (local time), a jury at the U.S. District Court in Oakland, California, unanimously determined that Musk's claims of "breach of charitable trust" and "unjust enrichment" were filed after the statute of limitations had passed. The jury reached its verdict in just two hours.

Musk has argued that OpenAI's transition from a nonprofit organization, established in 2015, to a for-profit corporate structure violated its founding purpose and original commitments. He donated tens of millions of dollars as a co-founder, but after a management dispute, he left the company in 2018.

Sam Altman, CEO of OpenAI. Yonhap News Agency

FT reported that, in particular, Musk demanded up to $134 billion (approximately 180 trillion won) in damages from OpenAI and its largest investor, Microsoft (MS), as well as the removal of CEO Altman and President Greg Brockman, and the reversal of the for-profit conversion.

However, OpenAI countered that Musk was aware of the transition to a for-profit structure from the beginning, and that he filed the lawsuit only after his desire to control the company was rejected, subsequently establishing a competing firm.

The verdict is considered a major boon for OpenAI. As OpenAI pursues an IPO, the lawsuit with Musk had been regarded as one of the largest sources of uncertainty regarding the company's governance and valuation process. In particular, since Musk demanded both a reversal of the for-profit conversion and a change in management, the dismissal of the suit has significantly reduced legal risks for the company.

The Wall Street Journal (WSJ) anticipated that this ruling would also have an impact on the global artificial intelligence (AI) industry’s competitive landscape, since both Musk’s SpaceX and Altman’s OpenAI are preparing for public listings.

This content was produced with the assistance of AI translation services.