A US federal judge has thrown out Elon Musk’s fraud allegations in his landmark lawsuit against OpenAI and co-founder Sam Altman, Reuters reported, but the case is far from over, with jury selection beginning Monday in what promises to be one of Silicon Valley’s most explosive courtroom battles.
Elon Musk had said dismissing his fraud and constructive fraud claims, which he proposed, would streamline the case and keep jurors focused on his goal of ensuring that OpenAI benefit humanity rather than be a “wealth machine.”
Fraud Claims Dropped as Elon Musk-Sam Altman Trial Gets Underway
A US federal judge on Friday dismissed the fraud claims at the centre of Elon Musk’s sprawling lawsuit against OpenAI and its chief executive, Sam Altman — clearing the path, however, for the remaining allegations of breach of charitable trust and unjust enrichment to proceed to trial.
US District Judge Yvonne Gonzalez Rogers, presiding in Oakland, California, issued the ruling just days before jury selection was set to begin.
What Is Musk Alleging Against OpenAI and Sam Altman?
The lawsuit, in which Elon Musk is seeking up to $134 billion in damages, centres on his claim that OpenAI, Altman, and company president Greg Brockman abandoned a founding promise to operate the artificial intelligence laboratory as a nonprofit in perpetuity.
Since its inception, OpenAI has restructured to allow a for-profit subsidiary to operate alongside its charitable arm, a transformation that has seen the company’s valuation soar past $850 billion.
Elon Musk, who was among the original cohort of technologists who co-founded OpenAI in 2015 out of shared anxieties about the unchecked advancement of AI, alleged in a 2024 filing that he was “assiduously manipulated” and “deceived” by promises that the company “would chart a safer, more open course than profit-driven tech giants.”
From Co-Founders to Courtroom Rivals: The Elon Musk-Sam Altman Breakdown
The two men were once close collaborators, bound by a mutual conviction that artificial intelligence posed existential risks requiring careful, humanity-centred stewardship. That relationship fractured in 2018, when Elon Musk departed OpenAI’s board following a series of disagreements over the organisation’s direction — including a failed bid to merge the startup with his electric vehicle company, Tesla.
In the years since, the relationship has curdled into open hostility. Elon Musk launched his own AI venture, xAI, in 2023 — a direct competitor to OpenAI — and recently merged it with his social media platform X in a deal valuing the combined entity at $1.25 trillion.
Sam Altman has not been shy about the forthcoming confrontation: “Really excited to get Elon under oath in a few months, Christmas in April!,” he wrote on X in February. Elon Musk, for his part, wrote in August: “Scam Altman lies as easily as he breathes.”
$134 Billion Lawsuit: What Remains at Stake
Of the 26 claims Elon Musk originally asserted against OpenAI, Altman, and Brockman in November 2024, only four survived to the eve of trial: unjust enrichment, fraud, constructive fraud, and breach of charitable trust.
Elon Musk’s own legal team subsequently moved to drop the fraud and constructive fraud counts ahead of proceedings to, in their words, “streamline the case.” OpenAI’s lawyers characterised the move as “evasive tactics,” noting in a filing that “trial begins in five days but Plaintiff still refuses to state plainly what claims he will pursue and what remedies he will seek.”
Microsoft, a longstanding OpenAI backer and co-defendant, is accused of aiding and abetting the alleged breach of charitable trust.
Should Elon Musk prevail, he has stated he does not seek personal financial gain, rather, he wants “ill-gotten gains” returned to OpenAI’s nonprofit, alongside the removal of Altman and Brockman from their respective roles and the unwinding of OpenAI’s for-profit conversion.
How the Elon Musk vs OpenAI Trial Will Be Structured
Judge Gonzalez Rogers, who was appointed to the US District Court for the Northern District of California by former President Barack Obama in 2011, has divided proceedings into two phases: a liability stage, in which nine jurors will determine whether any wrongdoing occurred, and a remedies phase, in which she alone will decide appropriate damages and next steps. The jury’s verdict in the liability phase will be advisory only — meaning the judge retains final authority over the outcome in both stages.
Attorneys for Elon Musk and OpenAI have each been allocated approximately 20 hours to present their respective cases; Microsoft’s legal team will receive five hours.
All three parties have submitted witness lists that include Elon Musk himself, Altman, Brockman, and Microsoft chief executive Satya Nadella, according to CNBC report. The liability phase is expected to run through mid-May, with court sitting Monday through Thursday from 8:30 a.m. to 1:40 p.m. PT. If OpenAI is found liable, the remedies phase is scheduled to begin on 18 May.
Jury selection in Musk v. Altman begins Monday at the federal courthouse in Oakland, California.
